Building The Best Model Portfolio: Executive Compensation Aligned With ROIC Webinar


In this webinar, CEO David Trainer, will discuss the importance of return on invested capital (ROIC), why linking executive compensation to ROIC is beneficial, and how New Constructs’ tools can be used to create the best Model Portfolio.

Continue Reading →

FinTech: Disruptive Tech To Parse SEC Filings & Build Valuation Models Webinar


In this webinar, CEO David Trainer, will discuss our propriety research system, what makes us better, and how we can help protect investors, directors, and auditors.

Continue Reading →

5 Ways Corporate Governance Affects Investors and Stock Valuations Webinar


In this webinar, David Trainer, a Wall Street veteran, will discuss corporate governance issues to be aware of, how they can affect an investors portfolio, and how they affect underlying stock prices.

Continue Reading →

The Power Of Quantifying Market Expectations


Sometimes, even the most well recognized experts make shockingly bad predictions. No one truly knows (legally) what the market is going to do next, and the risk involved in that uncertainty is what creates the potential for significant returns.

Continue Reading →

Free Cash Flow (FCF): Explanation & Examples

There are many ways to calculate free cash flow. Most approaches are short cuts to our more comprehensive approach to the calculation. The formula for FCF can be seen in Figure 1. For more on FCF, see within.

Continue Reading →

Economic Earnings: Explanation & Examples

To derive economic earnings, 30+ adjustments must be made to accounting earnings. These adjustments remove items hidden in the footnotes and MD&A of annual filings and close loopholes within GAAP accounting.

Continue Reading →

Weighted Average Cost of Capital (WACC): Explanation & Examples

WACC plays a key role in our economic earnings calculation. It is hard to be 100% certain about the exact cost of a company’s capital. Our guiding principle when calculating WACC is that it is better to be vaguely right than precisely wrong.

Continue Reading →

Return On Invested Capital (ROIC): Explanation & Examples

The formula (see Figure 1) for calculating ROIC is easy. The hard part is finding all the data, especially from the footnotes and MD&A, required to get NOPAT and Invested Capital right. When we calculate ROIC, we make numerous adjustments to close accounting loopholes and ensure apples-to-apples comparability across thousands of companies.

Continue Reading →

Net Operating Profit After-Tax (NOPAT): Explanation & Examples

We calculate NOPAT in two ways, from an operating and financing perspective. See Figure 1. Figure 1 shows the basic calculations. On page 2, we share the complete calculations for specific companies.

Continue Reading →

Invested Capital: Explanation & Examples

We calculate invested capital in two mathematically equivalent ways: financing and operating approach. Figure 1 shows the basic calculations. On page 2, we share the complete calculations for specific companies.

Continue Reading →

How To Protect Your Portfolio As Well As Your Colleague’s Webinar


In this webinar, CEO David Trainer, a Wall Street veteran, will discuss strategies that worked in the last market crash and the one thing that always matters when everything else breaks down.

Continue Reading →

True Value Investing Still Works


Investors looking for value need to take a holistic approach that measures a company’s ability to deliver economic earnings to investors and quantifies the expectations for future cash flows embedded in its current stock price.

Continue Reading →

How Much Quality Is In The “High Quality” ETF?


With the significant drop in the market to start 2016, we can be sure that many investors are looking to shift their portfolios towards higher quality stocks. The challenge is how to define “high-quality” because it is not as straightforward as one might think.

Continue Reading →

Finding Safe Investments In A Dangerous Market Webinar


While trading fads come and go, good fundamental research is required to fulfill your fiduciary duties to your clients and yourself. Without it, realize it or not, you take significant risk that the numbers you use to make a decision are not correct.

Continue Reading →

The Problem With Using Accounting Book Value


In our recent article on the flaws in return on equity, we showed how it has no correlation with several different measures of valuation. However, there is one valuation metric, price-to-book (“P/B”), that, at first, appears to correlate strongly with ROE. A more rigorous look reveals the relationship between the two variables is not as…

Continue Reading →

4 Reasons ROE Is Not A Useful Metric For Investors


Recently, we ran through the various flaws in the price to earnings ratio and explained why investors need to be paying more attention to return on invested capital (ROIC). This week, we’re tackling another of the market’s favorite metrics, return on equity (ROE). Return on equity has a very simple formula: It’s tempting to think…

Continue Reading →

Why PE Ratios Are Not A Good Measure Of Value


We’ve pointed out the flaws in the price to earnings (PE) ratio many times before. Chief among these flaws is the fact that the accounting earnings used in the ratio are unreliable for many reasons:

Continue Reading →

David Trainer On How To Get The Truth About Valuation

In this extended podcast, CEO 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).

Continue Reading →

David Trainer Explains the Right Way to Analyze an Acquisition


In this extended podcast, CEO David Trainer will discuss the right way to analyze the Time Warner Cable and Charter Communications deal and determine whether or not an acquisition creates value.

Continue Reading →

Why Our Education Section Could Change Your Investment Process


If you haven’t noticed, we recently added an “Education” section to our website, accessible via the tab at the top of this and every page. In this tab, you’ll find almost all of the metrics and theory behind our research

Continue Reading →

Page 1 of 4