Lynch - Part 3 (2024)

Part 3: Growth at a Reasonable Price

Inthe last segment our screen looked for stocks trading withprice-earnings ratios below their historical averages as well as below the norm for theirindustry. This segment examines how Peter Lynch balances value and growth.

How does the price-earnings ratio compare to its earnings growth rate?

Companies with better prospects should sell with higher price-earnings ratios. A usefulvaluation technique is to compare the price-earnings ratio to the earnings growth rate. Aprice-earnings ratio of half the level of historical earnings growth is consideredattractive, while ratios above two are considered unattractive.

Lynch refines this measure by adding the dividend yield to the earnings growth. Thisadjustment acknowledges the contribution that dividends make to an investor's return. Theratio is calculated by dividing the price-earnings ratio by the sum of the earnings growthrate and the dividend yield. With this modified technique, ratios above one are consideredpoor, while ratios below 0.5 are considered attractive. Our screen uses this ratio ofprice-earnings to the earnings growth rate plus the dividend yield. A ratio less than orequal to 0.50 is specified as a cut-off.

How stable and consistent are the earnings?

It is important to examine the historical record of earnings. Stock prices cannotdeviate very long from the level of earnings, so the pattern of earnings growth will helpto reveal the stability and strength of the company. Ideally, earnings should move upconsistently. We did not use any earnings stability screens, however the table of passingcompanies includes seven years of earnings per share data.

Avoid hot companies in hot industries.

Lynch prefers to invest in companies with earnings expanding at moderately fast rates(20% to 25%) in non-growth industries. Extremely high levels of earnings growth rates arenot sustainable, but continued high growth may be factored into the price. A high level ofgrowth for a company and industry will attract a great deal of attention from bothinvestors, who bid up the stock price, and competitors, who provide a more difficultbusiness environment. Our final filter specifies a maximum earnings per share growth rateof 50%.

Lynch - Part 3 (2024)

FAQs

How rich is David Lynch? ›

David Lynch is a visionary filmmaker, artist, and musician. He has carved a unique niche in cinema and art, captivating audiences with his distinctive narrative style and surrealistic visuals. With a net worth of $70 million in 2024, as reported by Wealthy Gorilla, Lynch's financial achievements underscore his success.

Why did David Lynch leave season 2? ›

Frequent interferences from ABC led to creators David Lynch and Mark Frost leaving Twin Peaks for the majority of Season 2, leading to an inconsistent set of episodes.

How much of Twin Peaks did David Lynch write? ›

David Lynch and Mark Frost wrote all the episodes, and Lynch directed.

What happened to Annie Blackburn? ›

She was committed to a psychiatric hospital in western Washington for six months after this incident. After being released, Annie returned to school and completed her final year, graduating with honors. During this time, she had a boyfriend, but the relationship ended poorly.

How much is Steven Spielberg's net worth? ›

Why was next season 2 cancelled? ›

The battle for humanity's survival is ending earlier than hoped The Fox network has cancelled the neXt TV series so there won't be a second season, a victim of low ratings and Covid-19.

What was the letter under Laura Palmer's fingernail? ›

He wrapped her body in plastic and sent her floating in a river, with the letter "T" cut out from an issue of Flesh World and shoved under her left ring fingernail. By 1989, BOB was prepared to leave Leland and inhabit Laura, while Laura was learning more about him and Leland was beginning to question his sanity.

Why did Twin Peaks end so abruptly? ›

Studio interference led to the premature cancelation of Twin Peaks, a beloved and influential TV show. The battle between David Lynch and Bob Iger over revealing Laura Palmer's killer ruined the show's direction and caused ratings to plummet.

What movie inspired David Lynch? ›

David Lynch draws from noir film Experiment in Terror for thematic and stylistic inspiration. The film's villains, settings, and themes heavily influenced Lynch's work, particularly Twin Peaks. Experiment in Terror acts as a crucial bridge between classic and modern noirs, shaping the evolution of the genre.

Where is Twin Peaks set in real life? ›

The lodging town full of weird people and happenings is the fictional setting for the iconic 1990s TV show and its 2017 Showtime revival. While Twin Peaks, Washington, doesn't actually exist, the show was largely filmed in the one-time timber town of North Bend (northbendwa.gov), a mere 30 miles east of Seattle.

Is Ben Horne Donna's father? ›

Upon discovering flowers sent to her mother, Donna finds her birth certificate and discovers that it does not list a father; she then realizes that Ben Horne is her biological father.

What happened to Audrey in Twin Peaks: The Return? ›

Frost confirmed that Audrey survived the bank explosion, her body having been shielded by Pete (Jack Nance). However, she was still taken to the hospital in critical condition and while there slipped into a coma for three and a half weeks.

Who is Dale's girlfriend in Twin Peaks? ›

In the final episode of Twin Peaks, Cooper enters the Black Lodge to rescue his new girlfriend, Annie Blackburn (Heather Graham), from Earle. In the Black Lodge, he encounters his evil doppelgänger, who is in league with BOB.

How long was Dale Cooper in Twin Peaks? ›

Dale Cooper is the main protagonist of the David Lynch's Twin Peaks franchise, appearing in the original show from 1990-1991 and then in the 2017 limited series revival Twin Peaks: The Return, as well as the 1992 movie Twin Peaks: Fire Walk with Me (although in a supporting role).

What is Quentin Tarantino's net worth? ›

Quentin Tarantino has revealed he has not shared his wealth with his mother after she mocked his dreams to become a writer as a child. The director, whose net worth is estimated at $120m (£86.9m), said that his mother Connie Zastoupil would complain when he chose to write screenplays instead of doing his schoolwork.

How rich is Naomi Watts? ›

Quick Facts
Real NameNaomi Ellen Watts
Net Worth$35 million
Source of WealthActing, Film Production, Real Estate Investments
GenresDrama, Thriller, Horror, Biographical
Height5 ft 4½ in (1.64 m)
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May 11, 2024

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