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Danger Zone: Value Investors

Value investing is a tried and tested approach that has worked wonders for investors in the past. However, in today's world, executing this strategy can be a daunting task, given the complexity of the annual reports that companies file. Even professional investors have a tough time understanding the profitability and valuation of companies due to the lengthy and convoluted filings they receive. With stocks becoming more volatile and earnings estimates less precise, investors could be misled into thinking they're making a wise investment when, in fact, there's another side to the coin they've not seen.
by David Trainer, Founder & CEO
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Danger Zone: Dunkin Brands Group (DNKN)

DNKN’s illusory growth in accounting earnings has driven the stock up nearly 40% while the S&P 500 is up only about 20% over the past year. Our diligence reveals that while reported earnings are up, DNKN’s economic earnings are in decline. Future growth expectations are overblown as well because the company’s plans to expand outside of the Northeast pit it against formidable, entrenched competitors.
by David Trainer, Founder & CEO
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Danger Zone: Tuesday Morning (TUES)

Any brick and mortar retailer carries some risk in this environment, but investors who really want exposure to this sector should look for higher quality companies than TUES. Other retailers have superior profitability metrics, better branding and e-commerce capabilities, and a cheaper valuation. The only reason to touch TUES is to short it.
by David Trainer, Founder & CEO
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Danger Zone: Comcast (CMCSA)

The Time Warner deal is a smokescreen for the fact that Comcast faces many problems to which it does not have an answer. The market already understands that CMCSA has overpaid, which is why the stock is down 5% since the acquisition was announced. And the price will drop further as the market catches on to the larger competitive issues that Comcast faces.
by David Trainer, Founder & CEO