Its Earning That Count Summary

8/20/2019 Its Earning That Count Summary

1/115


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$$

Pre!ace

Wh We Ha#e to 'e at the Topo! +,r *ame


3/115

-

Which Asset C"ass Is 'etter a",e Toda /

Stocks: Bonds:

S&P 500: 1355S&P earnings (TTM): $66

10-year Treasury: 3 5!"

S&P 500 earnings source is Barron#s Market data as o % r ' !00


4/115

0

Stoc1s 'etter a",e Than 'onds2P3E 'asis

Stocks: Bonds:

!1* (1355+$66) ! * (1+3 5!)


5/115

P+, Mis eads . ,cono/y %t .n ection Point


6/115

4

Rea" (%56ear P3E7 The Stoc15'ond *ap Narrows

Stocks BondsS&P 500

ea 10- ear ,arnings (a2g )Bond yie d (10-year Treasury)

1355$5'

3 5!"

P+, !3* ! *

Source: .rrationa ,*u eranceco/ ,arningsPo4er co/


7/115

e etiti2e yc es o ,nt usias/ and 7es air


8/115&&

Wi"" Histor Repeat/

Pea1 Tro,gh Contraction

7ate10 r

P+, S&P 7ate10 r

P+, S&P earsS&P

%8

6+1'01 $89 !3' 1!+1'!0 89 9 (:.8 54;

'+1'!' --9 3 3 6+1'3! 49 9 -.


9/115

55- r %2g 300 s % o2e urrent 3 5!" ie d


10/115(%

I! (%56ear Re#erts) Then 'onds +!!er More a",e

Stocks BondsS&P 500

ea 10- ear ,arnings (a2g )Bond ie d (55-year a2g )

1355$5'

6 "

P+, !3* 16*

%s t e cost o /oney rises cor orate earnings and P+, /u ti es getunis ed


11/115((

We Need to 'e at Top o! +,r *ame

. /arket re2erts to eit er 4e

a2e i) e* icit ear /arket o 30 today or ii) decadeo attis S&P 4 i e earnings catc -u?e do not a2e ene it o P+, e* ansion ca 1' !-1''' 4 en it c i/ ed to * ro/ 9* and roduced a

13" %8.ntroduce ,arnings Po4er 1-!-3 Process to e youna2igate c o y in2est/ent 4aters


12/115

esources:

Pro o ert S i er#s 4e site:

tt :++444 irrationa e*u erance co/+

To 2ie4 t e ea 10- ear P, 7ata c ick ere:


13/115(-(-

Section I

The *rowth Trap


14/115(0(0

Man Wa s to Ma1e Mone on Wa"" Street

Aet-net

Su/-o -t e- arts

isk ar itrage

ata yst

%cti2ist

S ort se ingTec nica ana ysis

*rowth


15/115(8(8

*rowth Stoc17 Compan with Rising EPS

,PS to $1 ! in 1''' ro/ $0 09 in 1''0


16/115


17/115( ?owest P3E =#a",e>Source: Dere/y 8rant a/ 8M@ @ct !009


18/115

(&(&

Three =-> + stac"es Con!ronting *rowth In#estor

1 Poorearnings

ua ity

8%%P inco/e state/ent as our ( ) structurai/itations So Eust ecause a co/ any is ro ita e

in t e traditiona sense o t e 4ord does not /eant at it as aut entic earnings o4er

! o/ etiti2ead2antage4anes

Success u co/ anies attract i/itators T is is goodor consu/ers ad or o4ners

3 Pre/iu/ tointrinsic 2a ue

?e redict y e*tra o ation so gro4t stocks o tenget us ed eyond rea 4ort


19/115

(:(:

Section II

+ stac"e (7 Poor EarningsB,a"it


20/115

$%$%

The *AAP Income Statement

To create co/ ara i ity a co/ anies o o4 genera y acce tedaccounting rinci a s (8%%P)

o ert#s u es o @rder or cor orate %/erica? en you o en an annua re ort 10-F or 10-G and ook at

inancia s state/ents t at#s 8%%PMany in2estors take 8%%P at ace 2a ue> t ey t ink ,PS is < ard=

nu/ er ikeH


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H eig t o Ien4ay#s 8reen Monster (39 eet)


22/115

$$$$

',t EPS is a So!tD N,m er

8%%P inco/e state/ent as our ( ) structura i/itations % do ar o earnings or one co/ any#s /ay not e co/ ara e toa do ar o ,PS ro/ anot er co/ any or or sa/e co/ any ro/one year to ne*t


