It's Earnings That Count

An innovative way to see through a company's published numbers to discover its true investment potentialThis book gives you a blueprint for finding a great growth stock for the next decade without taking on a lot of risk in the process. Inspired by the writings of Benjamin Graham, It's Earnings That Count examines a firm s earnings quality from the perspective of a defensive investor who wants to avoid committing ruinous mistakes as well as the enterprising investor who seeks Wall Street s next great opportunities. Unfortunately, as recent market history has shown, the traditional income statement is ill-suited to meeting the needs of these sometimes opposing viewpoints. As a result, investors can buy shares of a seemingly profitable company that, in fact, has poor earnings quality.However, the author s trademarked Earnings Power Chart combines Graham s two personalities to reveal, in picture form, whether a company possesses authentic earnings power for long-term growth. Using the world-famous William Wrigley Jr. Company gum-maker as a case study, you will learn how to build these two alternate profit-and-loss statements to protect yourself. Since this book is written in plain English, you do not need to be an MBA or accountant to follow these step-by-step instructions.Giving investors the tools they need to turn the tables in their favor, It's Earnings That Count covers: The four limitations of the income statement found in every annual report, 10-K, and 10-QA quick-hitting, five minute test to sift out the obvious losers so you can save time and focus on analyzing potential winnersHow to spot when a company is forging an Earnings Power Staircase that s your hallmark of a low-risk growth stock like Microsoft and PaychexWhy the charts of Lucent Technologies, WorldCom, Enron, and Tyco signaled trouble ahead of traditional income statement.The 2 earnings power ratios you need before making your next investment12 ways to check whether management s interests are aligned with yoursA list of 15 items to check for to make sure the companies in your stock portfolio have a competitive advantage. (Hint: Great growth stocks always have competitive advantages.)16 kinds of companies to avoid20 indicators that it may be time to sell