9. Industry Price-Earnings - The NASDAQ Dozen

To find the industry earnings for the industry a stock belongs to, click on the Analyst Research link under Stock Analysis in the left menu (see Figure 14) and then scroll down to the bottom of the page.

Analyst Research Link
Figure 14—Analyst Research Link


Why We Look at Industry Earnings

Most investors are interested not only in how much the company is earning but also how the company's earnings compare to the average earnings of companies in the industry. Typically, if a company is earning more than the average for the industry, it is a good sign for the company's stock.

How to Score Industry Earnings
  • Pass—Give Industry Earnings a passing score if the company's earnings are higher than the industry's earnings.
  • Fail—Give Industry Earnings a failing score if the company's earnings are lower than the industry's earnings.

Looking at the Industry Earnings for WMT in Figure 15, WMT should receive a failing score. You can see that WMT's earnings are lower than the industry's.

Industry Earnings: FAIL

Industry Earnings
Figure 15—Industry Earnings


  All content in this article is supplied by Wade Hansen of Learning Markets. To learn more about their investor education offerings, please visit learningmarkets.com. Find more great articles from Learning Markets in our news sections.

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