Time to Follow Tesla Executives and Run for the Hills?
More executive departures, more missed production projections, and competitors taking market share have left Tesla’s sky-high valuation with even more downside risk.
Doomsday Valuation Makes this Stock a Buy
Overblown concerns about balance sheet liabilities, macroeconomic headwinds, and technological disruption have the market projecting the company’s cash flows will be permanently cut in half, a scenario which seems unlikely.
Tax Reform Losers: Companies with Deferred Tax Assets
Most public companies should benefit from the new tax law but some of the biggest losers will be companies with large deferred tax assets (DTAs).
New Exec Comp Plan Means It’s Time to Short this Stock
Bold is one way to describe the new exec comp plan. We would call it foolhardy.
Tesla: Running Out of Energy? – Danger Zone
The escalating promises from Elon Musk are running out of credibility. Words alone cannot fix the fact that Tesla (TSLA) is quickly running out of cash, faces a strengthening competitive market and has extreme optimism baked into the current valuation of the stock.
Long Idea: Lear Corp (LEA)
Impressive profit growth and a valuation well below peers helped land Lear Corp on July’s Most Attractive Stocks list. Even better, aligning executive compensation with return on invested capital earns the stock a spot on July’s Linking Exec Comp to ROIC Model Portfolio.
3Q16 Sector Ratings For ETFs & Mutual Funds
At the beginning of the third quarter of 2016, no sectors earn an Attractive-or-better rating. Our sector ratings are based on the aggregation of our fund ratings for every ETF and mutual fund in each sector.
Long Idea: Nuveen Concentrated Core Fund (NCAFX)
This week’s Long Idea, Nuveen Concentrated Core Fund (NCAFX) justifies its fees through significantly better stock selection. In fact, NCAFX allocates heavily to stocks on June’s Most Attractive Stocks list.
Now Is The Time To Invest In This American Business
This week, we’ve found a company the market loves to hate in spite of its excellent operating results. With strong profit growth, prudent management decisions for future growth, and a greatly undervalued stock price, this week’s Long Idea is:
Add the Best Consumer Discretionary Stocks to Your Portfolio
The Consumer Discretionary sector ranks fourth out of the 10 sectors for the first quarter of 2015 and receives our Neutral rating. The Consumer Discretionary sector as a whole underperformed the S&P 500 in 2014, rising 9% to the S&P’s 12%.
Danger Zone: Make Sure You’re in These Two Stocks for 2015
Instead of our usual weekly sell/short call, we are going to open 2015 with two of our favorite stocks for the upcoming year. These stocks have strong growth potential in the coming year, and are attractively valued, trading below their economic book values.
10 New Stocks Added to Most Attractive List for December
Our Most Attractive Stocks (+1.1%) underperformed the S&P 500 (+2.2%) last month.
How to Avoid the Worst Sector Mutual Funds
Picking from the multitude of sector mutual funds is a daunting task.
Ford (F) is Hitting on All Cylinders
As long as Ford’s strong profit growth and market share gains continue, this stock has a lot of upside.
Consumer Discretionary Sector
The Consumer Discretionary sector ranks fourth 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 18 ETFs and 21 mutual funds in the Consumer Discretionary sector as of April 2, 2014.
NOPAT Adjustment: Foreign Exchange Loss
Converting GAAP data into economic earnings should be part of every investor’s diligence process. Performing detailed analysis of footnotes and the MD&A is part of fulfilling fiduciary responsibilities.
New Stocks Make Most Attractive/Dangerous Lists For March
Momentum chasing is never a good strategy. RCL significantly outperformed the market last year, while F lagged it slightly, but don’t expect those trends to continue in 2014 for either stock.
GM’s Long Range EV A Further Threat to Tesla
On Monday, GM announced their plan to develop an all-electric vehicle that could go 200 miles per charge, just like Tesla’s Model S. The catch? GM plans to sell their car for only $30,000, less than half of the $62,000 sticker price for the Model S.
Deferred Tax Assets and Liabilities – Invested Capital Adjustment
DTAs artificially raise reported assets and do not help generate operating profit while DTLs are like a source of interest-free financing. We remove the impact of DTAs and DTLs from our calculation of invested capital to ensure the more accurate measure of a firm’s return on invested capital (ROIC).
Asset Write-Downs – Invested Capital Adjustment
For debt investors, which GAAP was primarily designed for, write-downs are analytically helpful. They provide a more accurate assessment of the liquidation value of a company’s assets. For equity investors, on the other hand, write-downs are not helpful because they distort the return on invested capital (ROIC) of a company.