WACC plays a key role in our economic earnings calculation. It is hard to be 100% certain about the exact cost of a company’s capital. Our guiding principle when calculating WACC is that it is better to be vaguely right than precisely wrong.
For the first quarter of 2014, only three sectors manage to even earn a Neutral rating. My sector ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each sector.
When a company makes an acquisition, the entire purchase price is added to the company’s balance sheet in the year of the acquisition along with any assumed debts or other long-term liabilities. However, the only income added to the income statement is that which occurs after the acquisition closes. In other words, the balance sheet is charged with the full price of the acquisition while the income statement only gets partially impacted.
he Utilities sector ranks ninth out of the ten sectors as detailed in my Sector Rankings for ETFs and Mutual Funds report. It gets my Dangerous rating, which is based on aggregation of ratings of 8 ETFs and 33 mutual funds in the Utilities sector as of July 10, 2013.
Picking from the multitude of style mutual funds is a daunting task. There are as many as 1,019 in any given style and at least 6,130 mutual funds across all styles.