23/115

$-$-

*AAP P ?Fs Go,r =0> Str,ct,ra" ?imitations

1 .n2est/ent in !i9ed capita" is ignored so 4 en ca ita s endingis greater t an de reciation t e co/ any /ay e ro ita e on

8%%P asis ut s ort cas! @/its in2est/ent in wor1ing capita" so 4 en recei2a es and

in2entory gro4 aster t an aya es and accrued e* enses t eco/ any /ay e ro ita e on 8%%P asis ut s ort cas

-. Intangi "es ike &7 ad2ertising e/ oyee education are

e* ensed e2en t oug t e ene its 4i ast /ore t an oneaccounting eriod

0. Stoc1ho"dersF e ,it is ree e2en t oug o4ners a2e ano ortunity cost


24/115

$0$0


(. In#estment in !i9ed capita" is ignored) so when capita"spending is greater than depreciation the compan ma e

pro!ita "e on *AAP asis ,t short cash.! @/its in2est/ent in wor1ing capita" so 4 en recei2a es and


-. Intangi "es ike &7 ad2ertising e/ oyee education are

e* ensed e2en t oug t e ene its 4i ast /ore t an oneaccounting eriod



25/115

$8

Notes on Capita" Spending

Ii*ed ca ita is ui dings trucks te e one net4orks etc? en a co/ any uys i*ed ca ita it s ends t e cas today ut

or accounting ur oses de reciates out ay o2er asset#s e* ecteduse u i e 7e reciation ena es co/ anies to /atc currentsa es 4it current e* enses and uture sa es 4it uturee* enses. ca e* is greater t an de reciation a co/ any /akesin2est/ent in i*ed ca ita .n2est/ent in i*ed ca ita is a use ocas T is cas out ay as to co/e ro/ so/e4 ere> e gc ecking account i uidate ot er assets orro4ings or stocksa es ?i in2est/ent roduce ig er uture sa es cost sa2ings;Be4are o ca ita -intensi2e co/ anies T e !0" 4it ig estca ita s ending gro4t agged /arket y 1 5" a year during1'93-1''6 4 i e o4est !0" eat /arket y 1" a year (PauStur/ S/art Money Dune !005)


26/115

T eStreet co/ (TS M)


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$


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$&$&

E9pensing In#estment in Gi9ed Capita" s,a"" Red,ces

*AAP Earnings

T eStreet co/ (TS M)($/ s) 8%%P ,* enseAet inco/e (inc $3M o de reciation)

- Ii*ed ca ita in2est/entK %dEusted net inco/e

$31

n+a$31

$31

!$!'


29/115

$:$:

Side ar7 Are Ac ,isitions a Cape9 E ,i#a"ent/

T eStreet co/ (TS M)(/i ions) 8%%P ,* enseAet inco/e

- Ii*ed ca ita in2est/ent- !0" o !009 %c uisition ($30+5 years)K %dEusted net inco/e

$31

n+an+a

$31

$31

!6

$!3

%c uisitions are 1) a use o cas !) a su stitute or ca itas ending and 3) t eir ayo is uncertain 7e reciate dea s o2er 5years


30/115

-%-%


1 .n2est/ent in i*ed ca ita is ignored so 4 en ca ita s ending isgreater t an de reciation t e co/ any /ay e ro ita e on

8%%P asis ut s ort cas$. +mits in#estment in wor1ing capita") so when recei#a "es

and in#entor grow !aster than pa a "es and accr,ede9penses the compan ma e pro!ita "e on *AAP asis ,tshort cash.

-. Intangi "es ike &7 ad2ertising e/ oyee education aree* ensed e2en t oug t e ene its 4i ast /ore t an oneaccounting eriod



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-(

Notes on Wor1ing Capita"

?orking ca ita assets inc ude recei2a es in2entoryot er current assets ( ut not cas /arketa e

securities)> 4orking ca ita ia i ities are aya esaccrued e* enses ?orking ca ita is ? % - ? J? i e it is good to a2e /ore assets t an ia i ities4 en 4orking ca ita increases ro/ one year to ne*tt is is an in2est/ent in 4orking ca ita

.n2est/ent in 4orking ca ita is use o cas t at doesnot a ear in 8%%P inco/e state/ent Sti ike i*edca ita in2est/ent it as to e inanced so/e o4

