We think investors are not seeing the value in how this firm is leveraging technology to strengthen its deep competitive advantages over fintech start-ups.
As with all things in life, building a solid investment strategy around Free Cash Flow (FCF) is not as simple as it may seem. Here are 3 rules to follow.
The market underestimates the barriers to entry in this industry, and as a result, valuations for many of the companies imply profits will permanently decline.
Large incumbent financial firms will continue to control the bulk of the value in the industry, but the structure of the value chain and the way these firms compete will change drastically.
The Department of Labor’s fiduciary rule is under fire again. Essentially, those opposing the rule are saying that fulfilling a fiduciary standard—acting in the best interests of their clients—is too costly to work with their business model.
Red flags appear when a firm sacrifices profitability to join the cloud and transitions to a business model with negative margins. Add in significant competition and an overvalued stock price and investors should be running for the hills.
Clients are more educated than ever. There is more transparency into advisory practices than ever. It’s going to be awfully hard for advisors to win new business if they cannot tell clients they will act in the clients’ best interests.
We think investors’ expectation for the fiduciary standard is here to stay no matter what the official rules say -- and those investors will increasingly demand that their advisers apply to their non-retirement accounts too.
The Large Cap Blend style ranks first out of the twelve fund styles as detailed in our 3Q16 Style Ratings for ETFs and Mutual Funds report. It gets our Attractive rating.
The big banks still have significant advantages. Their brand names, financial capital, advisor networks, and large client bases give them the opportunity to leverage the innovations of startups and become the biggest winners in this new wealth management model.
Thesis: Management can boost the market value of American Express in the amounts below[1] by aligning the firm’s strategy and performance compensation with real cash flows or what we call return on invested capital (ROIC).
The All Cap Value style ranks fourth out of the twelve fund styles as detailed in our 1Q16 Style Ratings for ETFs and Mutual Funds report. It gets our Neutral rating.
Don’t get burned buying a stock without business operations that cannot support the dividend. Chasing yield could leave you holding the bag once dividends get cut and share prices fall. Find out how to avoid these traps in this week’s webinar “ How To Avoid Dividend Traps.”
In the search for safe investments in today’s volatile markets, investors should focus on companies that have a history of creating shareholder value, the ability to earn quality returns on capital, and an undervalued stock. This week’s Long Idea, Wells Fargo & Company (WFC) not only fits the description of a safe investment, but its shares are also greatly undervalued.