A newcomer to our Most Attractive Stocks for July, this small cap stock has an excellent risk/reward profile, which earns it our highest Rating: Very Attractive.
As highlighted in LPL Group excellent "Mid-Year Outlook for 2010", the economy is moving from 'recovery' mode to 'expansion' mode, which is very different from moving from 'recovery' back to 'recession' - a prediction made by many attention-seeking alarmists these days. We are still growing, just not as fast.
Here is a free copy of our report on SCHW for Ask Matt readers. This report provides details behind Matt's analysis of SCHW in his recent article in USA Today:
The difference between Investing and Speculating is much larger than Wall Street would have you believe. In fact, they could not be too more different activities. Speculating is gambling. Investing is intelligent decision-making.
In April, GM bragged about having paid back the balance of its $6.7 billion loan under the Troubled Asset Relief Program. In truth, the did nothing of the sort. They simply pirated taxpayer funds to cover their losses.
Hidden Gem - GPS: economic earnings are rising faster than reported accounting earnings b/c the company lowered the capital employed to run the business. GAAP earnings do not capture increase capital efficiency of the business.
TheStreet.com recently published three articles quoting me on SIRI. Andrea Tse called and, after reviewing our models on SIRI, I told her that the stock was Dangerous because:
You have to read this to believe it: "SEC Porn Problem: Officials Surfing Sites During Financial Crisis, Report Finds". And we wonder why Wall Street stays a several steps ahead of the regulators.
Most of the time when I meet with investors (large and small) and explain what I do and New Constructs does, they are astonished about what I explain as the reality of the investing world. They always ask: "What are regulators doing?"..."How can they allow these things to go on?"
The answers to that question are:
"Close the revolving door between the S.E.C. and Wall Street. At every turn we keep coming back to an enormous barrier to reform: Wall Street’s political influence. Its influence over the S.E.C. is further compromised by its ability to enrich the people who work for it. Realistically, there is only so much that can be done to fix the problem, but one measure is obvious: forbid regulators, for some meaningful amount of time after they have left the S.E.C., from accepting high-paying jobs with Wall Street firms."
There are two primary reasons a stock gets on our Most Dangerous List:
1. Misleading earnings: reported GAAP earnings are positive and rising while economic earnings are negative and declining
2. Expensive valuation: future cash flow expectations embedded in the current price are unusually high especially compared to historical performance.
Free copy of our report on NYX is in the Free Archive on www.newconstructs.com. Or just click here: NYX Company Valuation Report.
Unlike the typical research firm, New Constructs aims to help our customers not exploit them. New Constructs only makes money by selling reports, no investment banking or trading fees pollute our research.
To see how I apply my analytical techniques, look no farther than the New Constructs website. Indeed, we have a large and generous Free Archive of research reports that show you exactly what we do and how we do it. We are not afraid to be transparent because we have nothing to hide.
Watch this video. "The Warning". The description of the video from the website: "In the midst of the 1990s bull market, one lone regulator warned about the derivatives dangers -- and overnight became the enemy of some of the most powerful people in Washington..."
The best strategy for making money in stocks is "buy low expectations & sell high expectations." Sounds easy — but if it was easy, everyone would do it, right?