% ro ita e co/ any can su er i uidity s ueeCe i itcan#t co ect recei2a es and+or se in2entory in ti/e y

/anner


32/115

rocs ( @L)


33/115

----

Str,ct,ra" ?imitation $7 In#estment in Wor1ing Capita"

rocs .nc ( @L)($/i s) 1!+31+06 1!+31+09

?orking ca ita assets:

ecei2a es.n2entoryTota ? assets

?orking ca ita ia i ities:

Paya es %ccrued ,* ensesTota ? ia i ities

Aet 4orking ca ita.n2est/ent in net 4orking ca ita

$666

$15!

$31$95

$99

$153!

$ 01

$ 359$1 0

$!61$1


34/115

-0-0

E9pensing In#estment in Wor1ing Capita" s,a""Red,ces *AAP Earnings

rocs .nc ($/i s) !009

Aet inco/e- .n2est/ent in 4orking ca itaK %dEusted net inco/e

$161$(16)


35/115

-8-8

Sometimes WC is a So,rce o! Cash

B ue Ai e (A.J,) ($/i s) !009

Aet inco/e- .n2est/ent in 4orking ca itaK %dEusted net inco/e

$19(1 )$31

% negati2e in2est/ent in 4orking ca ita is 4onder u > it#s ike a2inga Eo t at ays you today or 4ork you 4i do in t4o 4eeks


36/115

-4-4

Str,ct,ra" ?imitation $7 In#estment in Wor1ing Capita"

B ue Ai e (A.J,)($/i s) 1!+31+06 1!+31+09

?orking ca ita assets:

ecei2a es.n2entoryTota ? assets

?orking ca ita ia i ities:

Paya es %ccrued ,* ensesTota ? ia i ities

Aet 4orking ca ita.n2est/ent in net 4orking ca ita

$!15

$19

$699$9

$(59)

$!1

$!5

$ 610$'6

$(91)$(1 )


37/115

- Str,ct,ra" ?imitations


8%%P asis ut s ort cas! @/its in2est/ent in 4orking ca ita so 4 en recei2a es and


-. Intangi "es "i1e R ) ad#ertising) emp"o ee ed,cation are

e9pensed e#en tho,gh the ene!its wi"" "ast more than oneacco,nting period.Stock o ders# e uity is ree e2en t oug o4ners a2e ano ortunity cost


38/115

-&

Notes on Intangi "es

.ntangi e gro4t - roducing initiati2es are &7 ad2ertising ande/ oyee education ?e ca t e/


39/115

8oog e (8@@8)


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0%0%

epreciation Intangi "es +#er E9pected se!," ?i!es,a"" Increases *AAP Pro!its

8oog e (8@@8)($/ s) - !009 8%%P 7e reciate

Pro it e ore &7- &7K @ erating inco/e.ncrease (")

$9 !0! 1!0$5 0

$9 !01 316$5

16"


41/115

0(0(

Str,ct,ra" ?imitation -7 Intangi "es are E9pensed

8oog e (8@@8)($/ s) !005 !006 !009&7 (8%%P) $5'' $1 !!' $! 1!0

7e reciation eriod 3 3 37e reciation $!00 $ 10 $909

ear 1ear !ear 3

Tota

$!0013!

$ 10!0013!

$90910

!00$1 316

7e reciation eriod is t e use u i e o t e asset . you de reciateo2er t ree years t en you need t ree years# 4ort o &7


42/115

0$0$



8%%P asis ut s ort cas! @/its in2est/ent in 4orking ca ita so 4 en recei2a es and


3 .ntangi es ike &7 ad2ertising e/ oyee education are

e* ensed e2en t oug t e ene its 4i ast /ore t an oneaccounting eriod0. Stoc1ho"dersF e ,it is !ree e#en tho,gh owners ha#e an

opport,nit cost.


