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Airgas Inc  (NYSE:ARG) E10: $3.74 (As of Mar. 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.

Airgas Inc's adjusted earnings per share data for the three months ended in Mar. 2016 was $1.050. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.74 for the trailing ten years ended in Mar. 2016.

As of today, Airgas Inc's current stock price is $142.95. Airgas Inc's E10 for the quarter that ended in Mar. 2016 was $3.74. Airgas Inc's Shiller PE Ratio of today is 38.22.


Historical Data

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

* Premium members only.

Airgas Inc Annual Data

Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.38 2.72 3.11 3.45 3.74

Airgas Inc Quarterly Data

Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.45 3.55 3.63 3.65 3.74

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

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, Airgas Inc's adjusted earnings per share data for the three months ended in Mar. 2016 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Mar. 2016 (Change)*Current CPI (Mar. 2016)
=1.05/238.132*238.132
=1.050

Current CPI (Mar. 2016) = 238.132.

Airgas Inc Quarterly Data

per share eps CPI Adj_EPS
200606 0.480 202.900 0.563
200609 0.490 202.900 0.575
200612 0.400 201.800 0.472
200703 0.533 205.352 0.618
200706 0.630 208.352 0.720
200709 0.600 208.490 0.685
200712 0.670 210.036 0.760
200803 0.762 213.528 0.850
200806 0.810 218.815 0.882
200809 0.860 218.783 0.936
200812 0.760 210.228 0.861
200903 0.682 212.709 0.764
200906 0.660 215.693 0.729
200909 0.650 215.969 0.717
200912 0.560 215.949 0.618
201003 0.475 217.631 0.520
201006 0.760 217.965 0.830
201009 0.780 218.439 0.850
201012 0.650 219.179 0.706
201103 0.748 223.467 0.797
201106 0.940 225.722 0.992
201109 1.010 226.889 1.060
201112 0.930 225.672 0.981
201203 1.124 229.392 1.167
201206 1.150 229.478 1.193
201209 1.030 231.407 1.060
201212 1.050 229.601 1.089
201303 1.125 232.773 1.151
201306 1.140 233.504 1.163
201309 1.270 234.149 1.292
201312 1.100 233.049 1.124
201403 1.175 236.293 1.184
201406 1.180 238.343 1.179
201409 1.300 238.031 1.301
201412 1.230 234.812 1.247
201503 1.151 236.119 1.161
201506 1.160 238.638 1.158
201509 1.310 237.945 1.311
201512 1.010 236.525 1.017
201603 1.050 238.132 1.050

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 PE 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.

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

Shiller PE Ratio=Share Price/E10
=142.95/3.74
=38.22

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


Be Aware

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


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