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Legg Mason Inc  (NYSE:LM) E10: $-0.73 (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.

Legg Mason Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.780. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $-0.73 for the trailing ten years ended in Sep. 2017.

As of today, Legg Mason Inc's current stock price is $39.00. Legg Mason Inc's E10 for the quarter that ended in Sep. 2017 was $-0.73. Legg Mason Inc's Shiller PE Ratio of today is .

During the past 13 years, the highest Shiller PE Ratio of Legg Mason Inc was 70.20. The lowest was 0.00. And the median was 21.28.


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.

Legg Mason Inc Annual Data

Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.16 1.06 0.83 -0.23 -0.55

Legg Mason Inc 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 -0.38 -0.48 -0.55 -0.66 -0.73

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, Legg Mason Inc'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)
=0.78/246.819*246.819
=0.780

Current CPI (Sep. 2017) = 246.819.

Legg Mason Inc Quarterly Data

per share eps CPI Adj_EPS
200712 1.070 210.036 1.257
200803 -1.800 213.528 -2.081
200806 -0.260 218.815 -0.293
200809 -0.770 218.783 -0.869
200812 -10.590 210.228 -12.433
200903 -2.350 212.709 -2.727
200906 0.350 215.693 0.401
200909 0.300 215.969 0.343
200912 0.280 215.949 0.320
201003 0.400 217.631 0.454
201006 0.300 217.965 0.340
201009 0.500 218.439 0.565
201012 0.410 219.179 0.462
201103 0.430 223.467 0.475
201106 0.400 225.722 0.437
201109 0.390 226.889 0.424
201112 0.200 225.672 0.219
201203 0.540 229.392 0.581
201206 -0.070 229.478 -0.075
201209 0.600 231.407 0.640
201212 -3.450 229.601 -3.709
201303 0.190 232.773 0.201
201306 0.380 233.504 0.402
201309 0.700 234.149 0.738
201312 0.670 233.049 0.710
201403 0.580 236.293 0.606
201406 0.610 238.343 0.632
201409 0.040 238.031 0.041
201412 0.670 234.812 0.704
201503 0.720 236.119 0.753
201506 0.840 238.638 0.869
201509 0.580 237.945 0.602
201512 -1.310 236.525 -1.367
201603 -0.420 238.132 -0.435
201606 0.310 241.018 0.317
201609 0.630 241.428 0.644
201612 0.500 241.432 0.511
201703 0.750 243.801 0.759
201706 0.520 244.955 0.524
201709 0.780 246.819 0.780

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.

Legg Mason Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=39.00/-0.73
=

* 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 Legg Mason Inc was 70.20. The lowest was 0.00. And the median was 21.28.


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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