43/115

0-

Notes on Stoc1ho"dersF E ,it

% co/ anies inanced y co/ ination o de t ande uity

7e t co/es ro/ anks ond o ders> e uity ro/o4ners 2ia retained earnings (8%%P ro its /inusdi2idends)7e t an e* ense ut e uity is ree ? y; Aoncas

cost> a so di erent o4ners a2e di erent re uiredrates o returnBut 8%%P- ro ita e co/ any /ay destroy 2a ue i youe* ense o4ner o ortunity costs


44/115

P ay oy (PJ%)


45/115

P ay oy#s Stock is Ao Miss % ri


46/115

0404

Str,ct,ra" ?imitation 07 Stoc1ho"dersF E ,it

P ay oy (PB%)($/ s) - !009 8%%P

(e uity ree)

,* ense, uity

Pre-.nterest inco/e (,B.T N in2est/ents)- .nterest - 7e t @n y ($115)- .nterest O 7e t & , uity ($! 3 * 9 1")K Pre-ta* ro it

$1!5

n+a$9

$1!n+a!0

$( )

. t e accounting treat/ent or e uity is sa/e as de t t en re-ta*ro it turns into a re-ta* oss


47/115

0<

Estimating P"a o Fs Interest K e t E ,it =(3$>

%2g !ears

1a ita

?eig ting

! %T ost

o ca ita

1*!?td %2g ost

o a ita

7e t, uityTota

$11516

$! 3

1"5'"

100"

! "10 0"

1 !"5 '"9 1"

Preta* cost o de t K $5 /i ion+$115 /i ion K 3"> a ter-ta* cost K3" * (1-35") K ! " ost o e uity K 10-year Treasury N 500

or /ini/u/ 10"


48/115


49/115

0:

S,mmar

Structura i/itationH %s a resu tH

1 @/its in2est/ent ini*ed ca ita o/ any /ay e ro ita e on a 8%%Pasis ut run out o cas i ca e* is /ucigger t an de reciation

! @/its in2est/ent in4orking ca ita

o/ any /ay e ro ita e on a 8%%Pasis ut run out o cas i it can#t co ect on

recei2a es or i in2entory doesn#t se3 .ntangi es aree* ensed

Pena iCes or4ard- ooking co/ aniesin2esting or ig er uture sa es earnings

, uity as a cost T e /ore e uity a ir/ e/ oys as " totaca ita t e ess intrinsica y ro ita e it is


50/115

8%

How o We Gi9 These Str,ct,ra" ?imitations/

7o 4e re- ui d inco/e state/ent to 1) e* ense in2est/ent in I!) e* ense in2est/ent in ? 3) de reciate intangi es and )e* enses stock o ders# e uity;?e cou d ut t en 4e create ot er ro e/s> e g 4e ena iCeco/ anies t at are in2esting in I ? % so 4 o is ar iter ocost o e uity; (, 2is sti a i2e so/e t ink )Ao sing e inco/e state/ent is cure-a .nstead et#s add t estrengt s o t4o a ternate P&J#s t at a2e een de2ised in recentyears to our ana ysisH ree cas o4 and ,cono/ic a ue %dded


51/115

8(8(

Metric Wars7 Which A"ternate P ? is 'est/

Gree Cash G"ow Economic a",e Added %dEust/ents 1 ,* enses in2est/ent in i*ed

ca ita ! ,* enses in2est/entin 4orking ca ita

3 .ntangi es de reciated o2eruse u i e Stock o ders# e uity isan e* ense

8oa Se - und; % co/ any does so4 en it roduces /ore cas

ro/ ongoing o erations t an itconsu/es

reate 2a ue; % co/ any does so4 en it roduces a return on ca itat at is greater t an its cost


52/115

8$

Aot t is

Ben8ra a/


53/115

8-

T is Ben8ra a/Q


54/115

8080

'enLamin *raham =(&:05(:

8raduated R! in c ass ro/ o u/ ia in 1'1 at age !0 t en o eredteac ing Eo s in ,ng is /at e/atics and i oso y de art/ents.nstead 4ent to ?a Street Aear y ruined y s ecu ation e ore de2ising


55/115


56/115

8484

In Honor o! *raham

Persona ity Pessi/isticco//ercia

anker

@ ti/istic 2entureca ita ist

.nco/estate/ent

e!ensi#e ( ree cas o4)

Enterprising (,cono/ic a ue

%dded)

To earn/ore

Cash Flow andSecurity Analysis

acke and Ji2nat

The Quest For ValueSte4art


57/115

8


58/115

8&8&

Step (a o! -7 Three Income Statements

Enron Corp year ending 7ec 31 !000 (/i ions e*ce t er-s are)

.nco/e state/ent e!ensi#e *AAP Enterprising

e2enue- @8S S8&% ot er 5 In#estment !i9ed capita" = (>5 In#estment wor1ing capita" = $>5 Intangi "es = ->5 Interest e9pense = 0>- @t er

