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.
How To Avoid the Worst Style ETFs
Picking from the multitude of style ETFs is a daunting task. We are here to make it simpler and smarter.
Fox TV Interview: How To Make Money In This Market
Yesterday, on Fox Business’s After The Bell, I shared my market outlook and strategy for making money in the current market. Here is the interview.
Best & Worst Style ETFs & Mutual Funds
The best ETFs and mutual funds have high-quality holdings and low costs. As detailed in “A cheap fund is not always a good fund”, 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.
Roadmap to the Best & Worst ETF and Mutual Fund Styles
None of the fund styles earn a rating better than Neutral. The primary driver behind the Neutral-or-worse ratings is poor portfolio management. My style ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each style. Investors looking for style funds that hold high quality stocks should focus…
Microsoft (MSFT): Very Attractive Rating — for Ask Matt Readers
MSFT gets my best rating because the company’s ROIC, at 72%, ranks 8th in the S&P 500 while its stock price (~$31.52/share) implies the company’s profits will permanently decline by about 20%. High profitability and low valuation create excellent risk/reward in a stock. Here is my free report on MSFT.
Flaws In Traditional Fund Research Should Not Be Tolerated
Investors deserve truly independent research on funds. I show they are not getting it from Morningstar.