Other Calculators
Some things worth knowing ...
US/DS (Up-side / Down-side ratio) is only meaningful if:
- Current Price is above Low Price (there is some room for price to go down)
- and Current Price is below High Price (there is some room for price to go up).
Beware of US/DS larger than about 10 or 12.
- That generally means Current Price isn't much larger than Low Price.
- Ask yourself if there's really only a relatively small potential for the Current Price to do down.
Risk Ratio is another way of thinking about US/DS. Risk Ratio is described in Ellis Traub's book Take Stock.
- 75% Risk Ratio is equivalent to US/DS of 0.3.
- 50% Risk Ratio is equivalent to US/DS of 1.
- 25% Risk Ratio is equivalent to US/DS of 3.
- 10% Risk Ratio is equivalent to US/DS of 9.
- 5% Risk Ratio is equivalent to US/DS of 19.
Is Total Return significantly (several percentage points) larger than Potential EPS Growth?
- Most of the difference (all of it if there is no dividend) comes from PE expansion (Avg. High PE is larger than Current PE).
- That means you believe it's plausible that investors may become more optimistic about this stock in the future than they are now (pushing up the PE level they're willing to pay to own the stock).
- The potential boost to Total Return that can come from PE Expansion is a one-time thing. In order to realize the benefit of that one-time boost, you must be willing to actually sell the stock if that PE Expansion actually occurs. If you continue holding the stock after that PE Expansion has occured, you should expect your Total Return to be lower (because the PE is likely to go back down). If you plan to continue holding the stock even if that PE expansion really occurs, PAR might be a more reasonable estimate of the actual return you can expect when you eventually sell the stock.
Some things worth noticing ...
A higher Current Price always:
- makes Total Return and US/DS less favorable (smaller);
- a higher Current Price appreciating to High Price would be a smaller gain;
- a higher Current Price falling to Low Price would be a greater loss.
A lower Current Price always:
- makes Total Return and US/DS more favorable (larger);
- a lower Current Price appreciating to High Price would be a greater gain;
- a lower Current Price falling to Low Price would be a smaller loss.
Changing only High Price (i.e., Avg. High PE or Potential EPS Growth or Latest Annual EPS)
- changes Total Return and US/DS.
- A higher High Price makes Total Return and US/DS more favorable (larger).
- A lower High Price makes Total Return and US/DS less favorable (smaller).
Changing only Low Price (i.e., Avg. Low PE or Est. Low EPS)
- never changes Total Return (potential appreciation from Current Price to High Price is unchanged).
- A higher Low Price makes US/DS more favorable (larger); Current Price falling to a higher Low Price would be a smaller loss.
- A lower Low Price makes US/DS less favorable (smaller); Current Price falling to lower Low Price would be a greater loss.
Some comments about the calculator ...
Values you can't change:
- are calculated from other values you can change;
- can be overriden by alternate values (only for High EPS and Low Price).
Alternate values (for High EPS and Low Price) are:
- used in place of the corresponding calculated value;
- ignored unless they're > 0.