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  • Ingredion Inc.: Fundamental Stock Research Analysis [View article]
    swphill,

    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, 2013. 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, 2013. 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.
    http://bit.ly/RdxFzq

    FAST Graphs™
    Aug 1, 2013. 11:49 AM | 3 Likes Like |Link to Comment
  • Lockheed Martin: Fundamental Stock Research Analysis [View article]
    Robert,

    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, 2013. 10:26 AM | Likes Like |Link to Comment
  • Lockheed Martin: Fundamental Stock Research Analysis [View article]
    Kathy,

    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, 2013. 02:42 PM | Likes Like |Link to Comment
  • Lockheed Martin: Fundamental Stock Research Analysis [View article]
    Beacon,

    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, 2013. 12:53 PM | Likes Like |Link to Comment
  • Canadian National Railway: Fundamental Stock Research Analysis [View article]
    gstanleyjr,

    Thanks for reading and commenting.

    Yes, FAST Graphs is available by subscription. You can find all the information on our website http://bit.ly/t3XFTe. We have two kinds of subscriptions; Basic and Premium. There is a 14-day free trial; check it out.

    FAST Graphs Team
    Jun 26, 2013. 12:59 PM | 1 Like Like |Link to Comment
  • CSX Corp. - Fundamental Stock Research Analysis [View article]
    tallguyz,

    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, 2013. 12:42 PM | 1 Like Like |Link to Comment
  • Foot Locker Is On Sale And It's A Good Time To Buy [View article]
    Ed,

    Thanks for the mention of FAST Graphs and including the graph on FL in your article. Good article, by the way.

    FAST Graphs Team
    Mar 11, 2013. 09:57 AM | Likes Like |Link to Comment
  • McKesson Corp: Fundamental Stock Research Analysis [View article]
    snoopy44,

    Yes, the FAST Graph is indicating that MCK is fairly valued (fully valued) based on the fact that the price is touching the orange line. The forecast earnings growth is 15% per annum based on 18 analysts reporting to Capital IQ.

    Since a 10-year Treasury yield is currently 1.84% (1.9% on the FAST Graph in this article), I guess you could say that MKC is forecast to grow at 8 times the yield of a 10-year Treaasury (15% growth / 1.84% Yield = 8.15).

    However, we are not sure that's really a sound way to look at it. Nevertheless, the FAST Graphs suggest that MCK is a sound investment today with above-average growth future potential. However, FAST Graphs should always represent the first step prior to a comprehensive due diligence effort.

    FAST Graphs
    Mar 1, 2013. 09:57 AM | 2 Likes Like |Link to Comment
  • Sleep Well At Night With This Dividend Aristocrat You Can Buy Right Now [View article]
    Contheon,

    Allow us to respond on Brad's behalf. FAST Graphs utilizes a formula that Standard & Poor's recommends to calculate FFO on all companies. This formula is a very close cousin to operating cash flows. Individual companies will often report different numbers based on their specific inclusions or exclusions of certain accounting metrics.

    The reason that FAST Graphs uses this one formula is to provide a universal look for all companies. However, our calculated FFO may not be precisely what a given company might produce. However, our calculation does come directly from the company's statement of cash flows. Here is a link to the formula that FAST Graphs universally applies to all companies (REITs, MLPs, BDCs and even C Corps):
    http://bit.ly/VgZHeW

    We realize this can cause confusion, however, we are also confident that our iteration of FFO provides a realistic and accurate depiction of a given company's cash flows available for distribution.

    FAST Graphs
    Feb 25, 2013. 09:57 AM | 6 Likes Like |Link to Comment
  • Target Corp.: Fundamental Stock Research Analysis [View article]
    DanielleEmberley,

    Thanks for your questions.

    FAST Graphs™ is a web-based software that you use over the internet with a web browser. You don’t have to install any CDs, download any software, or worry about upgrades.

    Once you sign up you will have a username and password that gives you access to FAST Graphs™ from any electronic device that has an Internet connection.

    This is a link to our website: http://bit.ly/t3XFTe

    FAST Graphs
    Feb 22, 2013. 11:05 AM | 1 Like Like |Link to Comment
  • Eaton: Fundamental Stock Research Analysis [View article]
    dgs1298,

    Thanks so much.

    FAST Graphs
    Feb 22, 2013. 11:02 AM | Likes Like |Link to Comment
  • Lockheed Martin Corp.: Fundamental Stock Research Analysis [View article]
    sneaker1404,

    Thanks for the comment. Regarding changing the PE ratios, here is our reason for not specifically providing that ability. The reason we only use three formulas to determine what P/E ratio to apply to the orange line is because we have discovered that over certain ranges of growth the proper P/E ratio will be the same. The difference will be the rate of return that is driven by the growth rate. REmember a 15 P/E, which is quite common, is driven by the earnings yield it represents (6%-7%).

    Furthermore, the scale to the right on the estimated earnings and return calculator does draw the orange and blue lines at different P/E ratios that can be pointed to with your mouse. However, the core fair value P/E (the dark orange line) is always calculated based on the respective earnings growth.

    We hope this helps clarify things.

    FAST Graphs
    Feb 21, 2013. 10:26 AM | 1 Like Like |Link to Comment
  • Target Corp.: Fundamental Stock Research Analysis [View article]
    lwinkle,

    Thanks. Wal-Mart looks very good as well on a valuation basis, in our opinion there is a lot of noise being made about one-month's worth of sales reports. We don't put too much faith in that kind of a data point.

    Regards,
    FAST Graphs
    Feb 21, 2013. 10:20 AM | Likes Like |Link to Comment
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