Frequently Asked Questions
Q.My Credit Card is going to expire soon how do I update it?
A.To update your credit card information, please fill out this form.
Q.How often does New Constructs update ETF/Mutual Fund information?
A.New Constructs ETF and mutual fund ratings are updated daily.
Q.How is New Constructs different?
A.We rigorously analyze every annual and quarterly report from cover to cover. We have more insight into the truth behind the accounting as represented in our successful stock picks, many of which have been featured in Barron’s. There are several analysis methodologies available to investors today that are unnecessarily complex.
Our CEO helped launch the value-based research business at Credit-Suisse, which became Credit-Suisse HOLT. One of the reasons our founder and CEO started New Constructs is his belief that a model is only as good as its inputs. No matter how fancy the model, it is no good if the data involved is incomplete.
The core competency of New Constructs is going through SEC filings ourselves and pulling the best data in the world to understand economic margin (ROIC-WACC). We are more transparent about our models and data because we want our clients to know how much work we do and challenge our competitors to show the same level of diligence.
Q.How often does New Constructs update stock information?
A.New Constructs stock ratings and company models are updated daily based on the closing price from the prior day. All valuation metrics in our ratings (FCF Yield, Price-to-EBV Ratio, and Growth Appreciation Period) incorporate the stock’s daily closing price. These metrics change as the price changes – sometimes causing a ratings change. Growth Appreciation Period can also change when we update the forecast in our models with new consensus revenue estimates.
We update forecasts at least once a quarter. The Quality of Earnings metrics in our ratings (Economic Earnings and ROIC) are based on the data we collect from annual reports – 10-Ks from the SEC. We rely on annual reports because they are the only complete data set with full disclosure in the footnotes and MD&A. We find that quarterly financial data, more often than not, is misleading.
However, we review all aspects of the company and stock daily to ensure our ratings are still relevant. We will not hesitate to suspend our ratings for a stock if we believe our models do not adequately represent the risk/reward of the stock. We review all the filed with the SEC daily. Anytime a new 10-K or 10-K/A comes out, we update our models immediately.
Q.When a reclassification of a company occurs based on the most recent quarterly financial information does New Constructs make note of the date of new quarterly information so that it can't be missed?
A.Yes, we analyze all 10-Qs and 10-Ks directly; so we see any and all reclassifications as soon as they occur. Our Alerts service and Analyst Notes inform clients as soon as we parse a new 10-Q or 10-Q. A key difference between New Constructs and our competitors is that we parse SEC filings directly while competitors relies on Compustat data feeds. We created our own data collection technology and process because Compustat data is not accurate or complete enough for us to build models with enough integrity to meet our clients’ expectations.
We suspect that the few, if any, of our competitors have seen the inside of a 10-K or 10-Q in many years. Analyzing filings is difficult and tedious work. We take pride in doing that work with unrivaled precision and scale by leveraging proprietary data collection technology that we’ve been developing for nearly 15 years.
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