Tuesday, August 11, 2015

What are Consensus Earnings Estimates (Earnings Forecast)?




"What are Consensus Earnings?
Consensus earnings estimates are far from perfect, but they are watched by many investors and play an important role in measuring the appropriate valuation for a stock. Investors measure stock performance on the basis of a company's earnings power. To make a proper assessment, investors seek a sound estimate of this year's and next year's earnings per share (EPS), as well as a strong sense of how much the company will earn even farther down the road. (For further reading, see Earnings Guidance: The Good, The Bad And Good Riddance?)

That's why, as part of their services to clients, large brokerage firms such as Citigroup and Merrill Lynch (the "sell side" of Wall Street and other investment communities) employ legions of stock analysts to publish forecast reports on companies' earnings over the coming years.

A consensus forecast number is normally an average or median of all the forecasts from individual analysts tracking a particular stock. So, when you hear that a company is expected to earn $1.50 per-share this year, that number could be the average of 30 different forecasts. On the other hand, if it's a smaller company, the estimate could be the average of just one or two stock analyst forecasts.

A few companies, such as Thomson First Call, Reuters and Zacks Investment Research, compile estimates and compute the average or consensus. Consensus numbers can also be found at a number of financial websites, including Yahoo! Finance and MSN MoneyCentral. Some of these sites also show how estimates get revised upwards or downwards.

Consensus estimates of quarterly earnings are published for the current quarter, the next quarter and so on for about eight quarters. In some cases, forecasts are available beyond the first few quarters. Forecasts are also compiled for the current and next 12 month periods.

A consensus forecast for the current year is reported once actual results for the previous year are released. As actual numbers are made available, analysts typically revise their projections within the quarter or year they are forecasting.


Even the most sophisticated investors - such as mutual fund and pension fund managers - rely heavily on consensus estimates. Most of them do not have the resources to track thousands of publicly-listed companies in detail - or even to keep tabs on a fraction of them, for that matter.






DEFINITION of 'Consensus Estimate'
A figure based on the combined estimates of the analysts covering a public company. Generally, analysts give a consensus for a company's earnings per share and revenue; these figures are most often made for the quarter, fiscal year and next fiscal year. The size of the company and the number of analysts covering it will dictate the size of the pool from which the estimate is derived.

INVESTOPEDIA EXPLAINS'Consensus Estimate'
When you hear that a company has "missed estimates" or "beaten estimates", these are references to consensus estimates. Based on projections, models, sentiments and research, analysts strive to come up with an estimate of what the company will do in the future. 

Obviously, consensus estimates are not an exact science. This leads some market pundits to believe that the market is not as efficient as often purported, and that the efficiency is driven by estimates about a multitude of future events that may not be accurate. This might help to explain why a company's stock quickly adjusts to the new information provided by quarterly earnings and revenue numbers when these figures diverge from the consensus estimate.





Conclusion: Implications for Investors
Consensus estimates are so powerful that even small deviations can send a stock higher or lower. If a company exceeds its consensus estimates, it is usually rewarded with an increase in stock price. If a company falls short of consensus numbers - or sometimes if it only meets expectations - its share price can take a hit.

With so many investors watching consensus numbers, the difference between actual and consensus earnings is perhaps the single most important factor driving share-price performance over the short term. This should come as little surprise to anyone who has owned a stock that "missed the consensus" by a few pennies per share and, as a result, tumbled in value.

For better or for worse, the investment community relies on earnings as its key metric. Stocks are judged not only by their ability to increase earnings quarter over quarter, but also by whether they are able to meet or beat a consensus earnings estimate. Like it or not, investors need to keep an eye on consensus numbers in order to keep tabs on how a stock is likely to perform."






Monday, August 10, 2015

What is Earnings Season?




"DEFINITION of 'Earnings Season'
The months of the year in which a majority of quarterly corporate earnings are released to the public. Earnings season is generally accepted as the months immediately following the quarter-ends of the year, which means that earnings seasons would fall in January, April, July and October. This is due to the lag between quarter-end periods and the time in which firms are able to release their earnings following their accounting periods.

INVESTOPEDIA EXPLAINS'Earnings Season'
Earnings season is easily one of the busiest times of the year for those who work in and watch the markets, as virtually every large publicly-traded company will report the results of their last quarter. Analysts and managers typically set their guidelines and estimates to correspond to specific quarters or fiscal year ends, so the results reported by firms during earnings season often have a big role in the performance of their stocks. "



Friday, August 7, 2015

Top-line and Bottom-line (Earnings).



Four times per year you will hear the phrases "top-line" and "bottom-line" as it pertains to earnings. Those four times per year is known as Earnings Season, which starts 2-weeks after the end of a quarter and last for one month. During earnings season (Mid-January-Mid-February, Mid-April-Mid-May, Mid-July-Mid August, Mid-October-Mid-November) a publicly traded company will have a earnings call (conference call) to discuss the business after a 10-Q (quarterly financial report) or after a 10-K (annual financial report) is filled with the SEC.




Top Line = Gross Sales/ Revenue of a company
Bottom Line = Net Income (Revenue minus Cost of doing business) of a company and is usually stated as EPS (Net Income/Shares outstanding) for media purposes and investor purposes. 






Sunday, August 2, 2015

Stay Abreast of Class Action Settlements! (Don't Leave Money on the Table)



Companies will not make a full effort to reach out to you for settlements. I check out http://topclassactions.com/lawsuit-settlements/open-lawsuit-settlements/ to see what is going on in that arena. They have a list of open settlements and news about lawsuits so you can get your fair share of money. Hundreds and even thousands of dollars are waiting for you to claim! The site does not require you to sign-up and is a good point of reference for extra cash in which you may be entitled. I found out about this website a couple of days ago and I have found several settlements for which I am qualified, and unfortunately several settlements in which I have missed out upon.... *sigh*

Do not miss out on extra cash for your pockets, extra cash for your gas tanks, and extra cash for your investments! Great resource!




Thursday, July 30, 2015

How to Implement a Twitter Card for Blogger.








In order to add Twitter Cards in Blogger you have to add a few lines of code to your template. Before editing the template remember to back it up first, then click on edit html, and copy the below code after the <head> opening tag.








The Code:


<meta content='summary_large_image' name='twitter:card'/>
<meta content='@IcebergGem' name='twitter:creator'/>
<meta content='@IcebergGem' name='twitter:site'/>
<meta expr:content='data:blog.homepageUrl' name='twitter:domain'/>
<b:if cond='data:blog.pageType == &quot;item&quot;'>
<meta name="twitter:url" expr:content='data:blog.url' />
<meta expr:content='data:blog.pageName' name='twitter:title'/>
<meta expr:content='data:blog.postImageUrl' name='twitter:image:src'/>
<b:else/>
<meta expr:content='data:blog.homepageUrl' name='twitter:url'/>
<meta expr:content='data:blog.pageTitle' name='twitter:title'/>
<meta content='Image URL' name='twitter:image:src'/>
</b:if>
<b:if cond='data:blog.metaDescription'>
<meta expr:content='data:blog.metaDescription' name='twitter:description'/>
</b:if>
<meta expr:content='data:blog.Url' name='twitter:url'/>





The above code will Add Summary large image Twitter Card. Before adding the code remember replace my IcebergGem twitter handle with yours.



Next, you need to go Twitter Validator ( https://cards-dev.twitter.com/validator ) to test the code. And please make sure all of your Blog posts have a search description and your Blog/Website in general has a search description or it will not work.