EPS is a Misleading Indicator
Goldman Sachs (GS) has generated negative OPS (red bars) or cashless earnings over the last five consecutive years and its shares declined from $250 to $136 per share, a decrease of 46%.
The founder of StockDiagnostics.com who is a writer for Equities Magazine used this chart to recommend the sale of Goldman Sachs shares in his September 2007 article. As of September 2008, GS shares declined by 29%.
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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