REFS is
a mine of invaluable information for the private investor.
Selecting shares without its help is like trying to
clap with one hand tied behind your back.
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Forecasts
overtaken by preliminary results
When a preliminary
result is announced, any existing consensus forecast for the
next period is immediately rendered out of date, and must be
treated with caution. While revised forecasts are awaited from
brokers, based on newly-available information, the individual
components of the consensus forecast for the following period
may still be valid, as long as the superseded forecast proved
to be accurate. In this event, the growth rate is the percentage
difference between the newly announced preliminary EPS, adjusted
to a normalised basis, and the remaining, yet to be revised,
consensus forecast for the following period.
However,
when a preliminary announcement appears to render the existing
consensus forecast invalid, it is not used at all. This rule
is applied when the actual result for the current year differs
from previous expectations by more than 5%.
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