October 5, 20170Comments

Podcast: Why Dentsply Sirona is in the Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Dentsply Sirona (XRAY).

by Kyle Guske II, Senior Investment Analyst, MBA

October 2, 20170Comments

An Example of Misaligned Incentives Leading to a Bad Outcome

This firm's move to bolster growth via a large acquisition recently resulted in the ouster of top executives. Despite pending new leadership, investors remain at risk given the firm's falling profits, lagging margins and overvalued stock price.

by Kyle Guske II, Senior Investment Analyst, MBA

September 28, 20170Comments

Podcast: Why CommVault Systems is in the Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: CommVault Systems (CVLT).

by Kyle Guske II, Senior Investment Analyst, MBA

September 25, 20170Comments

Failure to Adapt Dooms This Stock

This firm’s late transition to the cloud based software market has left it with falling profits, lagging margins, and a significantly overvalued stock.

by Kyle Guske II, Senior Investment Analyst, MBA

September 21, 20170Comments

Podcast: Why Investors Using GAAP Earnings Are in the Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Investors taking GAAP earnings at face value.

by Kyle Guske II, Senior Investment Analyst, MBA

September 18, 20170Comments

Taking GAAP Earnings at Face Value Puts Investors at Risk

The more investors understand about how GAAP net income omits valuable information, the better equipped they are to find truly hidden gems, or those companies with growing economic earnings and undervalued stock prices.

by Kyle Guske II, Senior Investment Analyst, MBA

September 14, 20170Comments

Alpha-generating Forensic Accounting Examples

New Constructs’ proprietary forensic accounting research empowers investors to identify alpha-generating investment ideas more efficiently than traditional manual approaches. This report highlights investment ideas based on insights our research technology automatically provides on a firm’s true return on invested capital (ROIC) and economic earnings.

by Kyle Guske II, Senior Investment Analyst, MBA

September 14, 20170Comments

Podcast: Why Lion’s Gate Entertainment Is in the Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Lion's Gate Entertainment (LGF.A)

by Kyle Guske II, Senior Investment Analyst, MBA

August 31, 20170Comments

Podcast: Why Carbonite Is In The Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Carbonite (CARB).

by Kyle Guske II, Senior Investment Analyst, MBA

August 29, 20170Comments

Firm Founders Have Moved On; Investors Should Also

Once at the forefront of a new industry, this firm’s product is now commoditized. Attempts to buy its way into a very competitive new market look desperate. The disconnect between high expectations embedded in the stock price and the firm’s weak competitive position pose a significant risk to investors.

by Kyle Guske II, Senior Investment Analyst, MBA

August 24, 20170Comments

Podcast: Why TrueCar Is In The Danger Zone

Investment Analyst Kyle Guske II sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: TrueCar (TRUE).

by Kyle Guske II, Senior Investment Analyst, MBA

August 22, 20170Comments

See Us On CNBC Discussing Salesforce @ 4ET Today

Tune into CNBC on Tuesday August 22 at 4 pm EST to learn more. New Constructs CEO, David Trainer, will discuss salesforce’s business and its current valuation.

by Kyle Guske II, Senior Investment Analyst, MBA

August 21, 20174Comments

TrueCar Can’t Serve Two Masters

TrueCar shares the same fatal flaw that sunk Angie’s List. As a middleman, it has to appeal to consumers while remaining valuable to its actual customers, car dealers. In trying to balance the needs of these two opposing sides, TrueCar is conflicted and struggles to provide value to either.

by Sam McBride

August 17, 20170Comments

Podcast: Why Etsy Is In The Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life and to talk about our Danger Zone pick this past week: Etsy Inc. (ESTY).

by Kyle Guske II, Senior Investment Analyst, MBA

August 14, 20170Comments

Too Much Market Value for Too Small a Market

This niche business generates plenty of “adjusted EBITDA,” but no real profits. It also has too much market value for too small a market, especially in light of its deteriorating competitive position. Absent a textbook case of “stupid money risk,” (i.e. a grossly overpriced acquisition) the risk/reward does not look good for equity investors.

by Kyle Guske II, Senior Investment Analyst, MBA

August 14, 20170Comments

Closing Danger Zone Pick: VirnetX Holding Corp (VHC)

While business prospects still hinge upon patent infringement rulings, the significantly lower valuation no longer presents the unbalanced risk/reward it once did.

by Kyle Guske II, Senior Investment Analyst, MBA

August 14, 20170Comments

Closing Danger Zone Pick: Verifone Systems (PAY)

While fundamental issues remain, such as a bottom-quintile ROIC and a challenging competitive landscape, we are inclined to take profits.

by Kyle Guske II, Senior Investment Analyst, MBA

August 14, 20170Comments

Closing Danger Zone Pick: Shutterstock (SSTK)

The significant reduction in stock price and embedded market expectations diminishes the downside risk and we are closing the position.

by Kyle Guske II, Senior Investment Analyst, MBA

August 14, 20170Comments

Closing Danger Zone Pick: Celadon Group (CGI)

The significant reduction in stock price and embedded market expectations diminishes the downside risk and we are closing the position.

by Kyle Guske II, Senior Investment Analyst, MBA

August 11, 20171Comments

Disney Dumps Netflix, And So Should Investors

Investors should capitalize on the opportunity provided by Disney’s streaming service announcement and the market’s overreaction to earnings. Buy into a great company at an attractive valuation (Disney) and sell an overvalued company with holes in its business model (Netflix).

by Sam McBride

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