Structured deals help fuel the bubble in private tech companies. Startups get cash so they can keep marketing like crazy, VCs get guaranteed payouts, and everyone gets the prestige and attention of being a “unicorn”. So who suffers? IPO investors that are tricked into believing these massive valuations have any basis in reality.
It’s no secret that non-GAAP earnings allow management to directly manipulate their performance metrics. Investors must look past non-GAAP metrics to protect their portfolios. While non-GAAP tricks may provide some short-term boosts to stock prices, eventually reality sets in and the true economics of the business rule the day.
To learn the dangers of non-GAAP earnings and how to overcome them, join CEO David Trainer, a Wall Street veteran, in this week’s free webinar “The Dangers of Non-GAAP Earnings.” David will discuss what goes into non-GAAP earnings, why they create a problem in investing and analysis, and where you should focus when analyzing companies who report non-GAAP results.
While most earnings manipulation is not as blatant as the recent Valeant revelations, the fact remains that investors have to be on the lookout for earnings management at all times. To be properly vigilant, it’s important to understand why executives misstate earnings. When you understand the why, you’ll have a better sense of what you need to look for.
Unadjusted GAAP earnings already obfuscate true profits enough, and non-GAAP earnings lead investors even farther astray. In turn, non-GAAP earnings are often used to line the pockets of insiders at the expense of shareholders.
Don’t get burned buying a stock without business operations that cannot support the dividend. Chasing yield could leave you holding the bag once dividends get cut and share prices fall. Find out how to avoid these traps in this week’s webinar “ How To Avoid Dividend Traps.”
Investors need to be careful and make sure they do more research beyond just looking at the dividend yield of a stock. Here are four stocks with high dividends that can burn unwary investors.
Five of our long calls over the past year stand out for their impressive returns and continued stability. Investors should take another look at these five stocks that are up 10% or more since our original calls and still earn an Attractive-or-better rating.
In case you missed it, or in case you wanted to watch it again, here is our live webinar from this week. In this webinar, David Trainer, will discuss the challenges of investing, break down the process on how to make money in the market, and go into detail about some recent examples such as General Motors (GM).
How does one make money in the market? The answer to this question depends on whether you are a speculator or an investor. If you are an investor, we may be a good fit for your research process.
Markets are getting restless. Valuations are stretched, the global economy is shaky, and after six years of a bull market investors are taking every excuse to sell. Now, more than ever, it’s important to own quality businesses at fair valuations.
How do you navigate the numerous sources of investment advice? How do you determine who is telling the truth and who is not? The answers to these important questions are key to successful investing.
Many investors in professional services firm Towers Watson (TW) have viewed the recent merger with reinsurer Willis Group (WSH) as a raw deal for TW shareholders. The crux of their argument comes down to the fact that the value of the deal, based on share prices before the deal was announced, was a ~12% discount to where TW had been trading.
Buried in the footnotes and MD&A, you can find where reported expenses understate true costs, red flags for earnings manipulation and significant differences that need to be reconciled when comparing companies. If you want to understand the underlying economics of the company’s business, you have to understand its accounting policies.
Integrity Research Associates, in a post titled “When a ‘Buy’ Isn’t Really a ‘Buy”, recently highlighted the untrustworthiness of Wall Street stock ratings.
What comes up must come down right? As the seven-year bull market finds its strength tested the past two weeks, many momentum stocks, which have seen their share prices soar, found their valuations crashing back to earth rather abruptly.
Over the past two weeks, the major indices have all fallen over 10% and entered correction territory. With no end in sight, investors must ask, “how can I protect my portfolio through the ups and downs in the market?”
The cat is out of the bag. CFOs admit that they manipulate accounting rules to “misrepresent earnings”. They also say that Wall Street analysts play along. This week we’re putting Wall Street analysts in the Danger Zone.
Back in 2013, we wrote about all the errors and issues we discovered when attempting to use XBRL data for our models. In the past couple years, XBRL has definitely come a long way in terms of improving the quality of the data, but there’s a lot of work left to do.
Warning of tech-bubble-like overvaluation in the IPO market, we’ve previously put recent IPO companies Wayfair, Box, and GoDaddy in the Danger Zone. This week we’re turning the tables and putting IPO investors in the Danger Zone as we reveal many of the hidden dangers of IPO investing today.
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