In this webinar, we provide details and models showing how to calculate Invested Capital and how it relates to Net Operating Profit After Tax (NOPAT) and return on invested capital (ROIC).
Thesis: Management can boost the market value of American Express in the amounts below by aligning the firm’s strategy and performance compensation with real cash flows or what we call return on invested capital (ROIC).
In the search for safe investments in today’s volatile markets, investors should focus on companies that have a history of creating shareholder value, the ability to earn quality returns on capital, and an undervalued stock. This week’s Long Idea, Wells Fargo & Company (WFC) not only fits the description of a safe investment, but its shares are also greatly undervalued.
The All Cap Growth style ranks fifth out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 2 ETFs and 448 mutual funds in the All Cap Growth style as of January 28, 2014.
As regulators dole out punishments that fit the crimes, they are finally closing many of the illegal trading loopholes that have driven so much of Wall Street profits over the past decade.
The All Cap Value style ranks fifth out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 2 ETFs and 238 mutual funds in the All Cap Value style as of October 17, 2013. Prior reports on the best & worst ETFs and mutual funds in every sector and style are here.
As the market bulls continue to look to rising interest rates as a sign of future strength for Citi, they ignore the fundamentals of the market and of Citi’s weak profit history.
Asset write-downs are unusual charges that don’t appear on the income statement because they are bundled in other line items. Without careful footnotes research, investors would never know that these non-recurring items distort operating earnings by overstating core-operating costs.
I am optimistic about the U.S. economy and I don’t believe we are in bubble. Too many investors and economists are looking at the economy the wrong way.
Finding the best ETFs is an increasingly difficult task in a world where a new ETF seems to be born every 10 seconds.
Check out my latest Danger Zone interview with Chuck Jaffe of MarketWatch.com.
This week, a former member of our Most Dangerous Stocks, is in the Danger Zone.
For the first time in many months, both Citigroup (C) and Bank Of America (BAC) are not on our Most Dangerous Stocks list as of the release of the August report.
This report identifies the “best” ETFs and mutual funds based on the quality of their holdings and their costs. As detailed in “Low-Cost Funds Dupe Investors”, there are few funds that have both good holdings and low costs. While there are lots of cheap funds, there are very few with high-quality holdings.
Everyone wants diligence. Few will ever turn it down. The problem is that diligence is expensive. New Constructs makes diligence cost-effective.
When I ran across the recent article “270,033 pages later, a chance to catch our breath…”, I could not help but admire footnoted.org’s marketing moxy.
The article provides a count of the number of pages of 10-K filings that have poured in during the real earnings season. It also highlight a couple of the largest filings. At first glance, it is easy for one to assume that all of the 270,033 pages were also analyzed.
Nearly all of the investing world ignores 10-K season. 10-Ks contain the most important financial information that companies provide all year.
The Financials sector ranks last out of the ten major sectors as detailed in our sector roadmap. It gets my Dangerous rating, which, like my fund ratings, is based on aggregation of stock ratings for each of 563 companies in the sector. The Financials sector is the bottom of the sector barrel.
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.
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.
I take great pleasure in recommending investors buy Clorox (CLX) – an attractive-rated stock, not just because of its strong profitability and cheap valuation but also because of the unusually high quality and integrity of its financial reporting.
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