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Danger Zone

September 19, 20142Comments

3 Reasons Why Amazon’s “Cash Flow” Is A Trap

In truth, neither AMZN’s $5.5 billion of operating cash flow nor the $1 billion in free cash flow that bulls claim reflect the actual economics of the business.
by David Trainer, Founder & CEO
September 18, 20140Comments

This Week’s Danger Zone: This Company Can’t Acquire Profit Growth

Every week, check back to find out our current pick for one of the riskiest stocks in the market.
by David Trainer, Founder & CEO
September 15, 20140Comments

Danger Zone: 9/15/14

The company in the Danger Zone this week has impressive revenue, but declining cash flow over that same timeframe.
by David Trainer, Founder & CEO
September 8, 20140Comments

Danger Zone 9/8/14: How to Spot a Company Ready to Implode

Dwindling cash reserves and increased competition are only the surface problems for this company. Throw in turmoil in the boardroom and we have a recipe for disaster.
by Andre Rouillard
September 4, 20140Comments

Danger Zone: Glu Mobile (GLUU)

For the long-term investor, GLUU is a company with no profits, moderate growth, and management that consistently destroys shareholder value
by David Trainer, Founder & CEO
August 19, 20140Comments

3 Reasons Why Amazon’s “Cash Flow” Is A Trap

As a follow up to our Danger Zone article on May 20th, 2013, we review the "cash flow" thesis proffered by Jeff Bezos and Amazon (AMZN) bulls.
by David Trainer, Founder & CEO
August 18, 20140Comments

Danger Zone: Price to Earnings Ratios

The vast majority of evidence suggests that P/E ratios are an unreliable way to measure the true value of stocks.
by David Trainer, Founder & CEO
August 14, 20141Comments

Danger Zone: Newell Rubbermaid (NWL)

Investors seem to be under the mistaken conclusion that this is a safe value stock since it sells durable consumer goods, but that does not appear to be the case. NWL is a dangerous, overvalued stock that investors should avoid.
by David Trainer, Founder & CEO
August 11, 20140Comments

Danger Zone: Small Cap Blend Investors

All of the small cap styles earn our Dangerous rating, but Small Cap Blend Investors land in the Danger Zone due to the disproportionately large allocation to the worst funds in the style.
by David Trainer, Founder & CEO
August 4, 20140Comments

Danger Zone 8/4/14

This week’s Danger Zone pick features a high growth company with a great deal of buzz but little opportunity for long-term profitability.
by David Trainer, Founder & CEO
July 28, 20140Comments

Danger Zone: First Trust Utilities AlphaDEX Fund ETF (FXU)

First Trust Utilities AlphaDEX Fund ETF (FXU) is in the Danger Zone this week due to its poor holdings. FXU might not have any obvious red flags on the surface, but a look at its holdings reveals a number of stocks with the potential to blow up, including some recent features in the Danger Zone.
by David Trainer, Founder & CEO
July 23, 20140Comments

Angie’s List Is In Trouble

Angie's List (ANGI) reported a larger than expected loss on Wednesday, and its revenues grew slower than expected.
by David Trainer, Founder & CEO
July 21, 20140Comments

Danger Zone: Stocks With Most Misleading Non-GAAP Earnings

Companies usually pitch these alternative metrics as “supplementary” data to help investors get a “better” view of the profitability of the business. Instead, we see red flags, not a better view.
by David Trainer, Founder & CEO
July 14, 20140Comments

Danger Zone 7/14/14

This week’s Danger Zone pick features a consumer goods company with inflated earnings growth and an unrealistic valuation. All New Constructs subscribers can download the full report here – after logging in at
by David Trainer, Founder & CEO
July 7, 20140Comments

Danger Zone 7/7/14

This week's Danger Zone pick can be downloaded from the New Constructs website
by David Trainer, Founder & CEO
July 3, 20140Comments

This Week’s Danger Zone: A Popular Valuation Metric

Every week, check back to find out our current pick for one of the riskiest stocks in the market.
by David Trainer, Founder & CEO
June 30, 20142Comments

Cutting Through Valeant’s Story

Valeant has been guilty of some dubious assertions in its attempts to defend itself from claims that its business model is nothing more than a rollup scheme and that its stock is overvalued.
by David Trainer, Founder & CEO
June 30, 20140Comments

Danger Zone: Hawaiian Electric Company (HE)

Utilities are typically thought of as safe investments, but across the board we see Utilities as overvalued currently, and HE is one of the worst.
by David Trainer, Founder & CEO
June 17, 20140Comments

10 Wonderful Companies That Are Bad Stocks

Sometimes, a great company can actually be a risky stock when it gets significantly overvalued.
by David Trainer, Founder & CEO
June 16, 20140Comments

Danger Zone: United States Cellular (USM)

USM's profits, margins, and return on invested capital are all in decline, and its revenues have been stagnant for a number of years. In addition, reported earnings per share conceal the company’s growing profit losses.
by David Trainer, Founder & CEO
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