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Broadcom Corp  (NAS:BRCM) E10: $1.08 (As of Sep. 2015)

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.

Broadcom Corp's adjusted earnings per share data for the three months ended in Sep. 2015 was $0.690. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.08 for the trailing ten years ended in Sep. 2015.

As of today, Broadcom Corp's current stock price is $54.67. Broadcom Corp's E10 for the quarter that ended in Sep. 2015 was $1.08. Broadcom Corp's Shiller PE Ratio of today is 50.62.


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.

Broadcom Corp Annual Data

Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.34 -0.31 0.51 0.87 0.95

Broadcom Corp Quarterly Data

Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15
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 0.90 0.95 0.97 1.04 1.08

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, Broadcom Corp's adjusted earnings per share data for the three months ended in Sep. 2015 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2015 (Change)*Current CPI (Sep. 2015)
=0.69/237.945*237.945
=0.690

Current CPI (Sep. 2015) = 237.945.

Broadcom Corp Quarterly Data

per share eps CPI Adj_EPS
200512 0.330 196.800 0.399
200603 0.200 199.800 0.238
200606 0.180 202.900 0.211
200609 0.190 202.900 0.223
200612 0.070 201.800 0.083
200703 0.100 205.352 0.116
200706 0.060 208.352 0.069
200709 0.050 208.490 0.057
200712 0.160 210.036 0.181
200803 0.140 213.528 0.156
200806 0.250 218.815 0.272
200809 0.310 218.783 0.337
200812 -0.290 210.228 -0.328
200903 -0.190 212.709 -0.213
200906 0.030 215.693 0.033
200909 0.160 215.969 0.176
200912 0.120 215.949 0.132
201003 0.400 217.631 0.437
201006 0.520 217.965 0.568
201009 0.600 218.439 0.654
201012 0.470 219.179 0.510
201103 0.400 223.467 0.426
201106 0.310 225.722 0.327
201109 0.480 226.889 0.503
201112 0.460 225.672 0.485
201203 0.150 229.392 0.156
201206 0.280 229.478 0.290
201209 0.380 231.407 0.391
201212 0.430 229.601 0.446
201303 0.330 232.773 0.337
201306 -0.430 233.504 -0.438
201309 0.550 234.149 0.559
201312 0.290 233.049 0.296
201403 0.280 236.293 0.282
201406 -0.002 238.343 -0.002
201409 0.160 238.031 0.160
201412 0.640 234.812 0.649
201503 0.340 236.119 0.343
201506 0.630 238.638 0.628
201509 0.690 237.945 0.690

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.

Broadcom Corp's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=54.67/1.08
=50.62

* 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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