Estimated annual return on a stock

[chloe625]

Hi! I'm writing a school assignment where I have to pick two stocks and estimate the annual rate of return that they will provide. The first one I picked is KCI.

I used analysts' projections from BusinessWeek to estimate this figure, but I'm not sure if I did it right (sorry I'm not allowed to post the link, but you can find it by going to the website and clicking on companies, searching for KCI under stock quotes, then click the earnings tab.)

Can you tell me if this sounds right?

Analyst projections for the remaining two quarters of 2008 show an estimated increase of $1.84 per share, and the total annual earnings for 2009 are estimated at $4.08 (6). The total earnings for the investment over the period June 2008 – June 2009 can therefore be estimated at $3.88 per share (1.84+4.08/2). On June 24, 2008, the price per share for KCI stock closed at $38.52. This yields a rate of return of 10.07%. With an investment of $10,000 on June 24th, the total estimated income on this investment over a one year period is $1,007.27.

Does that make sense? Or is there a better way to estimate the annual rate of return for a stock? Thank you!

[jIM_Ohio]

estimating annual return means little.

I have worked for companies which increased their earnings every quarter and the stock went down or stayed flat.

SDRC- look it up (it has since been bought out).