August 26, 20130Comments

Danger Zone 8/26/13: First Trust Value Line 100 ETF (FVL)

First Trust Value Line 100 ETF (FVL) is in the Danger Zone this week. FVL is another example of a supposedly “passive” ETF that purportedly tracks an index but actually resembles an actively managed portfolio. FVL’s methodology tracks an index, but it is an index in name only.

by David Trainer, Founder & CEO

August 19, 20130Comments

Danger Zone 8/19/13: Rite Aid (RAD)

RAD is up against the ropes right now. The company has to contend with larger, more efficient competitors, significant debt, and declining sales. Don’t be fooled by the 150% growth in the share price this year. RAD is much worse off than its stock suggests.

by David Trainer, Founder & CEO

August 12, 20133Comments

Danger Zone 8/12/13: Tesla Motors (TSLA)

Tesla Motors (TSLA) is in the Danger Zone this week. Up over 350% in 2013, the electric automaker has dominated headlines and made a lot of investors very happy (and a lot of shorts very angry). At ~$150/share, it’s no secret that the stock is expensive. What most investors don’t realize is that there are some significant details buried in the footnotes of TSLA’s SEC filings that materially affect the outlook for shareholders in the company.

by David Trainer, Founder & CEO

August 5, 20130Comments

Danger Zone 8/5/13: American Century Capital Small Cap Value Fund (ACSCX)

American Century Capital Portfolios, Inc: Small Cap Value Fund (ACSCX) is in the Danger Zone this week. ACSCX is bad news for investors from almost any angle. ACSCX has extremely high fees, low quality holdings, and a significant portion of its holdings are not consistent with its stated style exposure.

by David Trainer, Founder & CEO

July 22, 20130Comments

Danger Zone 7/22/13: EPIQ Systems (EPIQ)

EPIQ Systems (EPIQ) is in the Danger Zone this week. The legal technology solutions provider has misleadingly high reported earnings due to a funny accounting rule. Analysts and investors looking at reported earnings have assigned unreasonably high expectations to EPIQ.

by David Trainer, Founder & CEO

July 15, 20130Comments

Danger Zone 7/15/13: Stein Mart (SMRT)

Stein Mart (SMRT) is in the Danger Zone this week and earns my Very Dangerous rating. Hidden items in its filings artificially boost earnings growth and mask significant liabilities.

by David Trainer, Founder & CEO

July 1, 20131Comments

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.

by David Trainer, Founder & CEO

June 24, 20130Comments

Danger Zone 6/24/13: REITs

Even with this recent price drop, the current valuations of REITs look disconnected from their fundamentals.

by David Trainer, Founder & CEO

June 17, 20131Comments

Danger Zone 6/17/13: Citigroup (C)

As the market bulls continue to look to rising interest rates as a sign of future strength for Citi, they ignore the fundamentals of the market and of Citi’s weak profit history.

by David Trainer, Founder & CEO

June 11, 20130Comments

Danger Zone 6/10/13: “Passive” Investors

Passive investors are in the Danger Zone for not recognizing that they are actually active investors.

by David Trainer, Founder & CEO

June 3, 20130Comments

Danger Zone 6/3/2013: Perma-Bears and Bubble Alarmists

I am optimistic about the U.S. economy and I don’t believe we are in bubble. Too many investors and economists are looking at the economy the wrong way.

by David Trainer, Founder & CEO

May 23, 20132Comments

The Truth Behind AAPL’s Numbers

This article provides some empirical evidence behind my putting Apple (AAPL) in the Danger Zone last week because its return on invested capital (ROIC) is outrageously high. That fact underscores why valuing this company or any other with the expectation that such a high ROIC was sustainable would be a mistake.

by David Trainer, Founder & CEO

May 20, 20137Comments

Danger Zone 5/20/2013: Amazon.com (AMZN)

The belief that Internet retail is or will be more profitable than traditional retail is untrue. Amazon is in a competitive, low margin business that cannot justify the profit growth implied in its valuation.

by David Trainer, Founder & CEO

May 14, 201375Comments

Danger Zone 5/13/2013: Apple Inc. (AAPL)

Too many investors are looking at AAPL through the rear view mirror and assume that its sky-high profits and return on invested capital (ROIC) are sustainable. As I detail in my CNBC interview, Apple is not cheap and investors should not underestimate the impact of losing Steve Jobs.

by David Trainer, Founder & CEO

May 6, 20130Comments

Danger Zone 5/6/2013: Charles Schwab Corp (SCHW)

Schwab (SCHW) is in the Danger Zone this week. It also gets my Very Dangerous ratings and is on May's Most Dangerous stocks list.

by David Trainer, Founder & CEO

April 29, 20130Comments

Danger Zone 4/29/2013: Financial Sector ETFs and Mutual Funds

Financials sector ETFs and Mutual Funds are in the Danger Zone this week. The Financials sector ranks last out of the ten sectors in my Sector Rankings for ETFs and Mutual Funds Report. The funds in this sector consistently hold poor stocks and charge investors high fees.

by David Trainer, Founder & CEO

April 22, 20130Comments

Danger Zone 4/22/2013: Sears Holdings (SHLD)

SHLD combines three themes that I have discussed in recent Danger Zone posts: overvaluation due to expectations of a construction rebound, hidden liabilities undermining a company’s financial strength, and online retailing making bricks-and-mortar stores obsolete.

by David Trainer, Founder & CEO

April 15, 20130Comments

Danger Zone 4/15/2013: Stanley Black & Decker (SWK)

Unrealistically high valuation and hidden liabilities outweigh the over-hyped benefits of the growth potential in commercial and residential construction to SWK.

by David Trainer, Founder & CEO

April 8, 20130Comments

Danger Zone 4/8/13: Williams Companies (WMB)

This stock is a great example of another Wall Street trap to avoid: investing based on “sector” theme and following the crowd.

by David Trainer, Founder & CEO

April 1, 20130Comments

Danger Zone 4/1/13: Express Scripts, Inc. (ESRX)

We closed this position on February 24, 2015. A copy of the associated Position Update report is here. Check out this week’s Danger Zone interview with Chuck Jaffe of Money Life

by David Trainer, Founder & CEO

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