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Fabrinet  (NYSE:FN) E10: $1.68 (As of Sep. 2017)

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.

Fabrinet's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.550. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.68 for the trailing ten years ended in Sep. 2017.

As of today, Fabrinet's current stock price is $32.76. Fabrinet's E10 for the quarter that ended in Sep. 2017 was $1.68. Fabrinet's Shiller PE Ratio of today is 19.50.

During the past 12 years, the highest Shiller PE Ratio of Fabrinet was 27.70. The lowest was 18.52. And the median was 22.96.


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.

Fabrinet Annual Data

Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.00 0.00 0.00 0.00 1.65

Fabrinet Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
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 0.00 0.00 0.00 1.65 1.68

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, Fabrinet's adjusted earnings per share data for the three months ended in Sep. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2017 (Change)*Current CPI (Sep. 2017)
=0.55/246.819*246.819
=0.550

Current CPI (Sep. 2017) = 246.819.

Fabrinet Quarterly Data

per share eps CPI Adj_EPS
200706 0.000 208.352 0.000
200709 0.000 208.490 0.000
200806 1.710 218.815 1.929
200809 0.000 218.783 0.000
200812 0.000 210.228 0.000
200903 0.110 212.709 0.128
200906 0.120 215.693 0.137
200909 0.200 215.969 0.229
200912 0.350 215.949 0.400
201003 0.430 217.631 0.488
201006 0.430 217.965 0.487
201009 0.440 218.439 0.497
201012 0.460 219.179 0.518
201103 0.490 223.467 0.541
201106 0.480 225.722 0.525
201109 0.450 226.889 0.490
201112 -0.970 225.672 -1.061
201203 -1.350 229.392 -1.453
201206 0.220 229.478 0.237
201209 0.460 231.407 0.491
201212 0.480 229.601 0.516
201303 0.610 232.773 0.647
201306 0.430 233.504 0.455
201309 0.550 234.149 0.580
201312 0.410 233.049 0.434
201403 1.330 236.293 1.389
201406 0.290 238.343 0.300
201409 0.310 238.031 0.321
201412 0.240 234.812 0.252
201503 0.300 236.119 0.314
201506 0.360 238.638 0.372
201509 0.040 237.945 0.041
201512 0.540 236.525 0.564
201603 0.560 238.132 0.580
201606 0.530 241.018 0.543
201609 0.610 241.428 0.624
201612 0.670 241.432 0.685
201703 0.570 243.801 0.577
201706 0.720 244.955 0.725
201709 0.550 246.819 0.550

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.

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

Shiller PE Ratio=Share Price/E10
=32.76/1.68
=19.50

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

During the past 12 years, the highest Shiller P/E Ratio of Fabrinet was 27.70. The lowest was 18.52. And the median was 22.96.


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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