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Thank You! Responses like this is one reason I was so excited to get on these boards! Thank you!
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Low EPS is a different problem than negative EPS. Many of their "recommended" stocks are young companies that aren't yet profitable.

If buying those kinds of stocks seems like reckless 'speculation' to you --rather than responsible 'investing'-- then you should look elsewhere for your stock tips.

Just saying.
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Hi, LuvJesus.

What is your question?

Fuskie
Who cannot talk about specific recommendations or premium services in this Public Community discussion board, but will try to address questions about specific companies...

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I asked about that specific Stock. It got deleted and I got a warning from fool.com because I disclosed the specific stock That the premium services recommended.

This happened on this board.
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I have no problem with Fool’s philosophy. I’ve been using the investment guide by Motley fool as my guide on stock market investments. One of the recommendations in that book is if there is a non-progressive EPS, don’t buy other six thousand other companies.

The recommended stock as a negative EPS. It’s gone from -$3.16 to -$4.62 to -2.62 over three years annually. That is why I asked the question. Is the growth potential worth overlooking the negative EPS? Hopefully this clarifies my questioning that.
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You can ask about individual companies here, just don't identify them as premium service recommendations. It's only because this is a Public Community discussion board and you paid good money for those recommendations. :-)

As to your question, it's not an easy or simple answer, because it really depends on the company and you. Ideally, you want to see a steady progression of EPS in a positive direction. The goal should be for a company to become more profitable over time. A company whose EPS bounces around year over year without demonstrating a profit-leaning earnings trend could be a red flag.

But you also have to take earnings and EPS in context. What is the reason for the negative EPS values. Is the company consistently investing heavily in R&D? Amazon was famous for not being profitable for some 2 decades as it would repeatedly invest its revenues back into growing the company. And that didn't turn out too bad for those Fools who bought back in the 90's when David Gardner first took notice of the company.

There may have been one-time impairment charges that affected EPS, or a pandemic or natural disaster. Maybe there were competitive pressures that are eating into market share, or hindering the company's ability to grow market share. Perhaps service or product development is experiencing delays, or sales and marketing are not carrying their weight. The bottom line is that it is not so much about the EPS numbers themselves but their context and the story they tell.

If you have high conviction in a company's long term (3-5 years or longer) business growth potential, then you might reasonably give them more space to deliver the goods, so to speak. If after a reasonable amount of time and despite best efforts the company has failed to demonstrate it is able to deliver, then your conviction might waiver a bit.

Fuskie
Who notes you may also want to understand whether the company's revenue is generated seasonally, where quarter to quarter comparisons are less informative but year-over-year comparisons more so, and compare earnings based on that perspective rather than a flat fiscal per anum basis...

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Disclaimer: This post is non-professional and should not be construed as direct, individual or accurate advice
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"I have no problem with Fool’s philosophy."

Actually, you do have a problem with their "philosophy", otherwise you wouldn't be complaining.

If you grind through the financial statements of their "recommended" stocks, you will discover --on average-- the companies are financially 'healthy', just not 'profitable'. If you then read the analysts' reports, you'll discover --on average-- the company is projected to grow its revenues at above average rates. So the "investing" question --which really is just unfounded speculation-- is whether the company's earnings will ever catch up to its current stock price.

On average, if you wait around for 3 to 5 years, that will happen, not because of the company's activities, but because the overall market has risen. Meanwhile, of course, you're under water on the position.
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Sorry, I didn’t realize trying to learn was complaining. I’m just trying to learn here. Don’t have to be so demeaning
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Thank You! Responses like this is one reason I was so excited to get on these boards! Thank you!
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