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Berkshire Hathaway Inc  (NYSE:BRK.B) E10: $6.71 (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.

Berkshire Hathaway Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was $1.649. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $6.71 for the trailing ten years ended in Sep. 2017.

As of today, Berkshire Hathaway Inc's current stock price is $181.63. Berkshire Hathaway Inc's E10 for the quarter that ended in Sep. 2017 was $6.71. Berkshire Hathaway Inc's Shiller PE Ratio of today is 27.07.

During the past 13 years, the highest Shiller PE Ratio of Berkshire Hathaway Inc was 33.65. The lowest was 16.40. And the median was 23.22.


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.

Berkshire Hathaway Inc 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 4.61 5.02 5.41 6.02 6.54

Berkshire Hathaway 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 6.48 6.54 6.64 6.69 6.71

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, Berkshire Hathaway 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)
=1.649/246.819*246.819
=1.649

Current CPI (Sep. 2017) = 246.819.

Berkshire Hathaway Inc Quarterly Data

per share eps CPI Adj_EPS
200712 1.269 210.036 1.491
200803 0.405 213.528 0.468
200806 1.239 218.815 1.398
200809 0.455 218.783 0.513
200812 0.050 210.228 0.059
200903 -0.660 212.709 -0.766
200906 1.415 215.693 1.619
200909 1.391 215.969 1.590
200912 1.313 215.949 1.501
201003 1.515 217.631 1.718
201006 0.797 217.965 0.903
201009 1.209 218.439 1.366
201012 1.775 219.179 1.999
201103 0.611 223.467 0.675
201106 1.381 225.722 1.510
201109 0.920 226.889 1.001
201112 1.231 225.672 1.346
201203 1.311 229.392 1.411
201206 1.255 229.478 1.350
201209 1.582 231.407 1.687
201212 1.838 229.601 1.976
201303 1.985 232.773 2.105
201306 1.842 233.504 1.947
201309 2.049 234.149 2.160
201312 2.024 233.049 2.144
201403 1.908 236.293 1.993
201406 2.593 238.343 2.685
201409 1.874 238.031 1.943
201412 1.687 234.812 1.773
201503 2.095 236.119 2.190
201506 1.628 238.638 1.684
201509 3.825 237.945 3.968
201512 2.222 236.525 2.319
201603 2.267 238.132 2.350
201606 2.028 241.018 2.077
201609 2.919 241.428 2.984
201612 2.549 241.432 2.606
201703 1.646 243.801 1.666
201706 1.728 244.955 1.741
201709 1.649 246.819 1.649

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.

Berkshire Hathaway Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=181.63/6.71
=27.07

* 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 Berkshire Hathaway Inc was 33.65. The lowest was 16.40. And the median was 23.22.


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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