Stock Picking Articles
New Constructs’ stock picks are regularly featured by Barron’s, CNBC, SumZero and other experts. We assign one of five ratings to every stock under coverage: Most Attractive (best rating), Attractive, Neutral, Dangerous, Very Dangerous (worst rating). These same ratings apply to ETFs and mutual funds.
Material changes in the present value of expected cash flows are the key driver of material changes in a stock price. Accordingly, determining the investment merit of a given stock boils down to identifying gaps between the investor’s expectations for future financial performance and the market’s expectations.
The price-to-economic book value (“Price-to-EBV”) ratio measures the difference between the market’s expectations for future profits and the no-growth value of the stock. Economic book value (“EBV”) is our measure of the no-growth value of a stock.