Seeking Alpha

F.A.S.T. Graphs

View as an RSS Feed
View F.A.S.T. Graphs' Comments BY TICKER:
Latest  |  Highest rated
  • International Business Machines: A Road Map To Reasonable Valuation [View article]

    Thanks for your comment. The annualized return calculation is provided in the second picture of the article, labeled "15 Year Performance Table." F.A.S.T. Graphs automatically calculates the total return for whatever period in which you are viewing. Subscribers have the option to view charts ranging from 2 to 20 years.

    In this case, the default 15-year chart was used which corresponds to a starting date of 12/31/1998. On this date IBM closed at $184.38 ( But notice that F.A.S.T. Graphs also adjusts for splits and thus the starting value in the upper left-hand corner is $92.19.

    Your inquiry about different time periods can easily be answered by changing the years on the graph in F.A.S.T. Graphs. For instance, here are a range of annualized returns for IBM with corresponding time periods:

    20-year = 14.8%
    15-year = 5.9%
    14-year = 5.0%
    13-year = 7.4%
    12-year = 4.8%
    11-year = 9.7%
    10-year = 8.7%
    5-year = 20.5%

    We hope this helps and appreciate you reading.
    Sep 25 09:24 AM | 3 Likes Like |Link to Comment
  • Southern Company: The Wait For Fair Valuation Is Over [View article]
    Left Banker,

    Thanks for your comment. We agree that SO faces obstacles in the short-term, but eventually believe that the company will come through in the long run. In large part, this is based on the Southern Company's relationship with regulators.

    The high payout ratio - as described above and added on by Chowder - is a bit misguided. The commonly cited number includes special charges, and isn't necessarily representative of the company's earnings power.

    Incidentally, with regard to finding other utilities as bond substitutes, Chuck Carnevale recently wrote a comprehensive article with many more candidates:
    Sep 16 11:01 AM | Likes Like |Link to Comment
  • Southern Company: The Wait For Fair Valuation Is Over [View article]

    Thanks for sharing your strategy. We agree that the short-term provides some challenges, but believe that the long-term earnings prospects will eventually shine through.
    Sep 16 10:45 AM | Likes Like |Link to Comment
  • Southern Company: The Wait For Fair Valuation Is Over [View article]

    We agree that doing one's further due diligence is fundamental to the investment process. In addition, it's obvious that past success is in no way the sole indicator for future business results.

    However, we also believe that a strong track record in the utility industry carries more clout than many other sectors. The Southern Company has shown a propensity to reward shareholders via a consistent dividend, largely derived from their ability to earn "reasonable" returns. In turn, this outcome is based on their interactions and allowances with the regulators. It is our opinion that this relationship will persist and the future long-term earnings power will remain intact. We agree that there will likely be bumps along the way in the short-term, but ultimately keeping the power on seems like a reasonable assumption.
    Sep 16 10:40 AM | Likes Like |Link to Comment
  • Southern Company: The Wait For Fair Valuation Is Over [View article]
    Hi Original George,

    Thanks for your comment. However, the cited payout ratio is a bit misguided. Many websites report this number, which is based on trailing twelve month earnings, but it is not representative of SO's earnings power or ability to pay its dividend. The lower earnings include special charges for the Kemper project. Without these special charges, the Southern Company's payout ratio is in line with what it has historically been. Specifically, S&P Capital IQ indicates a 72% current payout ratio based on normalized earnings.
    Sep 16 10:30 AM | 5 Likes Like |Link to Comment
  • Franklin Resources: Fundamental Stock Research Analysis [View article]

    Thanks, you are correct. The current FAST Graph on BEN reflects the split. I have included updated graphs on our instablog here:

    FAST Graphs
    Aug 9 02:22 PM | 1 Like Like |Link to Comment
  • Lorillard Inc: Fundamental Stock Research Analysis [View article]

    Thanks for the question. The EYE Table (10 Year Earnings Yield Estimates) is calculating the time weighted total return for each year. You will notice that the total return number gets smaller and smaller as the years pass.

    For 2013 you are only including the performance for approximately 5 months. Therefore, your calculations are approximately correct if you measure the price moving from $43.30 to $46.95 and add in the dividend.

