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Keurig Green Mountain Inc  (NAS:GMCR) E10: $1.60 (As of Dec. 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.

Keurig Green Mountain Inc's adjusted earnings per share data for the three months ended in Dec. 2015 was $0.690. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.60 for the trailing ten years ended in Dec. 2015.

As of today, Keurig Green Mountain Inc's current stock price is $91.67. Keurig Green Mountain Inc's E10 for the quarter that ended in Dec. 2015 was $1.60. Keurig Green Mountain Inc's Shiller PE Ratio of today is 57.29.


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.

Keurig Green Mountain Inc Annual Data

Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.31 0.54 0.86 1.24 1.55

Keurig Green Mountain Inc Quarterly Data

Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15
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 1.31 1.40 1.49 1.55 1.60

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, Keurig Green Mountain Inc's adjusted earnings per share data for the three months ended in Dec. 2015 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Dec. 2015 (Change)*Current CPI (Dec. 2015)
=0.69/236.525*236.525
=0.690

Current CPI (Dec. 2015) = 236.525.

Keurig Green Mountain Inc Quarterly Data

per share eps CPI Adj_EPS
200603 0.019 199.800 0.022
200606 0.019 202.900 0.022
200609 0.014 202.900 0.016
200612 0.022 201.800 0.026
200703 0.028 205.352 0.032
200706 0.033 208.352 0.037
200709 0.031 208.490 0.035
200712 0.027 210.036 0.030
200803 0.051 213.528 0.056
200806 0.053 218.815 0.057
200809 0.061 218.783 0.066
200812 0.123 210.228 0.138
200903 0.110 212.709 0.122
200906 0.120 215.693 0.132
200909 0.100 215.969 0.110
200912 0.070 215.949 0.077
201003 0.170 217.631 0.185
201006 0.130 217.965 0.141
201009 0.195 218.439 0.211
201012 0.020 219.179 0.022
201103 0.440 223.467 0.466
201106 0.370 225.722 0.388
201109 0.470 226.889 0.490
201112 0.660 225.672 0.692
201203 0.580 229.392 0.598
201206 0.460 229.478 0.474
201209 0.581 231.407 0.594
201212 0.700 229.601 0.721
201303 0.870 232.773 0.884
201306 0.760 233.504 0.770
201309 0.828 234.149 0.836
201312 0.910 233.049 0.924
201403 1.030 236.293 1.031
201406 0.940 238.343 0.933
201409 0.857 238.031 0.852
201412 0.820 234.812 0.826
201503 0.970 236.119 0.972
201506 0.730 238.638 0.724
201509 0.609 237.945 0.605
201512 0.690 236.525 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.

Keurig Green Mountain Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=91.67/1.60
=57.29

* 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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