The noise trader influence is only growing, as the rise of self-directed traders and the relentless noise of the financial press mean the noise to signal ratio is worse than ever.
Sophisticated investors want metrics that go deeper than reported earnings so they can get a truer picture of cash flows and hold companies accountable for capital allocation.
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.
Last week, our analysts parsed 452 filings and collected 58,771 data points. In total, they made 9,978 adjustments with a dollar value of $1.5 trillion. Analyst Hunter Gray made a number of adjustments to Royal Dutch Shell’s (RDS.A) 20-F that caused us to downgrade the stock from Dangerous to Very Dangerous.
Analyst Cody Fincher made a total of 44 adjustments to Valeant’s financial statements with a total value of $50 billion. Here are our four largest takeaways from Valeant’s 10-K.
Our Danger Zone reports aim to identify those firms that, when looking below the surface, have struggling businesses and highly overvalued stock prices. However, the thesis does not always play out as we expect and, at times, the stock continues garnering investor interest and only grows more overvalued.
As 2016 comes to an end, we’d like to highlight some of New Constructs’ many accomplishments for this year. We’ve helped our partners and clients avoid stock blow-ups, find long ideas that soar and leverage Model Portfolios that outperform across the board.
Non-GAAP earnings are back in the crosshairs. 15 years after the Enron scandal first prompted the SEC to create rules for non-GAAP metrics, the proliferation of these pro forma results have led to renewed scrutiny.
Overpriced acquisitions are far from a new phenomenon, but they’ve been especially prevalent in recent months. As a result, we’ve gathered some ideas about the various reasons companies ignore the evidence and continue to overpay for acquisitions.
We’re not talking about Valeant (VRX) or Perrigo (PRGO), or any prior Danger Zone stocks. We’re talking about XPO Logistics (XPO), which looks like another roll up scheme, for the Danger Zone this week.
Over the weekend, Barron’s magazine featured our research for the fourth time in 2016 and 20th time since 2014. This time, Barron’s featured our research on Valeant Pharmaceuticals (VRX).
Norway’s Sovereign Wealth Fund announced that it is looking to restructure compensations plans at certain companies in its portfolio. As the fund looks for a company it can target, we offer a candidate: Lions Gate Entertainment (LGF).
There are some genuinely good examples of shareholder activism out there. In the right context, activist investors hold management accountable and play a beneficial role in the market by ensuring that poor corporate governance and strategy don’t persist.
We found that Perrigo Company (PRGO), the firm Mr. Papa is leaving behind, exhibits many similarities to Valeant, including misleading non-GAAP measurements, aggressive, shareholder destructive acquisitions, and executive compensation misaligned with shareholders’ interests.
We’ve been sounding the alarm on non-GAAP earnings for several years now. Companies exploited the wide leeway granted by the SEC to present their business in a more favorable light.
In this special report, we identify and provide specific examples of the red flags you should be on the lookout for when activist investors begin building a large position in a company.
In this webinar, David Trainer, a Wall Street veteran, will discuss corporate governance issues to be aware of, how they can affect an investors portfolio, and how they affect underlying stock prices.