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MSFT up 8.3% – former Stock Pick of Week on Oct 28

Friday, October 29th, 2010 MSFT up 8.3% – former Stock Pick of Week on Oct 28

MSFT released better than expected earnings and is up 8.3% since it was named the Stock Pick of the Week on October 28, 2010. Overt the same time period, the S&P 500 is up only 3.6%.

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Red Flag Report: Alternative Fuel Mixture Credit (AFMC) Windfall

Thursday, October 28th, 2010 Burning Match

The second report in our Red Flag series focuses on a little-known earnings Windfall in the Paper and Products Industry. This report is another example of the deep analysis New Constructs performs on all 3000+ companies under coverage. Our expertise is in navigating poor and confusing disclosure in the Financial Footnotes to find the truth about corporate profitability and valuation.

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Wall Street’s Secret Plans To Continue Raiding the Capital Markets

Wednesday, October 27th, 2010 Wall Street’s Secret Plans To Continue Raiding the Capital Markets

In another excellent expose “Wall Street Proprietary Trading Under Cover”, Michael Lewis exposes Wall Street’s plan to exploit loopholes in the laws and regs to continue proprietary trading, the activity that was the primary downfall of Bear Stearns and Lehman Brothers.

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Stock Pick of the Week: Buy Bristol Myers Squibb Co (BMY) – Very Attractive Rating

Tuesday, October 26th, 2010 Stock Pick of the Week: Buy Bristol Myers Squibb Co (BMY) – Very Attractive Rating

HIDDEN GEMS:
1. Our dis­counted cash flow analy­sis shows that BMY’s cur­rent val­u­a­tion (stock price of $27.16) implies that the company’s prof­its will decline by 35% and never grow again.
2. The com­pany grew its eco­nomic earn­ings by $307.5mm (12% increase) dur­ing its last fis­cal year.
3. The com­pany has $9,507mm in Excess Cash, which we remove from our Invested Cap­i­tal cal­cu­la­tion. $9,507mm mil­lion is more than 20% of BMY’s market cap.

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Apple Inc (AAPL) — Attractive Rating — for Ask Matt Readers

Wednesday, October 20th, 2010 Apple Inc (AAPL) — Attractive Rating — for Ask Matt Readers

HIDDEN GEM: AAPL’s economic earnings rose more than its accounting earnings during the last fiscal year. Economic earnings rose by $3,576 while accounting earnings rose by $2,401. And the company has $31,849mm in Excess Cash, a reflec­tion of the strong prof­itabil­ity of the busi­ness.

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New Special Red Flag Report on Off-Balance Sheet Debt

Wednesday, October 20th, 2010 Danger

The first in a series of upcoming reports on Red Flags and Hidden Gems, we published our Red Flag Report on Off-Balance Sheet Debt. This report delivers:
1. Measurement of the impact of the operating lease accounting loophole on the entire stock market and all 3000 companies we cover.
2. Explanation of exactly how the off-balance sheet debt from operating leases affect economic earnings.

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Stock Pick of the Week: Sell/Short CB Richard Ellis Group, Inc. (CBG) — Very Dangerous Rating

Tuesday, October 19th, 2010 Stock Pick of the Week: Sell/Short CB Richard Ellis Group, Inc. (CBG) — Very Dangerous Rating

RED FLAGS:
Mis­lead­ing Earn­ings: CBG reported a $1,045mm increase in GAAP earn­ings while our model shows eco­nomic earn­ings declined by $358mm.
Very Dan­ger­ous Val­u­a­tion: Stock price of $19.06 implies CBG must grow its NOPAT at 20% com­pounded annu­ally for 15 years. Has any company ever done that, much less a commercial real estate company?

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Proof Is In Our Performance thru 3Q10

Monday, October 18th, 2010 Proof Is In Our Performance thru 3Q10

There are many ways to define the qual­ity and merit of equity research. One mea­sure stands tallest: per­for­mance of stock rec­om­men­da­tions. And by that mea­sure, New Con­structs’ research is of very high qual­ity (espe­cially for the price!!).

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Google Inc Cl A (GOOG) – Attractive Rating – for Ask Matt Readers

Friday, October 15th, 2010 Google Inc Cl A (GOOG) – Attractive Rating – for Ask Matt Readers

HIDDEN GEM: GOOG has over $24,100mm in Excess Cash, a reflection of the profitability of the business and a 64% deduction to Reported Net Assets for our Invested Cap­i­tal calculation.

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Seagate Technology PLC (STX) – Up over 15% Today – one the Most Attractive Stocks for October

Friday, October 15th, 2010 Seagate Technology PLC (STX) – Up over 15% Today – one the Most Attractive Stocks for October

One of October’s Most Attractive Stocks, Seagate Technology PLC (ticker – STX) is up over 15% today. STX was added to our list of Most Attractive Stocks in September, shortly after we reviewed the company’s latest 10K and found HIDDEN GEMS.

