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As of today, Transocean Ltd's share price is $40.58. Transocean Ltd's diluted earnings per share for the trailing twelve months (TTM) ended in Dec. 2013 was $3.87. Therefore, Transocean Ltd's P/E ratio for today is 10.50.
Transocean Ltd stock P/E Ratio (=10.40) is close to 3-year low of 10.04
During the past 13 years, the highest P/E Ratio of Transocean Ltd was 517.19. The lowest was 3.22. And the median was 11.95.
As of today, Transocean Ltd's share price is $40.58. Transocean Ltd's earnings per share without non-recurring items for the trailing twelve months (TTM) ended in Dec. 2013 was $3.87. Therefore, Transocean Ltd's P/E (NRI) ratio for today is 10.20.
During the past 13 years, Transocean Ltd's highest P/E (NRI) Ratio was 491.33. The lowest was 3.23. And the median was 12.28.
Transocean Ltd's earnings per share without non-recurring items for the three months ended in Dec. 2013 was $0.63. Its earnings per share without non-recurring items for the trailing twelve months (TTM) ended in Dec. 2013 was $3.87.
Transocean Ltd's basic earnings per share (Basic EPS) for the three months ended in Dec. 2013 was $0.65. Its basic earnings per share (Basic EPS) for the trailing twelve months (TTM) ended in Dec. 2013 was $3.87.
The P/E ratio is the most widely used ratio in the valuation of stocks.
Transocean Ltd's P/E Ratio for today is calculated as
|P/E Ratio||=||Share Price||/||Earnings per Share (TTM)|
Transocean Ltd's Share Price of today is $40.58.
Transocean Ltd's Earnings per Share for the trailing twelve months (TTM) ended in Dec. 2013 was 0.88 (Mar. 2013 ) + 0.84 (Jun. 2013 ) + 1.5 (Sep. 2013 ) + 0.647 (Dec. 2013 ) = $3.87.
It can also be calculated from the numbers for the whole company:
There are at least three kinds of P/E ratios used by different investors. They are Trailing Twelve Month P/E Ratio or P/E (ttm), forward P/E, or P/E (NRI). A new P/E ratio based on inflation-adjusted normalized P/E ratio is called Shiller P/E, after Yale professor Robert Shiller.
In the calculation of P/E (ttm), the earnings per share used are the earnings per share over the past 12 months. For Forward P/E, the earnings are the expected earnings for the next twelve months. In the case of P/E (NRI), the reported earnings less the non-recurring items are used.
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, Shiller P/E is also called PE10.
The P/E ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the P/E ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.
In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a companys earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower-P/E stocks are more attractive than higher P/E stocks so long as the P/E ratio is positive. Also for stocks with the same P/E ratio, the one with faster growth business is more attractive.
If a company loses money, the P/E ratio becomes mearningless.
To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG. PEG is defined as the P/E ratio divided by the growth ratio. He thinks a company with a P/E ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a P/E of 20, instead of a company growing 10% a year with a P/E of 10.
Because the P/E ratio measures how long it takes to earn back the price you pay, the P/E ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.
Similar to the Price/Sales ratio and Price/Cash Flow or Price/Free Cash Flow, the P/E ratio measures the valuation based on the earning power of the company. This is where it is different from the Price/Book ratio, which measures the valuation based on the companys balance sheet.
Investors need to be aware that the P/E ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and P/E ratios are artificially low. It is usually a bad idea to buy a cyclical business when the P/E is low. A better ratio to identify the time to buy a cyclical businesses is the Price-to-Sales Ratio (P/S).
P/E ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore P/E (NRI) is a more accurate indication of valuation than P/E (ttm).
Transocean Ltd Annual Data
Transocean Ltd Quarterly Data