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Valassis Communications Inc (NYSE:VCI)
E10
\$2.08 (As of Sep. 2013)

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.

Valassis Communications Inc's adjusted earnings per share data for the three months ended in Sep. 2013 was \$0.700. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$2.08 for the trailing ten years ended in Sep. 2013.

As of today, Valassis Communications Inc's current stock price is \$34.02. Valassis Communications Inc's E10 for the quarter that ended in Sep. 2013 was \$2.08. Valassis Communications Inc's Shiller P/E Ratio of today is 16.36.

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, Valassis Communications Inc's adjusted earnings per share data for the three months ended in Sep. 2013 was:

 Adj_EPS = Earnigns per Share / CPI of Sep. 2013 (Change) * Current CPI (Sep. 2013) = 0.7 / 234.149 * 234.149 = 0.700

Current CPI (Sep. 2013) = 234.149.

Valassis Communications Inc Quarterly Data

 201106 201109 201112 201203 201206 201209 201212 201303 201306 201309 per share eps 0.6 0.58 0.764 0.6 0.51 0.9 0.849 0.54 0.68 0.7 CPI 225.722 226.889 225.672 229.392 229.478 231.407 229.601 232.773 233.504 234.149 Adj_EPS 0.622 0.599 0.793 0.612 0.52 0.911 0.866 0.543 0.682 0.7 200812 200903 200906 200909 200912 201003 201006 201009 201012 201103 per share eps -4.596 0.27 0.33 0.28 0.489 6.26 0.21 0.52 0.479 0.41 CPI 210.228 212.709 215.693 215.969 215.949 217.631 217.965 218.439 219.179 223.467 Adj_EPS -5.119 0.297 0.358 0.304 0.53 6.735 0.226 0.557 0.512 0.43 200606 200609 200612 200703 200706 200709 200712 200803 200806 200809 per share eps 0.41 0.14 0.143 0.23 0.2 0.34 0.43 0.26 0.15 -0.11 CPI 202.9 202.9 201.8 205.352 208.352 208.49 210.036 213.528 218.815 218.783 Adj_EPS 0.473 0.162 0.166 0.262 0.225 0.382 0.479 0.285 0.161 -0.118 200312 200403 200406 200409 200412 200503 200506 200509 200512 200603 per share eps 0.445 0.47 0.51 0.43 0.518 0.55 0.5 0.42 0.422 0.38 CPI 184.3 187.4 189.7 189.9 190.3 193.3 194.5 198.8 196.8 199.8 Adj_EPS 0.565 0.587 0.629 0.53 0.637 0.666 0.602 0.495 0.502 0.445

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.

Valassis Communications Inc's Shiller P/E Ratio of today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 34.02 / 2.08 = 16.36

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

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 own currency.

Valassis Communications Inc Annual Data

 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 e10 2.01 2.16 2.16 1.95 1.80 0.74 0.60 1.49 1.57 1.87

Valassis Communications Inc Quarterly Data

 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 e10 1.50 1.53 1.57 1.62 1.63 1.77 1.87 1.93 2.03 2.08
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