ICYMI: Chicken Producer Long Idea, Solar Stock Faceoff, An Overvalued Retailer, & Closing Successful Danger Zone Picks

Here’s what happened at New Constructs this past week.

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Fatten Your Nest Egg with Sanderson Farms

The stock’s of chicken producers have been on a tear this year. We selected Sanderson Farms (SAFM) and Pilgrim’s Pride (PPC) as Long Ideas in mid-2015, but we are honing in our focus on SAFM as the best way to play growing chicken demand.

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Podcast: Why Etsy Is In The Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Etsy Inc. (ESTY).

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Exec Comp Aligned With ROIC Model Portfolio: August 2017

Platinum Members and higher can access August’s Executive Compensation Aligned With ROIC Model Portfolio as of Wednesday, August 16.

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Too Much Market Value for Too Small a Market

This niche business generates plenty of “adjusted EBITDA,” but no real profits. It also has too much market value for too small a market, especially in light of its deteriorating competitive position. Absent a textbook case of “stupid money risk,” (i.e. a grossly overpriced acquisition) the risk/reward does not look good for equity investors.

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Closing Danger Zone Pick: VirnetX Holding Corp (VHC)

While business prospects still hinge upon patent infringement rulings, the significantly lower valuation no longer presents the unbalanced risk/reward it once did.

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Closing Danger Zone Pick: Verifone Systems (PAY)

While fundamental issues remain, such as a bottom-quintile ROIC and a challenging competitive landscape, we are inclined to take profits.

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Closing Danger Zone Pick: Shutterstock (SSTK)

The significant reduction in stock price and embedded market expectations diminishes the downside risk and we are closing the position.

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Closing Danger Zone Pick: Celadon Group (CGI)

The significant reduction in stock price and embedded market expectations diminishes the downside risk and we are closing the position.

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ICYMI: New Long Idea, Disney Bombs Netflix, A Solution for the Duty of Care, CNBC Interview & New Stocks on Model Portfolios

Here’s what happened at New Constructs this past week.

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Disney Dumps Netflix, And So Should Investors

Investors should capitalize on the opportunity provided by Disney’s streaming service announcement and the market’s overreaction to earnings. Buy into a great company at an attractive valuation (Disney) and sell an overvalued company with holes in its business model (Netflix).

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An Industry Leader In A Rapidly Growing Market

We previously highlighted the semiconductor equipment sector as a “pick and shovel” play to benefit from trends such as artificial intelligence, autonomous driving, and the Internet of Things. Today we are digging deeper into one of those stocks.

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Podcast: Why Acadia Healthcare Is In The Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Acadia Healthcare (ACHC).

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Podcast: Why Investors Ignoring This Industrials Stock Are In The Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life to talk about an Industrials stock that investors should not overlook.

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See Us On CNBC Discussing Snap @ 4:10ET Today

Tune into CNBC on Thursday, August 10 at 4:10 pm EST. New Constructs CEO, David Trainer, will discuss Snap’s business and its current valuation.

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A Practical Solution To Fulfill The Duty Of Care

Without the Duty of Care, the Duty of Loyalty is nearly worthless. An advisor that tries to act in your best interest, but doesn’t have the skill or diligence to do so can cause just as much harm as a conflicted advisor.

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New Stocks on Most Attractive/Most Dangerous: August 2017

Our Most Attractive Stocks (+0.0%) underperformed the S&P 500 (+2.1%) last month and our Most Dangerous Stocks (-0.7%) outperformed the S&P 500 (+2.1%) as a short portfolio last month. See two of the additions to this month’s model portfolio.

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New Stocks on Dividend Growth Model Portfolio: July 2017

The best performing stocks in the portfolio last month were large cap stock Scripps Networks Interactive (SNI), which was up 26%, and small cap stock, Waddell & Reed (WDR), which was up 7%. Get a look at one of the new stocks on July’s Model Portfolio.

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Why Diligence Matters: Don’t Buy Acadia Healthcare’s Roll-Up

We put behavioral healthcare provider Acadia Healthcare (ACHC) in the Danger Zone just over a year ago and despite the company touting its impressive non-GAAP numbers, the stock is just as dangerous as ever.

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ICYMI: Financial Times Feature, CNBC Feature, Model Portfolio Updates For Stocks, ETFS and Mutual Funds

Here’s what happened at New Constructs this past week.

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