This David Stands Little Chance Against Industry Goliaths
As the market matures and competition firmly establishes itself, this firm’s lack of resources and highly negative margins create an uphill battle.
AI Has a Big (Data) Problem (3 of 5)
We are awash in an ocean of data that grows bigger by the second. And it’s a complete and utter mess.
The Market Doesn’t Appreciate This Tech Company’s Growth
Strong profit growth and a cheap valuation earn this stock a spot in January’s Most Attractive Stocks List and make it this week’s Long Idea.
No Recipe for Success: Low Margins in a Competitive Industry
This stock’s valuation has not adjusted to reflect new competitive pressures or the rapidly deteriorating fundamentals.
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. This report highlights investment ideas based on insights our research technology automatically provides on a firm’s true return on invested capital (ROIC) and economic earnings.
Why Suitors Are Leaving Twitter at the Altar – Danger Zone
Today’s news that Alphabet, Apple, and Disney are unlikely to bid for Twitter should come as no surprise. We think these companies (and many investors) are doing the same work we have done and simply cannot stomach paying anywhere close to Twitter’s current price.
Microsoft Vastly Overpays For LinkedIn
Our models show that, even with the most optimistic forecasts, over $20 billion, or $2.60 per MSFT share, of the $26.2 billion purchase is an overpayment and a direct destruction of value for MSFT shareholders.
Danger Zone: Blackbaud Inc. (BLKB)
Our call on Valeant (VRX) showed how dangerous it is to trust non-GAAP earnings because they cannot be used to cover true cash costs. For these reasons and more, Blackbaud Inc. (BLKB) lands in the Danger Zone this week.
Open Letter to Larry Ellison: How To Boost Oracle’s Value By $65 Billion
Thesis: Management can boost the market value of ORCL in the amounts provided by aligning the firm’s strategy and performance compensation with real cash flows or what we call return on invested capital.
Danger Zone: Qlik Technologies (QLIK)
Despite deteriorating margins, lack of competitive advantage, and a sky-high valuation, Qlik Technologies (QLIK: $31/share) is up nearly 33% over the past two years and finds itself in the Danger Zone this week.
Danger Zone: Proofpoint Inc. (PFPT)
As hacks or data breaches seem to occur almost daily, the cyber security sector is receiving significant attention across the globe. When we focus on fundamentals and cut through the “sector theme” noise, we find some weak links in the cyber security industry. This week’s Danger Zone is one of those weak links.
Danger Zone: Marketo (MKTO)
This week we’ve identified another highflying cloud company that exhibits many of the problematic traits we saw in DWRE and SPLK. Revenue growth can only support a stock for so long and this week’s Danger Zone stock, Marketo (MKTO) has plenty of room to fall.
3Q15 Style Ratings for ETFs & Mutual Funds
At the beginning of the third quarter of 2015, only the Large Cap Value and Large Cap Blend styles earn an Attractive-or-better rating. Our style ratings are based on the aggregation of our fund ratings for every ETF and mutual fund in each style.
Get This Cash Cow at a Discount
Strong business fundamentals and low valuations are key ingredients in the overall evaluation of investments. This week’s stock pick of the week brings high profitability and a compelling valuation to the table.
A Turnaround Years in the Making
This week’s hot stock has almost been written off by many market pundits. As commonly happens, media coverage tends to overreact to bad news, and those reactions can begin to drown out any positive news.
Do Microsoft Bulls Have A Convincing Case?
MSFT currently earns our Neutral rating, but if new CEO Satya Nadella can halt the company’s declining return on invested capital (ROIC), the stock’s valuation is cheap enough to make it intriguing.
Danger Zone 9/30/13: Zynga (ZNGA)
The stock has been beat up since its much-hyped IPO in 2011, but even after losing 61% of its value the stock is still too expensive. ZNGA is competing in an immature market where the barriers to entry are almost nonexistent and brand loyalty is a foreign concept.
Rating Breakdown: Best & Worst ETFs & Mutual Funds by Style
This report identifies the “best” ETFs and mutual funds based on the quality of their holdings and their costs. As detailed in “Low-Cost Funds Dupe Investors”, there are few funds that have both good holdings and low costs. While there are lots of cheap funds, there are very few with high-quality holdings.
How To Find the Best Style ETFs
Finding the best ETFs is an increasingly difficult task in a world with so many to choose from.
Danger Zone 5/13/2013: Apple Inc. (AAPL)
Too many investors are looking at AAPL through the rear view mirror and assume that its sky-high profits and return on invested capital (ROIC) are sustainable. As I detail in my CNBC interview, Apple is not cheap and investors should not underestimate the impact of losing Steve Jobs.