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Motley Fool File
Library
File: Peg.ex_ For those who have neither a scientific calculator nor the desire to use one, this program is a windows-based tool for calculating PEGs. FREE from The Motley Fool. Good luck with it, Fools! PEGulator Instructions: If you are not familiar with Step 10 of the 13 Steps to Investing foolishly (in the Fool's School area) you might want to review it so that you have firmly in mind what the PEGulator is doing. Once you "get it," running the PEGulator is simplicity itself. The secret is in finding the numbers to feed it. A good source is AOL's Stock Research area which you can get to from the Quotes and Portfolios screen. The Stock Reports and Earnings Estimates are the most useful area. Another good source is our website where we provide a company "Snapshot" with all the relevant information. This feature is located in the upper left of most pages on the website. First, you need the current P/E, which you can usually get from Quotes and Portfolios or, if you want to do it yourself, simply divide the total of the past four quarter's earnings into the current price. That's your first line. Then you need the Trailing Earnings, which are the earnings you used to calculate the PE. That's your second line. Earnings Estimate--now it gets tricky especially if you are dealing with a less well-known stock. Fools much prefer two years to (even better) 5 years for their future estimate--but sometimes you have to go with what's available. Use the farthest out, full year estimate. That's the third line. (Company Research>>Earnings and Estimates or our Snapshot.) Quarters to Estimate: Note the month when the last earnings were reported. How many quarters are there between then and the end of the year you used for the future estimate? That's your last line--Quarters to Estimate. Example: If the last earnings were reported in June of '97 and the earnings estimate is for the fiscal year ending in December '98, then you would have 6 quarters, four from '98 and the two left in '97. Watch out for fiscal years that end in other quarters--if Fiscal Year '98 ends in September, you would only have 5 quarters. Try it yourself. The farther out the earnings estimates you can get, the more reliable the result is. (when asked by your browser, choose "SAVE FILE"or "SAVE TO DISK." You may have to rename the file PEG.EXE if your system does not do it automatically.)
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