EV/EBITA data from yahoo

**springsnailt** Sat Mar 18, 2006 12:51 am

EV/EBITA data from yahoo
Blast,

It seems that you use the EV/EBITA data from Yahoo Finance in the insider purchase report. Is it such reliable? Do you use such data directly when picking stocks?

**blast_investor** Sat Mar 18, 2006 1:03 am

Hi springsnailt,

yes, you are right, the insider newsletter use EV/EBITDA from Yahoo.

I believe EV/EBITDA is better than PE. Yahoo PE is not adjusted for any one time issue. Yahoo EV/EBITDA dose seem to be adjusted, therefore more reliable number.

I believe in the end, EV/EBITDA needs to be normalized for one time gain/charge issue as well. Further more, EBITDA number does not work across different industries. It is only useful for the same industry comparison.

Joel Greenblatt recommend EBITDA - Capex as normalized EBIT. This EBIT is better number to use than EBIT. But it is tough to calculate normalized EBIT without software.