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PMC-Sierra Inc  (NAS:PMCS) E10: \$-0.09 (As of Sep. 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.

PMC-Sierra Inc's adjusted earnings per share data for the three months ended in Sep. 2015 was \$0.030. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$-0.09 for the trailing ten years ended in Sep. 2015.

As of today, PMC-Sierra Inc's current stock price is \$11.65. PMC-Sierra Inc's E10 for the quarter that ended in Sep. 2015 was \$-0.09. PMC-Sierra Inc's Shiller PE Ratio of today is .

Historical Data

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

PMC-Sierra Inc Annual Data

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 E10 -0.45 0.06 -0.04 -0.05 -0.09

PMC-Sierra Inc Quarterly Data

 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 E10 -0.08 -0.09 -0.09 -0.09 -0.09

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, PMC-Sierra Inc's adjusted earnings per share data for the three months ended in Sep. 2015 was:

 Adj_EPS = Earnings per Share (Diluted) / CPI of Sep. 2015 (Change) * Current CPI (Sep. 2015) = 0.03 / 237.945 * 237.945 = 0.030

Current CPI (Sep. 2015) = 237.945.

PMC-Sierra Inc Quarterly Data

 per share eps CPI Adj_EPS 200512 0.097 196.800 0.117 200603 -0.080 199.800 -0.095 200606 -0.160 202.900 -0.188 200609 -0.050 202.900 -0.059 200612 -0.199 201.800 -0.235 200703 -0.070 205.352 -0.081 200706 -0.100 208.352 -0.114 200709 -0.030 208.490 -0.034 200712 -0.023 210.036 -0.026 200803 -0.100 213.528 -0.111 200806 0.610 218.815 0.663 200809 0.030 218.783 0.033 200812 0.036 210.228 0.041 200903 -0.020 212.709 -0.022 200906 0.030 215.693 0.033 200909 0.120 215.969 0.132 200912 0.065 215.949 0.072 201003 0.120 217.631 0.131 201006 0.130 217.965 0.142 201009 0.060 218.439 0.065 201012 0.017 219.179 0.018 201103 -0.030 223.467 -0.032 201106 0.070 225.722 0.074 201109 0.200 226.889 0.210 201112 0.063 225.672 0.066 201203 -0.290 229.392 -0.301 201206 0.000 229.478 0.000 201209 -1.310 231.407 -1.347 201212 0.092 229.601 0.095 201303 -0.040 232.773 -0.041 201306 -0.020 233.504 -0.020 201309 -0.020 234.149 -0.020 201312 -0.078 233.049 -0.080 201403 -0.020 236.293 -0.020 201406 -0.020 238.343 -0.020 201409 0.030 238.031 0.030 201412 0.011 234.812 0.011 201503 0.020 236.119 0.020 201506 -0.040 238.638 -0.040 201509 0.030 237.945 0.030

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.

PMC-Sierra Inc's Shiller P/E Ratio of today is calculated as

 Shiller PE Ratio = Share Price / E10 = 11.65 / -0.09 =

* 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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