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Private Sector to the Rescue Part 1: The Google Price Index and Better Markets, Inc.

Thursday, October 14th, 2010 dreamstimefree_310726_upGraph

At a time when most of the public believes political leadership to be weak, we should not focus on finding scapegoats but rather on assuming accountability to help fix problems.

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Wall Street Compensation Does Not Lie

Thursday, October 14th, 2010 Wall Street Compensation Does Not Lie

For anyone who questions whether or not the rules of the game are controlled by those wuith the most money not the most ability, look no farther than Wall Street’s compensation.

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Proof Is In Performance Thru 3Q10 for Most Attractive and Most Dangerous Stocks

Wednesday, October 13th, 2010 Proof Is In Performance Thru 3Q10 for Most Attractive and Most Dangerous Stocks

The performance of the Most Attractive and Most Dangerous Stocks continues to beat relevant benchmarks by a wide margin. Our Long/Short strategy returns 80.5% from April, 2006 through September, 2010, beating the S&P 500 by 91%, the Russell 2000 by 89.9% and the risk-free rate by 70.2%. All the details are in the report.

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Stock Pick of the Week: Buy Schiff Nutrition Intl (WNI) — Very Attractive Rating – Small Cap Special

Tuesday, October 12th, 2010 Stock Pick of the Week: Buy Schiff Nutrition Intl (WNI) — Very Attractive Rating – Small Cap Special

HIDDEN GEMS:
1. Our dis­counted cash flow analy­sis shows that WNI’s cur­rent val­u­a­tion (stock price of $7.89) implies that the company’s prof­its will decline by 25% and never grow again.
2. The com­pany grew its economic earnings more than its reported earnings. Economic earnings rose by $9.1mm (506% increase) while Net Income rose by only $8.1mm (79% increase) during its last fiscal year.
3. The com­pany has $42mm in Excess Cash, which we remove from our Invested Cap­i­tal cal­cu­la­tion. $42 mil­lion is 20% of WNI’s mar­ket cap.

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Interview with Marketwatch’s Chuck Jaffe

Monday, October 11th, 2010 Interview with Marketwatch’s Chuck Jaffe

I explain why our research is so effective at picking stocks. I also speak specifically about these stocks: WMT, JNJ, PEP, GS, RAX, S and WFMI.

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Nashville Post on New Constructs w/ Our Ratings on 23 TN Stocks

Thursday, October 7th, 2010 Nashville Post on New Constructs w/ Our Ratings on 23 TN Stocks

Drew Ruble of the Nashville Post recently wrote a nice article on New Constructs.

In addition to profiling our unique analytical approach, he highlights our ratings on 23 Tennessee stocks.
Drew Ruble of the Nashville Post recently wrote a nice article on New Constructs.

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Rite Aid Corp (RAD) — Dangerous Rating, free report for Ask Matt Readerss

Thursday, October 7th, 2010 Rite Aid Corp (RAD) — Dangerous Rating, free report for Ask Matt Readerss

Rite Aid Corp (RAD) gets a Dan­ger­ous Rat­ing because of these RED FLAGs:

1. Very Expen­sive val­u­a­tion: cur­rent stock price implies the com­pany will grow revenues and NOPAT at 6% com­pounded annu­ally for the next 15 years while also more than doubling ROIC from 6.1% to 13.7% within the same time frame.
2. Off Balance-Sheet debt: of $5,502mm or 93% of “Reported” Net Assets
3. Asset-write-offs: $3,417mm or 58% of “Reported” Net Assets

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Apologies for formatting issues – we will be back soon

Wednesday, October 6th, 2010 Apologies for formatting issues – we will be back soon

I apologize for the formatting problems with the blog. We are working on getting it fixed as quickly as we can. All of the content is still here – just a little harder to find.
Thank you for your patience.

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Stock Pick of the Week: Sell/Short Vulcan Materials Co. (VMC) – Very Dangerous Rating

Tuesday, October 5th, 2010 Stock Pick of the Week: Sell/Short Vulcan Materials Co. (VMC) – Very Dangerous Rating

Main RED FLAG:
Very Dangerous Valuation: The current stock price of $36.89 implies VMC must grow its NOPAT at 12% com­pounded annu­ally for 40 years.
The market has set expectations very high for this stock – leaving little upside potential and lots of downside risk, especially when considering the company’s Misleading Earnings.

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Buy MSFT: Goldman Downgrade Presents Opportunity

Monday, October 4th, 2010 Buy MSFT: Goldman Downgrade Presents Opportunity

We reiterate our pick for last week’s Stock Pick of the Week: Buy Microsoft Corp (MSFT) — Very Attractive Rating. We consider the recent downgrade from Goldman an investment-banking driven head fake. Because MSFT is not a good investment banking client (very little merger or stock offering activity), investment banks have little to lose by downgrading or putting a sell rating on the this stock.

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