David Trainer Provides His Best Pair Trade Idea for 2015


In this podcast, CEO David Trainer provides a pair trade for 2015 with two technology stocks that could not be more different from one another.

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What We’re Reading This Morning — December 12, 2014


The stock market is ignoring the message from junk bond traders

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Excess Cash – Valuation Adjustment

excess cash

For most companies, we estimate the required amount of cash for normal business operations to be around 5% of sales. However, many companies hold cash or other liquid investments above and beyond this amount. We refer to this extra amount as excess cash. This surplus cash can be used for any number of purposes, including acquisitions, research and development, and cushioning the company against economic downturns. Excess cash is immediately available for distribution to shareholders, so we add a company’s excess cash to our calculation of shareholder value.

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Excess Cash – Invested Capital Adjustment


Most companies hold some cash—or cash equivalents in the form of investments—above this required amount. Companies hold excess cash in order to cushion against economic downturns, prepare for acquisitions, or any number of other reasons. Sometimes, past profits pile up on balance sheets and are a form of excess cash. Excess cash is not needed for the operations of a company. It is removed from our calculation of invested capital.

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“Index” Label Myths


The word “index” in an ETF label does not always mean that investors are getting the specific exposure they seek. Diligence on ETF holdings is necessary despite what the providers might have you believe. Below I dispel the following myths concerning index ETFs.

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Footnotes Diligence Drives CSCO Pick

If you bought Cisco Systems Inc (CSCO) last August when I recommended it to investors, or when I recommended it again in January, or any time between May 10, 2012 and now when the stock has had my Very Attractive rating, then today has been a good day for you.

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Top Stock Picks: 2012 in Review


Everyone wants diligence. The problem is that diligence is expensive. I make diligence cost-effective. See how my research paid off for clients last year.

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Sector Rankings For ETFs & Mutual Funds


At the beginning of the first quarter of 2013, only the Consumer Staples Sector earns an Attractive rating.

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Buy CSCO: A Treat For Value Investors


Seldom do value investors get a chance to have their cake and eat it too. And that is exactly what we have with Cisco (CSCO) stock.

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Roadmap to the Best & Worst ETF & Mutual Fund Styles


None of the fund styles earn a rating better than Neutral. See Figure 1 for my rankings on all twelve investment styles. My style ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each style.
Note that the attractive-or-better Predictive ratings do not always correlate with attractive-or-better total annual costs. This fact underscores that (1) low fees can dupe investors and (2) investors should invest only in funds with good stocks and low fees.

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Best and Worst Funds: All-cap Growth Style


The all-cap growth investment style ranks fifth out of the twelve fund styles as detailed in style roadmap. It gets my Neutral rating, which is based on aggre­gation of my ratings on 465 all-cap growth funds.

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