- Ta*esTota e* ensesPro it ( oss)

$100 9 '' 36

-)888()%

$100 9 '' 36

n+an+a

03

(!15)

3$'' '3&:4

$100 9 '' 36

n+an+a

Source: o/ any re orts ,arningsPo4er co/


59/115

8:8:

Step ( o! -7 B,a"it o! Pro!its


60/115

4%4%

Step (c o! -7 Earnings Power Chart


61/115


62/115

4$4$

Section III

J,st Go,r T pes o!CompaniesD


63/115

4-4-

?ower5?e!t 'o97 Enron


64/115

4040

pper5?e!t 'o97 Hea"thSo,th =H?SH> =down &-; !rom -%pea1 in mid5(::&>


65/115

4848

?ower5Right 'o97 Orisp Oreme on,ts =OO > =down&&; !rom 8% pea1 in mid5$%%->


66/115

4444

Coa" Mine Canar

e!ensi#e7 Enterprising7 'oth7

%utoCone (#'!-#'') Bet e e/ Stee (#'6-#00) % ou ea t & Beauty (#' -#0!)

entennia Tec no ogies (#'3-#'9) Boston Market (#'3-#'9) Bo/ ay o/ any (#'1-#' )

MJ 8rou (#'!-#'9) F, estaurants (#'5-#'9) Enron (#'6-#00)

,7S (#00-#0!) ro4n ork & Sea (#'5-#00) Po aroid (#'5-#00)

Iine ost (#'5-#'6) Hea"thSo,th (#'6-#01) Sun ea/ (#'3-#' )

8a T e (#'6-#0!) .kon @ ice (#'3-#' ) ?arnaco (#' -#'')

8ate4ay (#'9-#01) ite-%id (#'5-#00) Lero* (#'6-#00)

Orisp Oreme on,ts (#0!-#0 ) S er4in-?i ia/s (#'1-#00)

Jucent Tec no ogies (#'9-#00) ?or d o/ (#'9-#01)

Measure/ent S ecia ties (#' -#01)

Tyco (3+00-1!+01)

nited %ir ines (#' -#01)

Source: ,arningsPo4er co/


67/115

4


68/115


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78/115


79/115


80/115

&%&%

*armin7 (%)%%% grows to 00)%%%


81/115


82/115

&$&$

Pa che97 (%)%%% grows to $8


83/115

&-&-

B,a"it S stems7 (%)%%% grows to


84/115

&8&8

Not A"" *reat Stoc1s Are Staircase7 (%O to $%%O


85/115

&4&4

Section

'est Stoc17 (::


86/115

T e 4inner is: ansen Aatura


87/115

&&

(%)%%% grows to $.4 mi""ion


88/115

&:

A,thentic Earnings Power Earnings Power Staircase


89/115

:%:%

Section I

P,tting It A"together7 TheEarnings Power (5$5- Process


90/115

:(:(


1 Poorearnings

ua ity





3 Pre/iu/ tointrinsic 2a ue ?e redict y e*tra o ation so gro4t stocks o tenget us ed eyond rea 4ort

@ur ase Study: %/erican ,ag e (%,@)


91/115


92/115

:-:-

High"ights

Ma - ased retai er 4it '!6 stores in S anadaT ree conce ts: %/erican ,ag e aerie and Martin N @sa

G#d in Pitts urgIounded 1'99

anked R!


93/115

:0:0


1 Poorearnings

ua ity







94/115

:8

Step ( o! -7 Earnings Power Staircase


95/115

:4

Step (c o! -7 Earnings Power Staircase


96/115

: + stac"es Con!ronting *rowth In#estor

1 Poorearnings

ua ity







97/115

:&:&

Step $ o! -7 Competiti#e Ad#antage


98/115

::::

MorningstarFs 0 T pes o! Competiti#e Ad#antage

T pes E9amp"es1 Jo4-cost ro2ider ?a -Mart 7e (;)! ig -s4itc ing costs Payc e* Microso t

3 .ntangi es (e g atents/inds are ocations addicti2e

roduct /anage/ent

e/ oyees)

P iCer Star ucks .nternationaS eed4ay Berks ire at a4ay

% tria (P i i Morris) Best Buy

7isney Aet4ork e ect eBay icago Merc

Most o/ etiti2e %d2 nt ges ? ne o2er Ti/e ? o s


99/115

Most o/ etiti2e %d2antages ?ane o2er Ti/e: ? o .sBui ding t e 13 - orkscre4 ersion;


