Incorporated in July 2002, New Constructs is an independent investment research firm, specializing in quality-of-earnings, forensic accounting and discounted cash flow valuation analyses for public companies. Our research coverage base includes reports and ratings for over 3,000 company stocks, 7,000 mutual funds, and 400 ETFs.
Our Research Philosophy
Accounting data is not designed for equity investors, but for debt investors. Accounting data must be translated into economic data to understand profitability and the valuation relevant to equity investors. Respected investors (e.g. Adam Smith, Warren Buffett and Ben Graham) have repeatedly emphasized that accounting results should not be used to value stocks. Economic Earnings are what matter because they are:
- Based on the complete set of publicly-available financial information.
- Comparable across all companies.
- A more accurate representation of the underlying cash flows of the business.