Rules of the Game: Sizing Up the Bottom Line

If you are holding individual stocks -- and that's certainly not required of every investor, since ETFs offer a perfectly acceptable way of spreading risk -- it's wise to incorporate earnings estimates into your analysis.

For an example, one large-cap that's expected to grow earnings at a double-digit rate this year is Valeant Pharmaceuticals (VRX), which makes treatments for nervous-system and cardiovascular disorders. Earnings are due Feb. 28 before the open -- and, for the full year, Valeant is expected to deliver income of $4.50 per share, up 54% over 2011. Analysts have pegged 2013 earnings at $5.62 per share, which would mark another 25% gain from last year's expectations....416 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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