February 25, 20192Comments

Danger Zone: Finding Danger in the Footnotes

From the first week and a half of filing season, we’re highlighting two of the firms with economic earnings going the opposite direction of reported profits.

by Kyle Guske II, Senior Investment Analyst, MBA

February 25, 20190Comments

Podcast: How Analyzing 10-Ks Landed These Stocks in the Danger Zone

CEO David Trainer sat down with Chuck Jaffe of Money Life to talk about our Danger Zone pick this week: Danger Zone: Finding Danger in the Footnotes.

by Kyle Guske II, Senior Investment Analyst, MBA

February 22, 20190Comments

ICYMI: New Long Ideas, Finding Gold in Footnotes, IBKR Webinar Signup, Real Vision Interview & Model Portfolio Updates

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

by Kyle Guske II, Senior Investment Analyst, MBA

February 19, 20190Comments

The Real Earnings Season Starts Now: Finding Gold in Footnotes

Corporate earnings season may be winding down, but the real earnings season – annual 10-K filing season – starts today.

by Sam McBride

February 21, 20180Comments

The Real Earnings Season Starts Now

Corporate earnings season may be winding down, but the real earnings season – annual 10-K filing season – starts today.

by Sam McBride

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

April 19, 20170Comments

10-K Filing Season Recap

During filing season, our robo-analyst technology read through 2,139 10-K (or international equivalent) filings and collected 49,862 data points. Our analyst team used this data to make 49,862 adjustments with a dollar value of $16.1 trillion.

by Sam McBride

February 28, 20170Comments

Filing Season Finds: Tuesday, February 28

Yesterday, our analysts parsed 125 filings and collected 17,650 data points. In total, they made 2,921 adjustments with a dollar value of $599 billion. In particular, analyst Allen L. Jackson found an unusual item yesterday in Allegheny Technologies (ATI) 10-K.

by Sam McBride

January 12, 20150Comments

Danger Zone: Investors Who Ignore the Footnotes in 2015

Investors who aren't paying attention to the information disclosed in companies' financial footnotes are increasingly in danger of losing some of their investment.

by Andre Rouillard

September 2, 20140Comments

Why Footnotes Matter

Hidden items lurking in the financial footnotes can dramatically impact a company's yearly profitability.

by Andre Rouillard

August 22, 20130Comments

Enterprise Value – Definition and calculation

The theoretical value of Enterprise Value is the total takeover value of the firm. And if that is the case, then all claims on cash flows need to be included. We go the extra mile with our diligence to ensure all claims are captured in our Enterprise Value formula.

by David Trainer, Founder & CEO

July 22, 20130Comments

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.

by David Trainer, Founder & CEO

June 12, 20132Comments

Non-Operating Expenses Hidden in Operating Earnings – NOPAT Adjustment

Non-operating expenses are unusual charges that don’t appear on the income statement because they are bundled in other line items. Without careful footnotes research, investors would never know that these non-recurring expenses distort GAAP numbers by lowering operating earnings.

by David Trainer, Founder & CEO

November 2, 20110Comments

MF Global Was a Dangerous-rated Stock

New Constructs rated MF Global (MF) a Dangerous stock long before it blew up.

by David Trainer, Founder & CEO

March 29, 20111Comments

Accounting Is Fishy at the Zumiez (ZUMZ) Surf Shop

2010 earnings for the retail apparel sector have been quite strong, especially compared to 2009. However, looking behind the window dressing of reported earnings, we find that not all earnings are made the same. Zumiez Inc. (ZUMZ), retailer of cool, new action apparel turned to an old accounting trick to boost its 2010 earnings by 13%

by David Trainer, Founder & CEO

August 19, 20100Comments

Sandridge Energy (SD) – Free Report, for Ask Matt Readers, Highlighting a Major Red Flag in the Footnotes

Here is our free report on Sandridge Energy for Ask Matt readers. Our analysis of the Financial Footnotes reveals a major RED FLAG: the company has written off over $3.4bn in assets in just the last two years.

by David Trainer, Founder & CEO

August 5, 201018Comments

Economic Versus Accounting Earnings

Accounting data was not designed for equity investors, but for debt investors. "Earnings, earnings per share and earnings growth are misleading measures of corporate performance."(from page 66 in The Quest For Value by Bennett Stewart, Harper Collins 1991.)

by David Trainer, Founder & CEO

July 22, 20102Comments

New Constructs Receives Patent on Research System

The United States Patent and Trademark Office awarded us patent #7,752,090, titled: System and Method For Reversing Accounting Distortions and Calculating A True Value of a Business.

by David Trainer, Founder & CEO

July 19, 20102Comments

Greatest Hits: New Constructs media highlights

New Constructs has a strong reputation on Wall Street and with individual investors. We have been recognized for our analytical rigor (options, hidden debt, write-offs, red flags) as well as the stock-picking benefits of our hard work and analysis.

by David Trainer, Founder & CEO

May 13, 201010Comments

Finance 101

Finance is the process for making accounting data useful. Per Accounting 101: accounting data by itself is not useful. Think of accounting data as the words used in the language of Finance. Just as with any language, words can be arranged to convey almost any meaning.

by David Trainer, Founder & CEO

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