A top Wall Street bank analyst says our analysis is superior.
Key quotes about our “VBA” analysis:
Better valuation models:
- “New Constructs leverages Robo-Analyst technology to gather all of the data needed to accurately calculate return on invested capital across most US companies and some international companies, which allows for analysis within and across various sectors. The result is a valuation model that yields superior results relative to many other methods that ignore accounting footnotes.” – Page 5, 1st para.
- “The process helps reverse overstated earnings and understated capital. This is based on a unique data set provided to us by New Constructs. VBA matters. VBA explains far more value than a traditional price-to-book regression by industry…” – Page 2, 1st para.
An improvement over traditional metrics:
- “Value Based Analysis (VBA) [New Constructs’ Research or Robo-Analyst] improves the traditional ROE to price-to-book analysis by translating accounting value to estimated economic value.” – Page 1, first bullet
- “VBA adjusts ROE by standardizing accounting across the S&P 500 to estimate return on invested capital (ROIC). It helps. The r-squared between ROIC and adjusted price-to-book value is far better than under the traditional ROE to price-to-book value approach…” – Page 1, second bullet
A more comparable dataset across industries:
- “In order to level the playing field across industries, the New Constructs’ model makes several key adjustments.” – Page 5, 1st para.
- “New Constructs provides a unique data set that allows a level playing field by eliminating these accounting differences.” – Page 5, 3rd para.