July 7, 20153Comments

Ignore the Hype: Splunk Remains Overvalued

In early 2012, Splunk Inc. burst onto the scene with one of the biggest IPOs of the year. Since then, the stock price has ridden the hype and is up more than 320%. This price increase should raise serious concerns for astute investors.

by Max Lee

June 19, 20154Comments

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.

by Kyle Guske II, Senior Investment Analyst, MBA

April 29, 20150Comments

Best Stocks in the Dow Jones Industrial Average

Last week, we wrote about the riskiest stocks in the Dow Jones Industrial Average. We thought we’d be remiss to not mention our favorite stocks in the index as well. Not all of the blue chips are created equal, and the following are what we consider to be the most attractive investment opportunities in the Dow at the moment.

by Kyle Guske II, Senior Investment Analyst, MBA

March 26, 20153Comments

Ranked: Our Top 10 ETFs

The following is a list of our top 10 ETFs that have over $100 million in assets under management (AUM), and that are not leveraged.

by Kyle Guske II, Senior Investment Analyst, MBA

February 10, 20150Comments

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.

by Kyle Guske II, Senior Investment Analyst, MBA

February 6, 20150Comments

The Best Large Cap Value Stocks in the Market

The Large Cap Value style ranks second out of the 12 styles for the first quarter of 2015 and receives our Neutral rating. The Large Cap Value style as a whole outperformed the Russell 3000 in 2014

by Kyle Guske II, Senior Investment Analyst, MBA

August 18, 20140Comments

Danger Zone: Price to Earnings Ratios

The vast majority of evidence suggests that P/E ratios are an unreliable way to measure the true value of stocks.

by David Trainer, Founder & CEO

June 17, 20140Comments

10 Wonderful Companies That Are Bad Stocks

Sometimes, a great company can actually be a risky stock when it gets significantly overvalued.

by David Trainer, Founder & CEO

January 22, 20140Comments

Apple’s Declining Advantage is Undeniable

Apple cannot have pricing power and market share at the same time. No one can for an extended period of time. The problem with AAPL is that it is priced for the company to achieve market share penetration and growth at high prices. The reality is that the quality of Apple products versus competitors is declining. Prices will have to come down just to maintain market share.

by David Trainer, Founder & CEO

December 16, 20130Comments

Danger Zone: Salesforce.com (CRM)

There are too many competitors out there for CRM to grow revenue and expand margins simultaneously to the extent that the market valuation already implies. Too much downside risk is in this stock.

by David Trainer, Founder & CEO

November 19, 20131Comments

Danger Zone 11/19/13: Netflix (NFLX)

Netflix (NFLX) is in the Danger Zone this week. The DVD subscription and streaming video service has changed the way people watch movies and TV shows. However, its current valuation is out of touch with reasonable expectations for future cash flows and profitability.

by David Trainer, Founder & CEO

September 30, 20130Comments

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.

by David Trainer, Founder & CEO

September 19, 20133Comments

Apple Stays Rotten

The “value” in Apple is an illusion. Astute investors need to look at Apple through the lens of what is a reasonable ROIC in the future.

by David Trainer, Founder & CEO

August 7, 20132Comments

Excess Cash – Invested Capital Adjustment

Most companies hold some cash—or cash equivalents in the form of investments—above this required amount. Companies hold excess cash in order to cushion against economic downturns, prepare for acquisitions, or any number of other reasons. Sometimes, past profits pile up on balance sheets and are a form of excess cash. Excess cash is not needed for the operations of a company. It is removed from our calculation of invested capital.

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

July 16, 20130Comments

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.

by David Trainer, Founder & CEO

June 28, 20131Comments

Employee Stock Option Costs and Goodwill Amortization – NOPAT Adjustment

NOPAT Adjustments for ESOs and Goodwill Amortization. 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.

by David Trainer, Founder & CEO

May 24, 20130Comments

How To Find the Best Style ETFs: May 2013

Finding the best ETFs is an increasingly difficult task in a world with so many to choose from. May 2013.

by David Trainer, Founder & CEO

May 23, 20132Comments

The Truth Behind AAPL’s Numbers

This article provides some empirical evidence behind my putting Apple (AAPL) in the Danger Zone last week because its return on invested capital (ROIC) is outrageously high. That fact underscores why valuing this company or any other with the expectation that such a high ROIC was sustainable would be a mistake.

by David Trainer, Founder & CEO

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