Switch to:
Toro Co (NYSE:TTC)
E10
\$1.21 (As of Jul. 2016)

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Toro Co's adjusted earnings per share data for the three months ended in Jul. 2016 was \$0.500. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$1.21 for the trailing ten years ended in Jul. 2016.

As of today, Toro Co's current stock price is \$56.54. Toro Co's E10 for the quarter that ended in Jul. 2016 was \$1.21. Toro Co's Shiller P/E Ratio of today is 46.73.

During the past 13 years, the highest Shiller P/E Ratio of Toro Co was 47.84. The lowest was 10.35. And the median was 27.55.

Definition

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use todays price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Lets use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned \$1 a share in 2001, then the 2001s equivalent earnings in 2010 is \$1.4 a share. If Wal-Mart earns \$1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is \$1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, Toro Co's adjusted earnings per share data for the three months ended in Jul. 2016 was:

 Adj_EPS = Earnigns per Share / CPI of Jul. 2016 (Change) * Current CPI (Jul. 2016) = 0.5 / 240.628 * 240.628 = 0.500

Current CPI (Jul. 2016) = 240.628.

Toro Co Quarterly Data

 201404 201407 201410 201501 201504 201507 201510 201601 201604 201607 per share eps 0.755 0.435 0.1 0.27 0.82 0.47 0.21 0.35 0.945 0.5 CPI 237.072 238.25 237.433 233.707 236.599 238.654 237.838 236.916 239.261 240.628 Adj_EPS 0.766 0.439 0.101 0.278 0.834 0.474 0.212 0.355 0.95 0.5 201110 201201 201204 201207 201210 201301 201304 201307 201310 201401 per share eps 0.045 0.165 0.565 0.335 0.005 0.265 0.66 0.34 0.045 0.22 CPI 226.421 226.665 230.085 229.104 231.317 230.28 232.531 233.596 233.546 233.916 Adj_EPS 0.048 0.175 0.591 0.352 0.005 0.277 0.683 0.35 0.046 0.226 200904 200907 200910 201001 201004 201007 201010 201101 201104 201107 per share eps 0.25 0.135 0 0.08 0.335 0.253 0.03 0.133 0.47 0.275 CPI 213.24 215.351 216.177 216.687 218.009 218.011 218.711 220.223 224.906 225.922 Adj_EPS 0.282 0.151 0 0.089 0.37 0.279 0.033 0.145 0.503 0.293 200610 200701 200704 200707 200710 200801 200804 200807 200810 200901 per share eps 0.033 0.11 0.443 0.255 0.043 0.118 0.4 0.248 0.01 0.045 CPI 201.8 202.416 206.686 208.299 208.936 211.08 214.823 219.964 216.573 211.143 Adj_EPS 0.039 0.131 0.516 0.295 0.05 0.135 0.448 0.271 0.011 0.051

Add all the adjusted EPS together and divide 10 will get our e10.

Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller P/E Ratio can seem to be too high even the actual P/E is low.

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Toro Co's Shiller P/E Ratio of today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 56.54 / 1.21 = 46.73

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of Toro Co was 47.84. The lowest was 10.35. And the median was 27.55.

Be Aware

Shiller P/E Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.

Related Terms

Shiller P/E Ratio

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Toro Co Annual Data

 Oct05 Oct06 Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 e10 0.00 0.35 0.42 0.51 0.00 0.60 0.68 0.79 0.88 0.99

Toro Co Quarterly Data

 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 e10 0.96 0.98 0.99 0.99 1.05 1.08 1.09 1.12 1.18 1.21
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)