    However, the total return calculation in the table is annualizing that return. In other words, the calculations you are suggesting are only for 5 months. If you annualize that, you get the 38.5% number by fiscal year-end 2013. The following calculation for 2014 represents an analyzed return for approximately 17 months, etc.

    To summarize, if you annualize the return from August to December, you would get the number shown in the table. However, if you calculate it as a direct difference without annualizing it, then you number is approximately correct. In other words, that is a time weighted return calculation.

    Hope this answer your question.
    FAST Graphs Team
    Aug 9 11:32 AM | 1 Like Like |Link to Comment
  • Ingredion Inc.: Fundamental Stock Research Analysis [View article]

    The light blue shaded area represents the amount of dividends that are paid out of the green shaded area (earnings). The reason we stack them on top is because we believe they represent return in excess of capital appreciation based on the market applying an appropriate PE ratio to the company’s entire earnings. Second, when presented this way, the user can instantly see information such as whether the company pays a dividend, a visual of its payout ratio, how long it’s been paying dividends, etc.

    If you graph a company with consistent earnings growth you also notice that the pink line within the green shaded earnings area depicts the dividends before they were paid out. If you look at that as a puzzle piece, you would see that the light blue shaded area would fit in the area below the pink line. With the pink line iteration, you are also given a graphical representation of the payout ratio. Everything below the pink line represents the dividends paid out.

    However, another valuable feature of the pink line is that it is simply a plotting of each year’s dividends. A quick look at the pink line shows whether dividends have been cut or not, and how consistently they have been paid. Moreover, if you look at a cyclical company such as CAT where earnings tend to rise and fall, the blue shaded area because they are stacked on top of the earnings, will give you the illusion that the dividend is falling with the earnings. However, the pink line shows you precisely how the dividends have been paid.

    To summarize, the blue shaded area reflects that dividends represent a return in addition to the capital appreciation achieved by the market capitalizing earnings (the orange line). The pink line is simply showing the dividends as a part of the aggregate earnings (the green shaded area).

    Hope this helps.

    FAST Graphs™
    Aug 5 01:26 PM | 2 Likes Like |Link to Comment
  • Ingredion Inc.: Fundamental Stock Research Analysis [View article]
    Left Banker,

    Thanks for the questions.

    In your first paragraph, you are correct because FAST Graphs is a dynamic research tool. When posting a FAST Graph in an article, obviously you can only see the specific graph that was posted. However, a live FAST Graph allows you to run multiple time frames so that you can determine earning acceleration or deceleration, if there have been any valuation adjustments more recently versus a long-term past, etc. Furthermore, FAST Graphs are not designed to dictate valuation, instead they are designed to reveal relevant information that the subscriber can analyze and interpret.

    As to the Estimated Earnings and Return Calculator (the future projection, as you called it) defaults to consensus analysts’ estimates of future growth. These estimates may be more or less than what the historical graphs portray. The point being that you are buying the future, not the past, and you are only using the past as a reference to learn from. More importantly, since this is a calculator, it provides the user the opportunity to input their own estimates if they disagree, or if they simply want to run “what if” best and worst cases, etc. Buy, hold and sell decisions should only be made on a final determination of what the future estimates of the company suggest. This is true whether it’s based on the default’s numbers, the subscriber’s own numbers, etc.

    As to the value of looking at longer term graphs, they provide great insight into how well a company has performed and been managed. This is important information, but it cannot be simply assumed that it will persist in the future.

    Chuck Carnevale will be soon posting an article on financials, and if you get a chance, notice what happened to the BAC and C earnings and how stock price reacted to that. Simply stated, prior to 2006, both of these companies had excellent operating histories, but earnings collapsed just prior to and following the Great Recession.

    FAST Graphs
    Aug 1 02:08 PM | 1 Like Like |Link to Comment
  • Ingredion Inc.: Fundamental Stock Research Analysis [View article]
    Left Banker & swphill,

    This blue line and ratio represent the P/E multiple at which the market has tended to value the company over time. Calculated by a trimmed average of annual P/E values for the period shown on the graph with one high and one low removed. This line may not have much meaning if the P/E has tended to change in one direction over time. Stated more simply, the blue line represents the P/E ratio that the market has normally priced that stock at over whatever time period has been graphed.

