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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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Why I’m Bullish And We Are Not In a Bubble

I believe the US economy is undergoing a restructuring where we, as a society, are becoming radically more productive. I think that we are entering a new economic paradigm of productivity in both our corporate and labor markets. In this new paradigm, we achieve enough gains in productivity to offset the inflationary forces of QE.
by David Trainer, Founder & CEO
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Buy LRCX: More Value Than Meets the Eye

Most of my research and publishing tends to focus on companies manipulating accounting rules to make their reported earnings look better than the real economic cash flows of their business. It is unfortunately rare that I find a company whose economic earnings are outpacing the reported accounting results and whose stock is cheap. One such company is Lam Research (LRCX – very attractive rating). One of September’s most attractive stocks, LRCX offers investors hidden value.
by David Trainer, Founder & CEO
New Constructs
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Stock Pick of the Week: Buy Discover Financial Services (DFS)- Very Attractive Rating

HIDDEN GEMS: 1. Our dis­counted cash flow analy­sis shows that DFS’s cur­rent val­u­a­tion (stock price of $21.80) implies that the company’s prof­its will decline by 40% and never grow again. 2. Eco­nomic earn­ings are growing faster that reported accounting earnings. 3. Free cash flow of $2.8bn or 24% of its enterprise value during the last fiscal year.
by David Trainer, Founder & CEO