Finding PE ratios for Canadian companies

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Hogwild
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Finding PE ratios for Canadian companies

Post by Hogwild »

I apologize if this is in the wrong forum. I'm looking at Globeinvestor's portfolio numbers, and at least one number is different from that on tmxmoney.com .

NFI (New Flyer Industries) is currently listed on Globeinvestor as having a P/E of 18.1 . Tmxmoney.com shows a value of 17. Should I assume Tmxmoney is more accurate? Where do people go for accurate Canadian exchange quotes without having to log on to their broker's site?

Thanks
Last edited by Hogwild on 15 Jan 2018 12:14, edited 1 time in total.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by AltaRed »

I don't think you can count on any data source as being precisely correct. One may have counted the last 4 quarters of earnings as the denominator, while another may take the last available quarter and multiply it by 4 for the denominator. Some may use adjusted earnings, while others may not.

Your best bet is to look up the company's quarterly reports yourself and use the earnings methodology that you wish to use.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by Taggart »

I used to compare the price ratios for individual equities at Reuters versus Morningstar. Unfortunately, from what I can see, Reuters took that free valuable information away, so now I'm basically left with just Morningstar's data.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by AltaRed »

Taggart wrote: 15 Jan 2018 11:19 I used to compare the price ratios for individual equities at Reuters versus Morningstar. Unfortunately, from what I can see, Reuters took that free valuable information away, so now I'm basically left with just Morningstar's data.
And Morningstar currently has a forward P/E of 16.4 for NFI. FWIW, I would trust Morningstar data the most if one doesn't want the effort of searching individual company websites.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by Hogwild »

Thanks for that. So I take it this is a fairly common problem? What about if I log onto brokerage websites, such as TD, BMOIL, CIBC Investor's Edge? Are those usually accurate? Seems like a glaring problem in an industry that should have precise data.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by AltaRed »

BMOIL uses Thomson Reuters and Globeinvestor Gold as their 3rd party sources. It's close enough I suspect for my use. All sources provide highly precise, but maybe not 100% accurate depending on assumptions used.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by Hogwild »

AltaRed:

I don't know if I'd call a P/E of 16.4 vs. 18.1 a minor difference. Thanks, I'll keep this in mind.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by NormR »

Be aware that there are many ways of defining the earnings part of the P/E ratio. For instance, earnings over the last 12 months, estimated earnings for the next 12 months, earnings from continuing operations (over the last 12 months or next 12 months), etc.
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Re: Finding PE ratios for Canadian companies

Post by Taggart »

I vaguely remember there was an obscure book I skimmed through quite a number of years ago, showing the proper way of calculating a price earnings ratio. All quite different from any thing I'd ever seen before, but the weird thing about the book was that it was actually endorsed on the outside cover by of all people, Jack Bogle. I can't remember the author or the title of the book though, and no promises, but the next time I'm in the library where I saw it, I'll do a scan through the shelves to try and retrieve.
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by kcowan »

Hogwild wrote: 15 Jan 2018 12:47I don't know if I'd call a P/E of 16.4 vs. 18.1 a minor difference. Thanks, I'll keep this in mind.
What are you using the PE for? I usually use it to compare different stocks so a consistent methodology is more important than the method used.
For the fun of it...Keith
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Re: Stock/Bond/Index/Fundamental/Asset Class/Quotes - Sources

Post by AltaRed »

kcowan wrote: 16 Jan 2018 09:29
Hogwild wrote: 15 Jan 2018 12:47I don't know if I'd call a P/E of 16.4 vs. 18.1 a minor difference. Thanks, I'll keep this in mind.
What are you using the PE for? I usually use it to compare different stocks so a consistent methodology is more important than the method used.
For the most part, that is what I do too. I consider the actual data point as an 'estimate', given the various ways it can be calculated. The OP's use of 16.4 vs 18.1 above is 'an exaggeration' anyway, since the 16.4 I posted is a 'forward earnings' estimate, not a 'trailing earnings' estimate, or the 'last Q times 4' estimate.
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Re: Finding PE ratios for Canadian companies

Post by Hogwild »

AltaRed:

How do you know for a fact that the tmxmoney.com is a forward P/E? Does it say so on the website somewhere?
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Re: Finding PE ratios for Canadian companies

Post by AltaRed »

It was Morningstar that said the forward P/E was 16.4.
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Re: Finding PE ratios for Canadian companies

Post by Taggart »

Taggart wrote: 15 Jan 2018 19:34 I vaguely remember there was an obscure book I skimmed through quite a number of years ago, showing the proper way of calculating a price earnings ratio. All quite different from any thing I'd ever seen before, but the weird thing about the book was that it was actually endorsed on the outside cover by of all people, Jack Bogle. I can't remember the author or the title of the book though, and no promises, but the next time I'm in the library where I saw it, I'll do a scan through the shelves to try and retrieve.
I looked this morning in the library but unfortunately couldn't find the book.
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Re: Finding PE ratios for Canadian companies

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Taggart wrote: 15 Jan 2018 19:34 I vaguely remember there was an obscure book I skimmed through quite a number of years ago, showing the proper way of calculating a price earnings ratio. All quite different from any thing I'd ever seen before, but the weird thing about the book was that it was actually endorsed on the outside cover by of all people, Jack Bogle. I can't remember the author or the title of the book though, and no promises, but the next time I'm in the library where I saw it, I'll do a scan through the shelves to try and retrieve.
The Little Book of Common Sense Investing has Bogle's name on the cover :wink:
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Re: Finding PE ratios for Canadian companies

Post by Taggart »

DavidR wrote: 19 Jan 2018 16:18
Taggart wrote: 15 Jan 2018 19:34 I vaguely remember there was an obscure book I skimmed through quite a number of years ago, showing the proper way of calculating a price earnings ratio. All quite different from any thing I'd ever seen before, but the weird thing about the book was that it was actually endorsed on the outside cover by of all people, Jack Bogle. I can't remember the author or the title of the book though, and no promises, but the next time I'm in the library where I saw it, I'll do a scan through the shelves to try and retrieve.
The Little Book of Common Sense Investing has Bogle's name on the cover :wink:
I've already read that one at least a couple of times, including the latest edition which I own. Nice try DavidR, but not quite what I'm looking for. :beer:
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Re: Finding PE ratios for Canadian companies

Post by Hogwild »

Here's another good example this morning. I'm looking at CN Rail (CNR). Tmxmoney.com displays P/E as 13.4 .

