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Hovnanian Enterprises Inc  (NYSE:HOV) E10: $-3.30 (As of Oct. 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.

Hovnanian Enterprises Inc's adjusted earnings per share data for the three months ended in Oct. 2017 was $0.080. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $-3.30 for the trailing ten years ended in Oct. 2017.

As of today, Hovnanian Enterprises Inc's current stock price is $2.65. Hovnanian Enterprises Inc's E10 for the quarter that ended in Oct. 2017 was $-3.30. Hovnanian Enterprises Inc's Shiller PE Ratio of today is .

During the past 13 years, the highest Shiller PE Ratio of Hovnanian Enterprises Inc was 15.09. The lowest was 0.00. And the median was 7.89.


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.

Hovnanian Enterprises Inc Annual Data

Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16 Oct17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.45 -2.98 -3.85 -4.18 -3.30

Hovnanian Enterprises Inc Quarterly Data

Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17
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 -4.18 -4.11 -4.06 -4.14 -3.30

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, Hovnanian Enterprises Inc's adjusted earnings per share data for the three months ended in Oct. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Oct. 2017 (Change)*Current CPI (Oct. 2017)
=0.08/246.663*246.663
=0.080

Current CPI (Oct. 2017) = 246.663.

Hovnanian Enterprises Inc Quarterly Data

per share eps CPI Adj_EPS
200801 -2.070 211.080 -2.419
200804 -5.290 214.823 -6.074
200807 -2.670 219.964 -2.994
200810 -6.060 216.573 -6.902
200901 -2.290 211.143 -2.675
200904 -1.500 213.240 -1.735
200907 -2.160 215.351 -2.474
200910 -3.200 216.177 -3.651
201001 2.970 216.687 3.381
201004 -0.360 218.009 -0.407
201007 -0.920 218.011 -1.041
201010 -1.680 218.711 -1.895
201101 -0.820 220.223 -0.918
201104 -0.690 224.906 -0.757
201107 -0.470 225.922 -0.513
201110 -0.930 226.421 -1.013
201201 -0.170 226.665 -0.185
201204 0.020 230.085 0.021
201207 0.250 229.104 0.269
201210 -0.670 231.317 -0.714
201301 -0.080 230.280 -0.086
201304 0.010 232.531 0.011
201307 0.060 233.596 0.063
201310 0.230 233.546 0.243
201401 -0.170 233.916 -0.179
201404 -0.050 237.072 -0.052
201407 0.110 238.250 0.114
201410 1.970 237.433 2.047
201501 -0.100 233.707 -0.106
201504 -0.130 236.599 -0.136
201507 -0.050 238.654 -0.052
201510 0.170 237.838 0.176
201601 -0.110 236.916 -0.115
201604 -0.060 239.261 -0.062
201607 -0.003 240.628 -0.003
201610 0.150 241.729 0.153
201701 -0.001 242.839 -0.001
201704 -0.050 244.524 -0.050
201707 -2.280 244.786 -2.297
201710 0.080 246.663 0.080

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.

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

Shiller PE Ratio=Share Price/E10
=2.65/-3.30
=

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

During the past 13 years, the highest Shiller P/E Ratio of Hovnanian Enterprises Inc was 15.09. The lowest was 0.00. And the median was 7.89.


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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