earnings adjustments a warning sign? An equity research note from Barclays published this morning points out that the current spread between adjusted and GAAP earnings for small caps is wide by historical norms. Now, the widening gap between GAAP figures and adjusted numbers has been causing concern for some time as the difference between these two accounting metrics is generally considered a rough proxy for earnings quality. A widening spread indicates that investors have to view public company accounts with increasing scrutiny. Reporting Season: Q1 Marks Darkest Hour Just Before The Dawn, Says DB However, alongside the accounting issue a more…
Do Earnings Adjustments Signal Bear Markets?
Rupert Hargreaves
Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk
