March 24, 20210Comments

The Magic Kingdom Is the Streaming Industry’s Micro-Bubble Winner

This week, we focus on a firm that is well-positioned to thrive in the increasingly competitive video streaming market.

January 21, 20200Comments

The Truth About Netflix’s Valuation – Yahoo Finance

We joined Yahoo Finance’s On the Move on Tuesday, January 21 to provide insights into Netflix’s competitive position, valuation, and the state of the streaming wars.

by Kyle Guske II, Senior Investment Analyst, MBA

March 7, 20194Comments

Loss of Licensed Content Is an Underrated Crisis for Netflix

As legacy media companies pull content, Netflix could lose much of its value to consumers just as the competition heats up.

by Sam McBride

September 25, 20180Comments

Investors Say No Thanks to Overpriced Acquisitions

Merger Monday is back. The market responded by sending shares of these three companies deep into the red.

by Sam McBride

January 31, 20180Comments

Tax Reform Winners: Companies with Deferred Tax Liabilities

Most public companies should benefit from the new tax law and some of the biggest winners will be companies with large deferred tax liabilities (DTLs).

by Sam McBride

October 26, 20160Comments

The Best Acquisition We’ve Seen in 2016

While we’ve taken issue with many of the large acquisitions in 2016, this deal not only passes the economics test, but also creates a combined firm with a strategic focus on the future.

by Kyle Guske II, Senior Investment Analyst, MBA

August 15, 20160Comments

Danger Zone: 8×8 (EGHT)

This week’s Danger Zone is a company that claims consistent profitability and continued success, despite years of shareholder value destruction. Misleading non-GAAP results, large losses, and an overvalued stock price land 8x8 in the Danger Zone.

by Kyle Guske II, Senior Investment Analyst, MBA

April 27, 20160Comments

DreamWorks Animation Is Not Worth What Comcast Will Pay

Comcast would represent DWA’s saving grace, a company with ample cash for DreamWorks Animation to burn through. We would caution Comcast though, as acquiring DWA at current prices not only destroys shareholder value

by Kyle Guske II, Senior Investment Analyst, MBA

September 10, 20150Comments

Survive the Market Storm With This Telecom Stock

Telecom and wireless operators are often cited as following the same path as traditional television providers, e.g. Comcast (CMCSA) and Time Warner Cable (TWC), which many believe are being replaced by newer, streaming providers like Netflix (NFLX), Amazon (AMZN), or Google’s (GOOGL) YouTube. This negative view has created an investing opportunity in one of the best companies the telecom industry has to offer.

by Kyle Guske II, Senior Investment Analyst, MBA

February 19, 20150Comments

This Stock Has One of the Highest ROICs in Our Coverage Universe

This week's stock pick of the week has one of the highest returns on invested capital (ROIC) in our model, and its recent guidance update and cheap valuation indicates that now might be the perfect entry point.

by Andre Rouillard

May 20, 20140Comments

Winners and Losers In AT&T’s Acquisition of DirecTV

After a few weeks of rumors, on Sunday AT&T (T) confirmed its $95/share offer for DirecTV (DTV). The deal will be part stock and part cash, and is expected to close within 12 months if the deal meets regulatory approval.

by David Trainer, Founder & CEO

May 19, 20140Comments

Danger Zone: DreamWorks Animation (DWA)

Currently, everything is going against this stock. Momentum is negative, the valuation is still high, and profits are on a long-term downward trend.

by David Trainer, Founder & CEO

April 22, 20140Comments

Large Cap Blend Style

The Large Cap Blend style ranks first out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report.

by David Trainer, Founder & CEO

February 27, 20140Comments

Danger Zone: Comcast (CMCSA)

The Time Warner deal is a smokescreen for the fact that Comcast faces many problems to which it does not have an answer. The market already understands that CMCSA has overpaid, which is why the stock is down 5% since the acquisition was announced. And the price will drop further as the market catches on to the larger competitive issues that Comcast faces.

by David Trainer, Founder & CEO

September 11, 20130Comments

New Stocks For Most Attractive/Dangerous Lists

September sees 16 new stocks make our Most Attractive list and 14 new stocks fall into the Most Dangerous category. Our Most Attractive stocks have high and rising return on invested capital (ROIC) and low price to economic book value ratios. Most Dangerous stocks have misleading earnings and long growth appreciation periods implied in their market valuations.

by David Trainer, Founder & CEO

August 21, 20134Comments

Deferred Compensation Assets and Liabilities – Valuation Adjustment

The net amount of deferred compensation is included in shareholder value. If a company has a net liability, future cash flows will be diverted to pay for that obligation. If a company has a net asset, then any future increases in the obligation will not need to be met with new contributions from the company. Instead, the company can return that cash to shareholders.

by David Trainer, Founder & CEO

August 19, 20134Comments

Net Deferred Tax Assets and Liabilities – Valuation Adjustment

We subtract net deferred tax liabilities (DTLs minus DTAs) from our calculation of shareholder value as they are real future cash obligations that limit the amount of money available for distribution to shareholders.

by David Trainer, Founder & CEO

August 15, 20132Comments

Adjusted Total Debt – Valuation Adjustment

The fair value of a company’s total debt is the current amount the company would need to pay to retire the debt and settle the claims of the creditors. This fair value of debt is subtracted from shareholder value because the firm would need to settle these claims before it could return any cash to shareholders.

by David Trainer, Founder & CEO

August 14, 20130Comments

Minority Interests – Valuation Adjustment

We subtract the fair value of the minority interest liability from shareholder value in our DCF model as the minority interest shareholders have the rights to that portion of the cash flows. Without careful research, investors would never know that these minority interest liabilities distort GAAP numbers.

by David Trainer, Founder & CEO

August 1, 20132Comments

Deferred Compensation Assets – Invested Capital Adjustment

Deferred compensation plans delay employee compensation until a later date. The assets held for these plans are used to compensate employees in the future, not to generate profits for the company. As such, they should not be factored into the calculation of a company’s return on invested capital (ROIC).

by David Trainer, Founder & CEO