EPS is a Misleading Indicator
Morgan Stanley (MS) has generated negative OPS (red bars) or cashless earnings over the last three consecutive years and its shares have declined from $74 to $27 a share representing a 64% decrease.
The founder of StockDiagnostics.com who is a writer for Equities Magazine used this chart to recommend the sale of Morgan Stanley shares in his September 2007 article. As of September 2008, MS shares declined by 50%.
The validity of EPS (earnings per share), long considered by Wall Street to be the leading predictor of value, is being challenged by OPS (Operational-cashflow Per Share). StockDiagnostics.com monitors cash flow for over 10,000 companies and is the exclusive publisher of OPS data.
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