The Best and Worst of the Information Technology Sector 2Q16


The Information Technology sector ranks fourth out of the ten sectors as detailed in our 2Q16 Sector Ratings for ETFs and Mutual Funds report. It gets our Neutral rating.

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Open Letter to Larry Ellison: How To Boost Oracle’s Value By $65 Billion


Thesis: Management can boost the market value of ORCL in the amounts provided by aligning the firm’s strategy and performance compensation with real cash flows or what we call return on invested capital.

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Danger Zone: Pure Storage (PSTG)


This week’s Danger Zone hones in on another IPO from 2015 that may have been one of the last to capitalize on the easy money in the market. Post IPO, we believe it won’t take long for investors to realize this company is bleeding cash, has no profits, and faces stiff competition moving forward.

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Long Idea: Brocade Communications Systems (BRCD)


This week’s Long Idea not only pays a quality dividend, but when combined with aggressive share repurchases, provides investors a yield over 9%. Best of all, it is anything but a trap. With consistent profit growth, strong free cash flow, and the opportunity for share price appreciation, Brocade Communications Systems (BRCD) is this week’s Long Idea.

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The Best and Worst of the All Cap Blend Style 4Q15

The All Cap Blend style ranks third out of the twelve fund styles as detailed in 4Q15. Last quarter, the All Cap Blend style ranked third as well. It gets our Neutral rating.

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New Stocks on Most Attractive and Most Dangerous Lists: October 2015


Our Most Attractive Stocks (-1.6%) underperformed the S&P 500 (-1.4%) last month. Our Most Dangerous Stocks (-3.6%) outperformed the S&P 500 (-1.4%) last month.

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Danger Zone: Proofpoint Inc. (PFPT)


As hacks or data breaches seem to occur almost daily, the cyber security sector is receiving significant attention across the globe. When we focus on fundamentals and cut through the “sector theme” noise, we find some weak links in the cyber security industry. This week’s Danger Zone is one of those weak links.

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The Best and Worst of the Information Technology Sector


The Information Technology sector ranks second out of the 10 sectors as detailed in our 3Q15 Sector Ratings for ETFs and Mutual Funds report. It gets our Neutral rating.

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Secure Your Portfolio with a Leader in Cyber Security


Companies are investing record amounts to protect themselves from system breaches. Investors can profit from this trend by investing in a global leader in cyber security.

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Best Stocks in the Dow Jones Industrial Average


Last week, we wrote about the riskiest stocks in the Dow Jones Industrial Average. We thought we’d be remiss to not mention our favorite stocks in the index as well. Not all of the blue chips are created equal, and the following are what we consider to be the most attractive investment opportunities in the Dow at the moment.

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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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Excess Cash – Valuation Adjustment

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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

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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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