July’s Most DANGEROUS Stocks Available to the Public
New Constructs released July’s Most Dangerous Stocks report to the public today.
David Trainer, Founder & CEO
David Trainer, Founder & CEO
July’s Most Attractive Stocks Available to the Public Today
The Most Attractive Stocks portfolio (+1.9%) outperformed the S&P 500 (+0.4%) last month.
David Trainer, Founder & CEO
Sector Rankings For ETFs & Mutual Funds: July 2013
At the outset of the 3Q2013, only the Consumer Staples sector earns an Attractive rating. My sector ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each sector.
David Trainer, Founder & CEO
Discontinued Operations Removed from Invested Capital – Invested Capital Adjustment
Most investors would never know that discontinued operations distort GAAP numbers by over-stating assets on balance sheets and distorting the picture of a company’s ability to generate a return on that capital.
David Trainer, Founder & CEO
Off-Balance Sheet Debt – Invested Capital Adjustment
Investors who ignore off-balance sheet debt are not holding companies accountable for all of the capital invested in their business. By adding back off-balance sheet debt to invested capital, one can get a true picture of the value that management is creating for shareholders. Diligence pays.
David Trainer, Founder & CEO
July’s Most DANGEROUS Stocks Available to Subscribers Today
Paying customers can access July's 40 Most Dangerous Stocks as of midnight last night.
David Trainer, Founder & CEO
July’s Most Attractive Stocks Available to Subscribers Today
Paying customers can access July’s 40 Most Attractive Stocks as of midnight last night.
David Trainer, Founder & CEO
Off-Balance Sheet Reserves – Invested Capital Adjustment
Reported assets don’t tell the whole story of the capital invested in a business. Accounting rules provide numerous loopholes that companies can exploit to hide issues and obscure the true amount of capital invested in a business over its life.
David Trainer, Founder & CEO
Danger Zone 7/1/13: Callaway Golf (ELY)
ELY is priced for significant profit growth despite declining revenues, increased pressure from competitors, and limited growth potential in the golf equipment industry.
David Trainer, Founder & CEO
Footnotes Adjustments for Earnings & Valuation Diligence
This article details the uniquely rigorous diligence behind each of our ratings on 3000 stocks, 7000 mutual funds and 400 ETFs. It contains reports on all the adjustments we make to convert GAAP data to economic earnings and derive true shareholder value in a discounted cash flow model.
David Trainer, Founder & CEO
Employee Stock Option Costs and Goodwill Amortization – NOPAT Adjustment
NOPAT Adjustments for ESOs and Goodwill Amortization. Converting GAAP data into economic earnings should be part of every investor’s diligence process. Performing detailed analysis of footnotes and the MD&A is part of fulfilling fiduciary responsibilities.
David Trainer, Founder & CEO
McDonald’s Is Still on the Value Menu
The stock market is giving MCD no credit for the company’s proven track record of value creation and strong growth potential. Instead, the market predicts MCD’s profits will permanently drop. I think it is pretty clear the market’s expectations are too low for MCD. Investors should take advantage.
David Trainer, Founder & CEO
Non-Operating Tax Adjustment – NOPAT Adjustment
Without removing the tax impact of non-operating items, one still gets distorted picture of a company’s operating profitability.
David Trainer, Founder & CEO
Growth Appreciation Period (GAP)
The Growth Appreciation Period is the number of years that a business is expected to earn an ROIC greater than WACC on new investments.
David Trainer, Founder & CEO
Free Cash Flow (FCF) and Free Cash Flow Yield
Free cash flow ("FCF") equals NOPAT minus change in Invested Capital.
David Trainer, Founder & CEO
Implied Interest For Operating Leases – NOPAT Adjustment
NOPAT Adjustment for Implied Interest For Operating Leases. Converting GAAP data into economic earnings should be part of every investor’s diligence process. Performing detailed analysis of footnotes and the MD&A is part of fulfilling fiduciary responsibilities.
David Trainer, Founder & CEO
Danger Zone 6/24/13: REITs
Even with this recent price drop, the current valuations of REITs look disconnected from their fundamentals.
David Trainer, Founder & CEO
Income and Loss from Discontinued Operations – NOPAT Adjustment
We remove all income and losses from discontinued operations in calculating operating profit because this income/loss will not recur in the future, and we are looking for the true profitability of the continuing and core operations of a company.
David Trainer, Founder & CEO
How To Avoid the Worst Style Mutual Funds
Picking from the multitude of style mutual funds is a daunting task. In any given style there may be as many as 979 different mutual funds, and there are at least 6100 mutual funds across all styles.
David Trainer, Founder & CEO
Change in Total Reserves – NOPAT Adjustment
Reported earnings don’t tell the whole story of a company’s profits. They are based on accounting rules designed for debt investors, not equity investors, and are manipulated by companies to manage earnings. Only economic earnings provide a complete and unadulterated measure of profitability.
David Trainer, Founder & CEO