The Expected Return (Historical Growth) estimates the return that an investor might expect on an investment at a given point in time. This version uses the Historical Growth rate in the calculation.
According to Mary Buffett's "Buffetology", this can be calculated as follows.
Calculate the EPS in year 10 by compounding the current EPS by the historical growth rate over the last 10 years.
This forecast value can then be multiplied by the 10 year average PE ratio to provide an estimate of the price in year 10 dividends are paid, an estimate of the amount of dividends paid over the 10-year period should also be added to the year 10 prices.
This value can then be compared with the current price to determine if the expected rate of return is greater than Buffett's threshold return of 15%.
| Ticker | Name | Exp. Return | StockRank™ |
|---|---|---|---|
| LON:LINV | Lendinvest | 693.70% | 48 |
| LON:BREE | Breedon | 273.50% | 94 |
| LON:PEBB | Pebble | 188.50% | 71 |
| LON:SCP | Schroder UK Mid Cap Fund | 179.43% | 0 |
| LON:JAM | JPMorgan American Investment Trust | 178.09% | 0 |