New Constructs
4Comments

Raising Fees Is A Desperate Measure: Sell BAC

Recent news that Bank Of America (BAC) is considering jacking up its fees on basic checking accounts suggests the company is bad shape. As I wrote yesterday, I believe BAC stock is headed back to its lows and today’s news confirms my view that the expectations basked into the stock’s valuation are writing checks that the company cannot cash.
by David Trainer, Founder & CEO
New Constructs
0Comments

Smoking Out the Truth: Buy MO

As discussed in “The Real Earnings Season Starts Now”, annual reports are the best source for developing investment ideas. I provided my clients with dozens of insights in 2011 that delivered impressive returns, and I continue that trend with my recommendation of MO.
by David Trainer, Founder & CEO
1Comments

Utility Sector: Check The Ingredients Before Buying

High dividend yields are NOT enough to warrant investing in the utilities sector. Too many investors put their hard-earned money in utility stocks with the assumption that relatively high-yielding dividends from stable business make a good investment. The real question that investors in any equity security must ask is: does my expected return from a stock justify the risk of investing in it?
by David Trainer, Founder & CEO
New Constructs
1Comments

Sell Starbucks (SBUX) – Still A Bad Stock

Similar to my prior interviews on SBUX, I found it easy to make the bear case for a stock that is as expensive as Starbucks (SBUX). As my regular readers know, when I say "expensive", I back that up with details such as: to justify its $40 stock price (closing price from prior day), SBUX had to grow profits at 10% compounded annually for more than 25 years.
by David Trainer, Founder & CEO
1Comments

Buy LRCX: More Value Than Meets the Eye

Most of my research and publishing tends to focus on companies manipulating accounting rules to make their reported earnings look better than the real economic cash flows of their business. It is unfortunately rare that I find a company whose economic earnings are outpacing the reported accounting results and whose stock is cheap. One such company is Lam Research (LRCX – very attractive rating). One of September’s most attractive stocks, LRCX offers investors hidden value.
by David Trainer, Founder & CEO