Globeinvestor.com shows P/E for same stock as 19.22 .

Can anyone confirm for certain that Tmxmoney does, as AltaRed claimed earlier, use forward and not TTM P/E?
I've emailed them to ask, but haven't yet received a reply.
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Re: Finding PE ratios for Canadian companies

Post by DavidR »

Hogwild wrote: 25 Jan 2018 15:08 Here's another good example this morning. I'm looking at CN Rail (CNR). Tmxmoney.com displays P/E as 13.4 .

Globeinvestor.com shows P/E for same stock as 19.22 .
As NormR mentioned upthread, there are many ways of defining/calculating.

From CN's earnings release of Jan 23, they reported Net (diluted) earnings per share of $7.24 but "adjusted diluted" eps of $4.99

Looks like tmx is using the GAAP earnings of $7.24 and Globe investor the adjusted earnings.
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Re: Finding PE ratios for Canadian companies

Post by Hogwild »

DavidR:

Thanks. I thought there was one commonly-used method of calculation. Looks like I couldn't have been more wrong. I wish the website would at least publish what method it uses. There's nothing like clarity.

Then again, brokers and other sites can't even be bothered to publish price/FFO for REITs. It seems a futile battle.
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Re: Finding PE ratios for Canadian companies

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Hogwild wrote: 25 Jan 2018 15:08 Can anyone confirm for certain that Tmxmoney does, as AltaRed claimed earlier, use forward and not TTM P/E?
I've emailed them to ask, but haven't yet received a reply.
I don't think I have ever said anything about what TMX Money says. I know Morningstar tells us what P/E they use. They are upfront with Forward P/E in their headline data and also provide TTM further down in Key Stats.
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Re: Finding PE ratios for Canadian companies

Post by ig17 »

DavidR wrote: 25 Jan 2018 15:28 As NormR mentioned upthread, there are many ways of defining/calculating.

From CN's earnings release of Jan 23, they reported Net (diluted) earnings per share of $7.24 but "adjusted diluted" eps of $4.99

Looks like tmx is using the GAAP earnings of $7.24 and Globe investor the adjusted earnings.
Today is Jan 25. You think the sites got updated in two days? I would be surprised if they turn around so quickly.
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Re: Finding PE ratios for Canadian companies

Post by ig17 »

Hogwild wrote: 25 Jan 2018 16:46 DavidR:

Thanks. I thought there was one commonly-used method of calculation. Looks like I couldn't have been more wrong. I wish the website would at least publish what method it uses. There's nothing like clarity.

Then again, brokers and other sites can't even be bothered to publish price/FFO for REITs. It seems a futile battle.
Serious investors do their own calculations based on the raw numbers in the audited financial statements. Even then, it's an art not a science.
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Re: Finding PE ratios for Canadian companies

Post by northbynorthwest »

GlobeInvestor provides both ‘P/E ratio’ and ‘Forward P/E ratio’ (18.91and 16.04 in the case of CNR) if you use the custom ‘build your own’ view in the free watchlist. There are lots of metrics there beyond the default stock view.

My method is to export my watch list from GlobeInvestor as a data file, which has all the available metrics not just ones selected in custom watch list. I then manually import the csv file into a data page on my own Google Sheet, which does custom display/calcs based on my holdings and watched stocks. I don’t purport to be a ‘serious’ investor or doing a deep dive this way, but I find it helps, mainly to scan relative attributes of peer companies in the same sector.

Edit: you can also see the two P/Es under the ‘ratios’ view, along with price to book, PEG, beta and debt to equity.
Last edited by northbynorthwest on 26 Jan 2018 08:26, edited 1 time in total.
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Re: Finding PE ratios for Canadian companies

Post by DavidR »

ig17 wrote: 25 Jan 2018 21:12 Today is Jan 25. You think the sites got updated in two days? I would be surprised if they turn around so quickly.
Didn't check Globeinvestor, but for tmx - go to the "Financials" tab and the GAAP figures for latest FS are there...
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Re: Finding PE ratios for Canadian companies

Post by Peculiar_Investor »

ig17 wrote: 25 Jan 2018 21:15 Serious investors do their own calculations based on the raw numbers in the audited financial statements. Even then, it's an art not a science.
Absolutely agree. I've always taken the view 'trust, but verify' and therefore do review and calculate my own numbers and judgements using quarterly earnings press releases.

I also remind myself that the E (earnings) isn't a precise number, there are GAAP earnings, adjusted earnings, etc., and none are perfect measures of a company. Particularly as measured at one single point in time. I long ago learned about 'financial engineering' and 'slightly beating expectations'. What's more important is the trend of the number over a period of time, the longer the trend that you can examine and review the better. I generally look at P/E ratio in the context of a 10 year period and then example the high P/E and low P/E throughout that range and where the current P/E sits as a relative measure.

Ultimately it comes down how are you using the P/E ratios. Is it for screening purposes to choose between a number of choices? If so, they I would suggest picking one data source, spend some time to learn their methodology to the point you accept their 'number' and then don't stray by comparing data from other sources.
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