CEO David Trainer sat down with Chuck Jaffe of Money Life and MarketWatch.com to talk about our Danger Zone pick this past week: Textron, Inc. (TXT)
From non-GAAP accounting to costly acquisitions, it is not difficult for a company to create the illusion of profits. However, eventually reality sets in and the deterioration of a business comes to light. This week’s Danger Zone pick, Textron Inc. (TXT: $42/share), is destroying shareholder value while covering it up with an acquisition that creates the illusion of profits via GAAP net income growth.
Structured deals help fuel the bubble in private tech companies. Startups get cash so they can keep marketing like crazy, VCs get guaranteed payouts, and everyone gets the prestige and attention of being a “unicorn”. So who suffers? IPO investors that are tricked into believing these massive valuations have any basis in reality.
The search for quality stocks only gets harder as companies use a growing array of tricks to deceive investors. Our research has always focused on cutting through the noise. We focus on gathering quantifiable facts to identity good risk/reward opportunities for clients. This week’s Long Idea, Allegiant Travel Company (ALGT: $185/share) has shown consistent profit…
It’s no secret that non-GAAP earnings allow management to directly manipulate their performance metrics. Investors must look past non-GAAP metrics to protect their portfolios. While non-GAAP tricks may provide some short-term boosts to stock prices, eventually reality sets in and the true economics of the business rule the day.
Last week, the Financial Accounting Standards Board (FASB) voted to update standards on operating lease accounting that would force companies to record as much as $2 trillion worth of lease obligations on their balance sheets.
To learn the dangers of non-GAAP earnings and how to overcome them, join CEO David Trainer, a Wall Street veteran, in this week’s free webinar “The Dangers of Non-GAAP Earnings.” David will discuss what goes into non-GAAP earnings, why they create a problem in investing and analysis, and where you should focus when analyzing companies who report non-GAAP results.
CEO David Trainer sat down with Chuck Jaffe of Money Life and MarketWatch.com to talk about our Danger Zone pick this past week: Celadon Group (CGI).
Our Most Attractive Stocks (5.9%) slightly outperformed the S&P 500 (5.9%) last month. Our Most Dangerous Stocks (3.6%) rose less than the S&P 500 (5.9%) and outperformed as a short portfolio last month.
While most earnings manipulation is not as blatant as the recent Valeant revelations, the fact remains that investors have to be on the lookout for earnings management at all times. To be properly vigilant, it’s important to understand why executives misstate earnings. When you understand the why, you’ll have a better sense of what you need to look for.
Because P/E ratios are dependent upon earnings, which we know can be manipulated, they can be quite misleading. This week’s Danger Zone is a perfect of example of just how misleading those P/E ratios can be. With a P/E ratio less than half that of its industry average, this week’s Danger Zone stock, Celadon Group Inc. (CGI) would appear cheap because of strong EPS when, in fact, its cash flows are in decline and the stock is highly overvalued.
This week’s Long Idea not only pays a quality dividend, but when combined with aggressive share repurchases, provides investors a yield over 9%. Best of all, it is anything but a trap. With consistent profit growth, strong free cash flow, and the opportunity for share price appreciation, Brocade Communications Systems (BRCD) is this week’s Long Idea.
CEO David Trainer sat down with Chuck Jaffe of Money Life and MarketWatch.com to talk about our Danger Zone pick this past week: ServiceNow (NOW).
Gold Members and higher can access November’s 40 Most Attractive Stocks as of Wednesday, November 4.
Gold Members and higher can access November’s 40 Most Dangerous Stocks as of Wednesday, November 4.
Just when we think the market is becoming more rational and beginning to focus on fundamentals again we find a stock that proves that idea wrong. Once again, we’ve identified a business that fails to generate profits, uses “adjusted” metrics as “better representations of business”, and who’s stock price is up over 200% since late 2012. ServiceNow (NOW) is in the Danger Zone this week.
The large number of mutual funds has little to do with serving investors’ best interests. Here are three red flags investors can use to avoid the worst mutual funds.
Why are there so many ETFs? ETF providers tend to make lots of money on each ETF so they create more products to sell. The large number of ETFs has little to do with serving your best interests. Here are three red flags you can use to avoid the worst ETFs.
The large number of mutual funds has little to do with serving your best interests. Here are three red flags you can use to avoid the worst mutual funds
Why are there so many ETFs? ETF providers tend to make lots of money on each ETF so they create more products to sell. The large number of ETFs has little to do with serving your best interests. Below are three red flags you can use to avoid the worst ETFs:
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