May 9, 20180Comments

Can the Market Grow Into its Valuation?

The good news is that the market’s valuation remains well below its pre-2008 levels. Barring any major negative news (e.g. an oil crisis), we expect to see a relatively flat...

by Sam McBride

April 4, 20182Comments

ISS Buying EVA Dimensions Signals More Focus on Fundamental Research

Sophisticated investors want metrics that go deeper than reported earnings so they can get a truer picture of cash flows and hold companies accountable for capital allocation.

by Sam McBride

March 21, 20180Comments

Understated Earnings Create Opportunity in These Stocks

We found five stocks with rising economic earnings that the market might have overlooked due to declining GAAP earnings.

by Kyle Guske II

March 2, 20180Comments

ICYMI: New Long Idea, Barron’s Feature, Harvard B-School Feature, More Red Flags from New 10-Ks, Position Updates & Warning on ‘Earnings’ Season

Here's what happened at New Constructs this past week.

by Kyle Guske II

January 11, 20182Comments

Only One Sector Has Experienced A True Earnings Recovery

Accounting earnings may have rebounded from 2015 lows, but economic earnings—which reverse accounting distortions and account for the weighted average cost of capital...

by Sam McBride

October 12, 20170Comments

Invested Capital Turns: Explanation and Examples

Invested capital turns are an important consideration in the analysis of return on invested capital (ROIC) and a key measure of balance sheet efficiency.

by Kyle Guske II

September 19, 20170Comments

New Stocks in September’s Exec Comp Aligned with ROIC Model Portfolio

The best performing stock in last month's portfolio was Children's Place (PLCE) which was up 15%. Get a free look at a new stock in September's Model Portfolio.

by Kyle Guske II

September 18, 20170Comments

Taking GAAP Earnings at Face Value Puts Investors at Risk

The more investors understand about how GAAP net income omits valuable information, the better equipped they are to find truly hidden gems, or those companies with growing...

by Kyle Guske II

September 14, 20170Comments

Alpha-generating Forensic Accounting Examples

New Constructs’ proprietary forensic accounting research empowers investors to identify alpha-generating investment ideas more efficiently than traditional manual approaches....

by Kyle Guske II

September 7, 20170Comments

The Earnings Recovery Remains an Illusion

Our analysis of the latest 10-K and 10-Q filings for the S&P 500 shows that the GAAP earnings growth in the market has not translated to an increase in economic earnings.

by Sam McBride

June 27, 20170Comments

Value Investing Is Not Dead, But It Is Harder

We think today’s market is the best in many years for value investors, the real value investors, that is. The real value investors analyze footnotes and balance sheets in...

by Sam McBride

May 12, 20170Comments

Webinar: “New Age” Analysis – Equity and Fixed Income Research Synergies

Looking for forensic accounting diligence in footnotes and other disclosures to improve risk management? Get answers to this topic and more from New Constructs and Viola Risk...

by Kyle Guske II

May 4, 20172Comments

The Earnings Recovery Is A Sham

Our analysis of the latest 10-K filings for the 2,600 largest and most actively-traded companies shows that the much-hyped end to the earnings recession is an accounting illusion.

by Sam McBride

February 22, 20170Comments

Filing Season Finds: Wednesday, February 22

Yesterday, our analysts parsed 56 filings and collected 7,941 data points. In total, they made 1,335 adjustments with a dollar value of $351 billion. In particular, analyst...

by Sam McBride

October 13, 20160Comments

“This is the earnings metric stock-market investors should focus on”

On Wednesday ( 10/12/16) our op-ed article was published at Marketwatch. The article explains why investors need to look past common metrics such as EPS or non-GAAP earnings

by Kyle Guske II

September 26, 20162Comments

Danger Zone: Zoe’s Kitchen (ZOES)

Declining economic earnings, weak competitive position, and an overvalued stock land Zoe’s Kitchen (ZOES) in the Danger Zone this week.

by Kyle Guske II

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,...

by Kyle Guske II

June 13, 20160Comments

Danger Zone: Interactive Intelligence (ININ)

But what happens when a once profitable company makes the transition to the cloud and has become largely unprofitable? That company, Interactive Intelligence (ININ) is in the...

by Kyle Guske II

April 28, 20160Comments

The SEC Is Starting To Worry About Non-GAAP Earnings

We’ve been sounding the alarm on non-GAAP earnings for several years now. Companies exploited the wide leeway granted by the SEC to present their business in a more favorable...

by Sam McBride

April 12, 20160Comments

Economic Earnings: Explanation & Examples

To derive economic earnings, 30+ adjustments must be made to accounting earnings. These adjustments remove items hidden in the footnotes and MD&A of annual filings and close...

by Kyle Guske II

« Older Articles