Whisper numbers are the "unofficial and unpublished earnings per share (EPS) forecasts that circulate among professionals on Wall Street... generally reserved for the favored (wealthy) clients of a brokerage." According to Per Afrell, a former analyst at UBS Warburg, buy and sell side research analysts generally maintain a 20 plus page spreadsheet to calculate their earnings per share estimates. When the estimate is first calculated by sell-side analysts, the number is submitted to companies such as First Call to be averaged with other analysts' estimates for the consensus earnings estimate. As new information is made available and plugged into the spreadsheet, the calculation may change several times leading up to a company's actual earnings release. However, the analyst is generally not going to issue a new report and revise his or her published estimate with each new calculation, resulting in the analyst's true expectations differing from his or her published number. Therefore, when someone within the firm, an institutional client, or even a retail client asks the analyst his or her expectation for the company, the response is often different from the published estimate. This number then gets passed among trading desks and professional traders as the whisper number.
Because the whisper number is the analysts' true expectation, it tends to be more accurate than the officially published consensus estimates. The Wall Street Journal found one website that gathers whisper numbers from research analysts and a Bloomberg News study found these same numbers to miss actual reported earnings by 21% while the officially published consensus earnings estimates missed actual results by an average of 44% . Furthermore, a joint study by the universities of Michigan, Indiana, and Purdue also found that whisper numbers were more effective at predicting actual earnings results than the consensus earnings estimates.
Consequently, stocks have been shown to react to whisper numbers more so than the consensus earnings estimates. A 2002 research report found that stocks of companies that beat the whisper number had an average one day gain of more than 2% while the stocks of companies that beat the consensus earnings estimate but missed the whisper number gained approximately one-tenth of one percent on the first day of trading. Furthermore, the joint academic study found that a trading strategy based on whisper numbers either before the company's earnings release or after the actual report "significantly" outperformed the S&P 500.
In one example, Deckers Outdoor (DECK) reported earnings of $2.69 per share after the market closed on Thursday, February 28, 2008 and provided 2008 earnings guidance above the consensus estimates. The reported results were $0.35 per share above the consensus earnings estimate of $2.34 per share. A number of analysts had indicated in the days and weeks leading up to its earnings release that they expected the company to beat estimates and the Earnings Whisper (R) number was $2.70 per share. The stock gained more than $10 during the two weeks heading into the company's earnings release at least in part due to the expectations of the upside surprise, but on Friday, February 29, 2008, shares of Deckers Outdoor traded down approximately $10 after missing the whisper number by a penny.
Fundamental analysis, in accounting and finance, is the analysis of a business's financial statements ; health; and competitors and markets. It also considers the overall state of the economy and factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management. There are two basic approaches that can be used: bottom up analysis and top down analysis. These terms are used to distinguish such analysis from other types of investment analysis, such as quantitative and technical.
A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a proportion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business. The current year profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets.
The price-earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's share (stock) price to the company's earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or undervalued.
Day trading is a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day, so that all positions are closed before the market closes for the trading day to avoid unmanageable risks and negative price gaps between one day's close and the next day's price at the open. Traders who trade in this capacity are generally classified as speculators. Day trading contrasts with the long-term trades underlying buy-and-hold and value investing strategies. It is made easier using day trading software.
In accounting, book value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. Traditionally, a company's book value is its total assets minus intangible assets and liabilities. However, in practice, depending on the source of the calculation, book value may variably include goodwill, intangible assets, or both. The value inherent in its workforce, part of the intellectual capital of a company, is always ignored. When intangible assets and goodwill are explicitly excluded, the metric is often specified to be "tangible book value".
The dividend yield or dividend–price ratio of a share is the dividend per share, divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage.
In financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus to profit from price movement – stocks that are judged undervalued are bought, while stocks that are judged overvalued are sold, in the expectation that undervalued stocks will overall rise in value, while overvalued stocks will generally decrease in value.
