Good times can hide a multitude of sins.
Double-digit earnings growth over the past 14 quarters has prompted some investors to ignore the main lesson of the go-go years, which is that the nitty-gritty details of corporate finance are still the main story.
Richard Bernstein, Merrill Lynch's U.S. strategist, has said investors remain "too sanguine on issues of corporate governance and financial reporting."
David Bianco, head U.S. equity strategist at UBS, estimates that what he calls "accounting quality adjustments" will take $10 a share off the 2006 earnings per share of the Standard & Poor's 500 — the same amount they've cost the stocks in that index for the past four years, he calculates. That leaves earnings per share of $81 across the index, he estimates.
See full Article.
Posts
