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LKQ Corp  (NAS:LKQ) E10: $1.00 (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.

LKQ Corp's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.390. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.00 for the trailing ten years ended in Sep. 2017.

As of today, LKQ Corp's current stock price is $42.73. LKQ Corp's E10 for the quarter that ended in Sep. 2017 was $1.00. LKQ Corp's Shiller PE Ratio of today is 42.73.

During the past 13 years, the highest Shiller PE Ratio of LKQ Corp was 69.23. The lowest was 30.37. And the median was 43.38.


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.

LKQ Corp Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.41 0.50 0.61 0.74 0.88

LKQ Corp 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 0.85 0.88 0.92 0.96 1.00

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, LKQ Corp'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)
=0.39/246.819*246.819
=0.390

Current CPI (Sep. 2017) = 246.819.

LKQ Corp Quarterly Data

per share eps CPI Adj_EPS
200712 0.080 210.036 0.094
200803 0.110 213.528 0.127
200806 0.110 218.815 0.124
200809 0.090 218.783 0.102
200812 0.045 210.228 0.053
200903 0.115 212.709 0.133
200906 0.100 215.693 0.114
200909 0.100 215.969 0.114
200912 0.130 215.949 0.149
201003 0.185 217.631 0.210
201006 0.130 217.965 0.147
201009 0.125 218.439 0.141
201012 0.140 219.179 0.158
201103 0.195 223.467 0.215
201106 0.160 225.722 0.175
201109 0.170 226.889 0.185
201112 0.190 225.672 0.208
201203 0.270 229.392 0.291
201206 0.210 229.478 0.226
201209 0.180 231.407 0.192
201212 0.210 229.601 0.226
201303 0.280 232.773 0.297
201306 0.250 233.504 0.264
201309 0.240 234.149 0.253
201312 0.250 233.049 0.265
201403 0.340 236.293 0.355
201406 0.340 238.343 0.352
201409 0.300 238.031 0.311
201412 0.260 234.812 0.273
201503 0.350 236.119 0.366
201506 0.390 238.638 0.403
201509 0.330 237.945 0.342
201512 0.310 236.525 0.323
201603 0.360 238.132 0.373
201606 0.460 241.018 0.471
201609 0.400 241.428 0.409
201612 0.280 241.432 0.286
201703 0.440 243.801 0.445
201706 0.490 244.955 0.494
201709 0.390 246.819 0.390

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.

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

Shiller PE Ratio=Share Price/E10
=42.73/1.00
=42.73

* 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 LKQ Corp was 69.23. The lowest was 30.37. And the median was 43.38.


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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