October 1, 20134Comments

30+ Accounting Adjustments to Get the Truth About Earnings & Valuation

Reported earnings don’t tell the whole story of a company’s profits. They are frequently manipulated by companies to manage earnings.

by David Trainer, Founder & CEO

September 30, 20130Comments

Danger Zone 9/30/13: Zynga (ZNGA)

The stock has been beat up since its much-hyped IPO in 2011, but even after losing 61% of its value the stock is still too expensive. ZNGA is competing in an immature market where the barriers to entry are almost nonexistent and brand loyalty is a foreign concept.

by David Trainer, Founder & CEO

September 24, 20131Comments

Unconsolidated Subsidiary Assets – Valuation Adjustment

Investors who ignore unconsolidated subsidiary assets are not getting a true picture of the cash available to be returned to shareholders. By adding unconsolidated subsidiary assets one can better understand the value of the stock to shareholders. Diligence pays.

by David Trainer, Founder & CEO

September 24, 20130Comments

CNBC Interview: Confirming AAPL Thesis – Apple Is Still Rotten

Here's my latest CNBC interview on my Apple (AAPL) thesis, originally articulated in Danger Zone 5/13/2013: Apple Inc. (AAPL).

by David Trainer, Founder & CEO

September 23, 20130Comments

Danger Zone 9/23/13: InnerWorkings (INWK)

InnerWorkings (INWK), a new addition to the Most Dangerous Stocks for September, is in the Danger Zone this week. INWK is a classic “roll-up” story that enriches corporate and Wall Street insiders while destroying shareholder value.

by David Trainer, Founder & CEO

September 23, 20130Comments

Index Investing Myth Buster: Tom Brakke

Tom Brakke recently featured our Dangers Zone article on FVL. His article highlights the lack of performance of FVL versus other true index funds and supports my thesis.

by David Trainer, Founder & CEO

September 19, 20130Comments

Non-Operating Unconsolidated Subsidiaries—Invested Capital Adjustment

This report is one of a series on the adjustments we make to convert GAAP data to economic earnings. This report focuses on an adjustment we make to convert the reported balance sheet assets into invested capital.

by David Trainer, Founder & CEO

September 19, 20132Comments

GM’s Long Range EV A Further Threat to Tesla

On Monday, GM announced their plan to develop an all-electric vehicle that could go 200 miles per charge, just like Tesla’s Model S. The catch? GM plans to sell their car for only $30,000, less than half of the $62,000 sticker price for the Model S.

by David Trainer, Founder & CEO

September 19, 20133Comments

Apple Stays Rotten

The “value” in Apple is an illusion. Astute investors need to look at Apple through the lens of what is a reasonable ROIC in the future.

by David Trainer, Founder & CEO

September 19, 20130Comments

Wall Street Journal Features My Advice on Dividend Stocks

Popular dividend stocks could be ticking time bombs.

by David Trainer, Founder & CEO

September 19, 20130Comments

GAAP Opinion versus Economic Fact

GAAP financial statements generally fail to meet equity investors' analytical needs. We try to calculate something that does.

by David Trainer, Founder & CEO

September 19, 20130Comments

The Disconnect between Investment Theory and Practice

A disconnect between investment theory and investment practice exists and is manifested in the way investors should value stocks versus the way they actually do value stocks.

by David Trainer, Founder & CEO

September 19, 20130Comments

Distinctions Between “Growth” and “Value” Investment Styles Are Irrelevant

Growth without profit (i.e. value) offers no investment merit. Conversely, value without growth offers little upside incentive for investing in any business.

by David Trainer, Founder & CEO

September 19, 20130Comments

Price-to-Earnings and Other Multiples Are Not Determinants Of Price

P/Es and other multiples are the results of of value creation/destruction not a determinant.

by David Trainer, Founder & CEO

September 16, 20130Comments

Danger Zone 9/16/13: E*Trade Babies

Online trading firms aim to exploit the gullibility of many retail investors by encouraging the myth that they can outperform professional money managers armed with vastly greater resources, experience and expertise. The E*Trade babies are the most glaring symbol of this myth. The symbol also reinforces the notion that investing is an easy task that takes no special effort or aptitude to succeed.

by David Trainer, Founder & CEO

September 11, 20130Comments

September’s Most DANGEROUS Stocks Available to the Public Today

New Constructs released September’s Most Dangerous Stocks report to the public today.

by David Trainer, Founder & CEO

September 11, 20130Comments

September’s Most Attractive Stocks Available to the Public Today

New Constructs released September’s Most Attractive Stocks report to the public today.

by David Trainer, Founder & CEO

September 11, 20130Comments

New Stocks For Most Attractive/Dangerous Lists

September sees 16 new stocks make our Most Attractive list and 14 new stocks fall into the Most Dangerous category. Our Most Attractive stocks have high and rising return on invested capital (ROIC) and low price to economic book value ratios. Most Dangerous stocks have misleading earnings and long growth appreciation periods implied in their market valuations.

by David Trainer, Founder & CEO

September 10, 20130Comments

Discussing FASB’s Lease Proposal

On August 27th, I met with my fellow members of the FASB’s Investor Advisory Committee (IAC) to discuss the proposed treatment of operating leases on the balance sheet by the Financial Accounting Standards Board (FASB).

by David Trainer, Founder & CEO

September 9, 20133Comments

Danger Zone 9/9/13: Angie’s List (ANGI)

The customer review website is playing investors, and even its own customers, for fools. I am not sure that consumers will use ANGI’s ratings at all in the not-too-distant future.

by David Trainer, Founder & CEO

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