Is it true high EPS means low outstanding shares

No, high EPS does not necessarily mean low outstanding shares. The relationship between EPS and outstanding shares is more complex.

1. Understanding EPS: Earnings Per Share (EPS) is a measure of a company's profitability, calculated by dividing its net income by the total number of outstanding shares. A higher EPS indicates greater profitability and value to investors.
2. Outstanding Shares: Outstanding shares are the total number of a company's stock shares held by all its shareholders, excluding treasury stock held by the company itself. These shares can change over time due to factors such as issuing new shares, buybacks, or changes in ownership structure.
3. The Relationship: While it is true that as the number of outstanding shares increases, EPS generally decreases assuming net income remains constant, this does not imply a direct correlation. A company can have high EPS and high outstanding shares, or high EPS and low outstanding shares. The specific combination depends on the company's financial decisions and market conditions.
4. Example: Consider two companies with the same EPS but different outstanding shares. Company A has 1 million shares outstanding with an EPS of $2, while Company B has 2 million shares outstanding with an EPS of $1. Both companies have the same EPS, but Company A has fewer outstanding shares.
5. Investor Considerations: When evaluating a company, investors often look at EPS in conjunction with other metrics, such as the company's share price, to determine its relative value. A high EPS can be attractive, but it must be considered in the context of the company's market capitalization, industry norms, and growth prospects.

In conclusion, high EPS does not automatically mean low outstanding shares. The relationship between EPS and outstanding shares depends on various financial decisions and market conditions, and both metrics should be considered together for a comprehensive analysis.