Geoff Wilson: Our #1 indicator for future valuations

In a discussion with the ASX Geoff Wilson, Chairman & Founder of Wilson Asset Management, shares the four things he looks at when rating a company. Wilson says that in his view the earnings per share (EPS) growth of a company provides the best correlation for where the share price will go and is therefore one of figures he follows most closely. “We look at the next two years earnings per share growth - because I think the greatest correlation between a share price and anything is earnings per share growth. Some people say it is cashflow, return on equity, NTA, yield… But, over time, all the studies I’ve seen show that over the past 35 years the greatest correlation is between earnings per share growth and the share price.” In this video Wilson outlines his process for identifying investment opportunities outside of the top 20 stocks on the ASX.

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