FYI | Jun 23 2017
If one only had one indicator to use when making investment decisions, that indicator should be corporate earnings going forward. Of course, by the time we all find out how good/bad corporate earnings are, the horse has usually long bolted. Which is why market forecasts become the next best indicator.
Share prices do not always move in line with profit forecasts, at times share prices and forecasts can move in opposite directions, but it is not too far fetched to conclude that, ultimately, share prices end up where corporate profits lead them. Here's how legendary investor Peter Lynch put it:
"If you can follow only one bit of data, follow the earnings – assuming the company in question has earnings. I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction."
Which is why FNArena registers and monitors changes in stockbroking analysts expectations. The new website, launched in February 2017, offers three obvious tools for paid subscribers to monitor changes in forecasts:
–The Australian Broker Call Report – report published daily about changes and updates on analysts' views, ratings and forecasts
–Stock Analysis – data and insights on more than 400 ASX-listed stocks
–Weekly Ratings, Targets, Forecast Changes – weekly update story published every Monday on the FNArena website
A special mention goes out to the price charts that are available via Stock Analysis, underneath which a visual set of two lines (yellow and purple) shows the evolution of earnings per share (EPS) forecasts for the current and following financial year. Shares of companies for which projected EPS in year two (purple) is lower than for year one (yellow) usually don't perform well, unless a change in dynamics is forthcoming.
FNArena's team of journalists updates these forecasts every day as yet another Australian Broker Call Report is being compiled and published, so paying subscribers have no excuse for not being aware that market forecasts are changing, either way.
A sample of the typical FNArena share price graph:
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.