100/115

(%(%

American Eag"e Has Mi"dD Competiti#e Ad#antage/

o/ etiti2e ad2antage ,*a/ es1 Jo4-cost ro2ider no! ig -s4itc ing costs no

3 .ntangi es (e g atents/inds are ocations addicti2e

roduct management

e/ oyees)

Day Sc ottenstein is ong-ti/eoard c air> and a/i y#s

interests are a igned 4it outside

stock o ders But not t e /ostdura e co/ etiti2e ad2antage

Aet4ork e ect no

. no co/ etiti2e ad2antage kee your orecast eriod s ort


101/115

(%(%


1 Poorearnings

ua ity







102/115

(%

Ta1e Ana" st Gorecasts With a *rain o! Sa"t


103/115

(%

Step - o! -7 American Eag"eFs Intrinsic a",e

Jo4 Mediu/ ig

T is ear ,arnings - " - " 50;

Ae*t ear ,arnings 9" 10" (-;,arnings ears 3 & 5 9" 11" (0.-;

,arnings ears 6-10 3" " 5 6"

,arnings Ter/ina Period 3" 3" 3"

S are ount O annua gro4t -1" -1" -1".ntrinsic 2a ue (inc net cas ) $36 $ 1 $ 9

?eig ting 0" 35" !5"

?td %2g .ntrinsic a ue 0%


104/115

(%

a",ation7 8 Margins o! Sa!et

1 ost o e uity (discount rate) is 10"! ig gro4t K consensus> Jo4 Mediu/ gro4t is

50" 95" o ig3 8ro4t in years 6-10 is 50" o years 1-5

.ntrinsic 2a ue esti/ate 0" ased on Jo4 8ro4t35" on Mediu/ and Eust !5" on consensus

5 Buy 4 en co/ anies se s at 50"-90" o intrinsic2a ue de ending u on ua ity o earnings anddura i ity o co/ etiti2e ad2antage


105/115

(%

American Eag"eFs Price5Intrinsic a",e =PI >

Stock rice

.ntrinsic a ueK P.

$19

$ 03"

%ut entic earnings o4er on sa e: %t $19 you get $1 o

intrinsic 2a ue or $0 3


106/115

(%

American Eag"eFs E9pected Ret,rn

,* ected eturn K ($ 0 - $19)+$19K 13 "

UT e o4er your rice-intrinsic 2a ue (P. ) t e ig er youre* ected return (, )

UPort o io /anage/ent: ank a your co/ anies y , ro/ igto o4 7oes t e co/ any you are t inking o uying o er aig er , t an t e o4est-ranked co/ any you o4n; . not t en

4 y uy it;


107/115

(%

Se"" iscip"ine

U ,arnings ua ity: Gua ity o ro its er/anent ydeteriorate

U Joss o co/ etiti2e ad2antage

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It’s Earnings That Count ( Mc*raw5Hi"") $%%0>

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'iograph

Hewitt Heiserman Jr. conceived the Earnings Power Chart and theEarnings Power Staircase, which are featured in his book "It's Earnings

hat Count" ! c#raw$Hi%%, & (). He a%so writes a co%umn on earnings

*ower for +ea% one .com. Heiserman graduated from -en on Co%%egewith istinction in Histor , and a%so received the /acu%t 0ward for

istinguished 0chievement. Heiserman is a member of the 1ostonSecurit 0na% st Societ and the C/0 Institute. Heiserman's work onearnings 2ua%it has a**eared in heStreet.com, 1usiness3eek, C1S

arket3atch, 1usiness &. , 1etter Investing, he ot%e /oo%, Com*%ete#rowth Investor, 1arron's, and the Haverford rust Com*an 0dviser.Heiserman has s*oken to the 4ew 5ork Societ of Securit 0na% sis, the1oston Securit 0na% sts Societ , /ide%it anagement an +esearch, the1abson Investment anagement 0ssociation, the 0merican 0ssociation ofIndividua% Investors, and Com*%ete #rowth Investors on "1en #rahamand the #rowth Investor." Heiserman is a finance instructor for #erson$6ehrman #rou*. He is a trustee for a %and conservation grou*. o %earn

more, visit www.EarningsPower.com


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444 ,arningsPo4er co/

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Its Earning That Count Summary