This firm has effectively taken market share from competition while improving its profitability. Add a shareholder-friendly executive compensation plan, and we believe the firm will continue to outperform.
It’s time to consider a new paradigm for interest rates – a paradigm where treasury rates remain ultra low and riskier investments are priced by a decentralized market instead of a central bank.
This week’s Danger Zone pick, Zillow Group (ZG), sounds multiple alarms: unusually misleading non-GAAP earnings, overvalued stock, and broken business model.
The market awards the most value to the companies that give the most back. It punishes those that do not create value. Figure 1 shows how well our Danger Zone picks have done.
The Consumer Discretionary sector ranks fourth out of the 10 sectors as detailed in our 4Q15 Sector Ratings for ETFs and Mutual Funds report. It gets our Neutral rating
As the exuberance lifting all stocks has waned, this stock has already come under pressure, and we believe it has much further to fall as EPS management cannot mask the lack of real cash flows much longer. KB Home (KBH) is in the Danger Zone this week.