March 5, 20122Comments

Sell BAC: Management Is Running Out of Gimmicks

Year to date, Bank Of America (BAC) stock is up nearly 45% compared to the S&P at +about 8%. BAC stock has bounced back nicely after dropping precipitously at the end of last year. I would call the 45% bounce a “dead cat” bounce because I expect the stock to fall right back to $5/share, where it bottomed last Thanksgiving, or lower.

by David Trainer, Founder & CEO

March 1, 20124Comments

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

March 1, 20120Comments

Wall $treet Week Returns: New Constructs’ Unique Research and Very Attractive Rating for AAPL

My interview with Wall $treet Week focuses on the uniquely rigorous research of New Constructs and three of our top stock picks.

by David Trainer, Founder & CEO

November 15, 20110Comments

Forensic Accounting Says Avoid Energy & Financial Stocks

As one financial scandal follows another, it seems the good guys are having a tougher time catching the bad guys. Recent revelations about MF Global’s ponzi scheme are another reminder of how our regulatory and oversight systems seem to let whales pass through their net.

by David Trainer, Founder & CEO

October 18, 20114Comments

ETF Shoppers: Accounting Trickery At Its Worst In Financial Sector

There are 25 financial sector ETFs. Per Figure 1, these 25 ETFs have drastically different stock holdings and, therefore, allocations. The lowest number of holdings is 24 while the highest is 496. For starters, investors interested in the financial sector cannot expect many good investment options given that the sector gets my “dangerous” rating and ranks ninth out of the ten sectors that make up the economy. Details are in our sector roadmap report.

by David Trainer, Founder & CEO

September 7, 20110Comments

Should Directors Ignore Those One-Time Items?

I do not think so. The question, however, is not so much about what directors ignore. You cannot ignore something about which you are unaware. The real issue is that most directors and investors are simply unaware of the many one-time items because they are buried deep in the annals of footnotes in annual reports or 10-K filings.

by David Trainer, Founder & CEO

May 3, 20115Comments

Sell Morgan Stanley Before It Sells You Down the River

When Morgan Stanley (MS) started in 1935, there were around fifteen employees. For 2010, the company reported 62,542 employees. Bigger is not always better. And for big, publicly-traded companies, big tends to be worse especially when it comes to financial reporting.

by David Trainer, Founder & CEO

February 15, 20113Comments

Stock Pick of the Week: Buy Discover Financial Services (DFS)- Very Attractive Rating

HIDDEN GEMS: 1. Our discounted cash flow analysis shows that DFS’s current valuation (stock price of $21.80) implies that the company’s profits will decline by 40% and never grow again. 2. Economic earnings are growing faster that reported accounting earnings. 3. Free cash flow of $2.8bn or 24% of its enterprise value during the last fiscal year.

by David Trainer, Founder & CEO

December 2, 20101Comments

The Leak on WikiLeaks – Regulators Knew About Risks That Led to Financial Fallout

While I cannot predict what WikiLeaks will leak about some major banks, I have a hunch that one of the revelations might be from a special New Constructs report provided to the Senate Banking Committee’s Subcommittee on Securities, Insurance, and Investment.

by David Trainer, Founder & CEO

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