    The orange line shows the growth and the multiple used for the orange valuation line. This multiple also represents the P/E ratio of the orange line. When the black price line touches the orange line it is trading at that specific P/E multiple. More simply stated, the orange line presents a graphical picture of how consistent and fast a company has been able to grow their profits. The green shaded area is simply a mountain chart of the company’s profits.

    The light blue shaded area shows dividends that are paid out, while the light pink line shows the dividends prior to being paid out. The green shaded area below the pink line provides a graphical picture of the company’s payout ratio. Of course, the black line on the graph represents monthly closing stock prices.

    FAST Graphs™ are very simple. They depict the business behind the stock (the orange line and green shaded area), and how the price correlates with the company’s business results (the black monthly closing stock price). Perhaps what is causing confusion is that most stock graphing tools only look at price. In contrast, FAST Graphs™ show you the operating record of the business behind the stock first, and then overlays the price to see how it follows and correlates with the company’s operating results.

    For more information on FAST Graphs™, here is a link to the “HELP/FAQ” tab where you will find EPS Descriptions, Earnings Calculations, Screening, videos, etc.

    FAST Graphs™
    Aug 1 11:49 AM | 3 Likes Like |Link to Comment
  • Lockheed Martin: Fundamental Stock Research Analysis [View article]

    We are simply presenting FAST Graphs in this form as a precursor to a more comprehensive research effort. In other words, we are not recommending the stock, we are just presenting the fundamentals for further due diligence.

    FAST Graphs
    Jul 3 10:26 AM | Likes Like |Link to Comment
  • Lockheed Martin: Fundamental Stock Research Analysis [View article]

    The FAST Graphs just plots fundamentals of a company. In the case of LMT, you can see that the price is significantly below the orange line and its traditional valuations which reflect today's negative sediment. However, we cannot graph a comment, only the effect that the comment has, which is currently reflected in the LMT graph.

    It’s important to understand that FAST Graphs™ is a dynamic tool. In other words, when you draw different time frames, FAST Graphs™ automatically calculates the different growth rates that apply to those different time frames. Just like our tool, a company’s growth rates are dynamic and change over time. This is why we designed FAST Graphs™ to be able to run Earnings and Price Correlated graphs over time frames as short as the last recent 2 years all the way up to 20 years of history. With this in mind, one of the best ways to use FAST Graphs™ to analyze a company is to start out running charts of 15 years (or even 20 years), followed by running shorter graphs.

    FAST Graphs
    Jul 2 02:42 PM | Likes Like |Link to Comment
  • Lockheed Martin: Fundamental Stock Research Analysis [View article]

    Thanks for the question.

    If you look closely at the FAST Graph you will see that earnings growth has slowed considerably over the last four years or so and so have estimates for future growth. This is more than likely the reason why the price is currently so low. In other words, today's discounted valuations are already reflected in the current price and valuation of the stock in our opinion.

    To summarize, we suspect that once the market place adapts to the new normal for defense companies, PEs will be more reflective of other low-growth industries such as utilities. When this happens, we can see a PE expansion from the current 10 range into a normal market multiple of 15 to 16, therefore, there is some upside based on a potential PE expansion.

    FAST Graphs
    Jul 2 12:53 PM | Likes Like |Link to Comment
  • Canadian National Railway: Fundamental Stock Research Analysis [View article]

    Thanks for reading and commenting.

    Yes, FAST Graphs is available by subscription. You can find all the information on our website We have two kinds of subscriptions; Basic and Premium. There is a 14-day free trial; check it out.

    FAST Graphs Team
    Jun 26 12:59 PM | 1 Like Like |Link to Comment
  • CSX Corp. - Fundamental Stock Research Analysis [View article]

    Thanks for the help and kind words about FAST Graphs. What your last paragraph points out is the benefit of the dynamic nature of FAST Graphs over relying on a mere static statistic. Since a company's growth rates change (either increase or decrease), we believe it's very valuable to be able to run as many time periods as necessary to get a good feel for valuation.

    In our opinion, the long history serves a better purpose of providing a long-term perspective of how well the business has performed. In contrast, shorter time frames, as you suggest, are better for assessing valuation. However, we caution that a current 6-year view includes the great recession which should be taken into consideration when evaluating any business.

    Thanks again for sharing your experience with FAST Graphs,

    FAST Graphs Team
    Apr 23 12:42 PM | 1 Like Like |Link to Comment