Enterprise value (EV), total enterprise value (TEV), or firm value (FV) is an economic measure reflecting the market value of a business. It is a sum of claims by all claimants: creditors and shareholders. Enterprise value is one of the fundamental metrics used in business valuation, financial analysis, accounting, portfolio analysis, and risk analysis.
Contrarian Investing is an investment strategy that is characterized by purchasing and selling in contrast to the prevailing sentiment of the time.
The 'PEG ratio' is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth.
Earnings per share (EPS) is the monetary value of earnings per outstanding share of common stock for a company.
In financial reporting, earnings guidance or simply guidance is a publicly traded corporation's official prediction of its own near-future profit or loss, stated as an amount of money per share; see Earnings call. Earnings guidance is usually a financial forecast presented as a quarterly report of the corporation's performance in the next quarter. Guidance is an aid to financial analysts and the stock market in valuing the corporation, and helps prevent overvaluation.
The Institutional Brokers' Estimate System (I/B/E/S) is a service founded by the New York brokerage firm Lynch, Jones & Ryan and Technimetrics, Inc. I/B/E/S began collecting earnings estimates for U.S. companies around 1976 and used the raw data to calculate statistical time series for each company. The data subsequently was used as the basis for articles in academic finance journals attempting to demonstrate that changes in consensus earnings estimates could identify opportunities to capture excess returns in subsequent periods. After starting with annual earnings estimates and estimates of "Long Term Growth, the database later was expanded to include quarterly earnings estimates. This allowed for the analysis of "Quarterly Earnings Surprises." Other innovations made possible by the I/B/E/S data included estimates for various equity indexes on a "top down" basis and estimates made on a "bottom up" basis for those same indexes. In the mid-1980s I/B/E/S began to expand its dataset to include companies trading in international markets. Lynch, Jones was sold to Citigroup in 1986. Barra bought I/B/E/S in 1993, selling it to Primark two years later. Thomson Financial purchased Primark in 2000. Successor companyThomson Reuters spun off its financial division under the name Refinitiv in 2018.
An earnings call is a teleconference, or webcast, in which a public company discusses the financial results of a reporting period. The name comes from earnings per share (EPS), the bottom line number in the income statement divided by the number of shares outstanding. The US-based National Investor Relations Institute (NIRI) says that 92% of companies represented by their members conduct earnings calls and that virtually all of these are webcast. Transcripts of calls may be made available either by the company or a third party.
Sell side is a term used in the financial services industry. The three main markets for this selling are the stock, bond, and foreign exchange market. It is a general term that indicates a firm that sells investment services to asset management firms, typically referred to as the buy side, or corporate entities. The sell side and the buy side work hand in hand and each side could not exist without the other. These services encompass a broad range of activities, including broking/dealing, investment banking, advisory functions, and investment research.
Financial statement analysis is the process of reviewing and analyzing a company's financial statements to make better economic decisions to earn income in future. These statements include the income statement, balance sheet, statement of cash flows, notes to accounts and a statement of changes in equity. Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, financial health, and future prospects of an organization.
The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's current market value to its book value. The calculation can be performed in two ways, but the result should be the same. In the first way, the company's market capitalization can be divided by the company's total book value from its balance sheet. The second way, using per-share values, is to divide the company's current share price by the book value per share. It is also known as the market-to-book ratio and the price-to-equity ratio, and its inverse is called the book-to-market ratio.
Phillip Securities Indonesia is a financial services company based in Jakarta, Indonesia. It is listed as a member of Indonesia Stock Exchange.
An earnings surprise, or unexpected earnings, in accounting, is the difference between the reported earnings and the expected earnings of an entity. Measures of a firm's expected earnings, in turn, include analysts' forecasts of the firm's profit and mathematical models of expected earnings based on the earnings of previous accounting periods.
In corporate finance, the present value of growth opportunities (PVGO) is a valuation measure applied to growth stocks. It represents the component of the company’s stock value that corresponds to (expected) growth in earnings. It thus allows an analyst to assess the extent to which the share price represents the current business, and to what extent it reflects assumptions about the future. As a proportion of market cap, PVGO can then also be used in relative valuation, i.e. when comparing between two investments.