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.
David Trainer, Founder & CEO
MSFT
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
Rating Breakdown: Best & Worst ETFs & Mutual Funds by Sector (April 2013)
This report focuses on my top picks and pans for all sector funds for April 2013. I will follow this summary with a detailed report on each sector.
David Trainer, Founder & CEO
How To Avoid the Worst Style ETFs: March 2013
Picking from the multitude of style ETFs is a daunting task. We are here to make it simpler and smarter.
David Trainer, Founder & CEO
Best & Worst ETFs and Mutual Funds February 2013: Large-cap Blend Style
The large-cap blend style ranks first out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 33 ETFs and 944 mutual funds in the large-cap blend style as of February 1st, 2013.
David Trainer, Founder & CEO
Our Partner, Benzinga, Is Premier Financial News Provider on Windows 8
Our long-time partner, Benzinga.com, was selected by Microsoft (MSFT) to be one of the PREMIER financial news providers on Windows 8.
David Trainer, Founder & CEO
Best & Worst ETFs and Mutual Funds October 2012: All-cap Growth Style
The all-cap growth style ranks fifth out of the twelve fund styles as detailed in my style rankings for ETFs and mutual funds. It gets my Neutral rating, which is based on aggregation of ratings of two ETFs and 490 mutual funds in the all-cap growth style as of October 17, 2012.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
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
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
How To Find the Best ETFs
First, you need to determine the category or sector to which you want exposure.
Then, you determine which ETFs, within the category or sector you like, are the best …this can be the hard part.
David Trainer, Founder & CEO
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.
David Trainer, Founder & CEO
ETFs vs Mutual Funds: The Winner Is…
The radically higher number of US equity mutual funds (4,700+) versus ETFs (380+) is not indicative of better stock selection from active management. On the contrary, the vast majority of actively-managed funds do not justify the higher fees they charge. They do not, in terms of stock selection and expected returns, add value versus passively managed benchmarks.
David Trainer, Founder & CEO