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“Most Attractive Stocks” Earn Top-Ranking Again

Monday, August 1st, 2011

In Barron’s 1st Half of 2011 Sur­vey: “Stum­bling To the Halfway Mark”, performance of our Most Attractive stocks won the #2 ranking over the prior 3 years.

This strong ranking over the medium to long-term underscores the value of the highly rigorous work we do for every stock and fund we cover. Focusing on reversing accounting distortions and discounted cash flow analysis after incorporating key data from the Financial Footnotes enables us to deliver research of unrivaled quality and accuracy.

Our ETF and mutual fund ratings are based on the same successful system used to identify the Most Attractive stocks. For more on our ETF and mutual fund research, click here. As detailed in Barron’s “The Danger Within“, investors need to know the quality of the stocks in any ETF or mutual fund BEFORE they invest.

New Constructs is the ONLY firm to provide investors with ETF and mutual fund research that is comparable in quality to stock research. In addition, no other firms (that I know of) can apply a successful stock rating system to ETFs and mutual funds.

I am confident we will continue to out-perform over the medium and long terms just as we have in the past. Note that we are not yet eligible for the 5yr ranking period. I am disappointed that we did not also rank well in the last six or 12 months, but my confidence in our approach to equity analysis is unwavering. One period of under-performance does not concern me. I prefer to focus on our improvement from 3rd place to 2nd place in the 3-yr contest despite an unusually low performance in the 1st half.

For more details on our uniquely rigorous approach to equity research click here and download reports highlighting some of the major adjustments we make to reported financials based on data we unearth from Financial Footnotes.

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  1. varadha says:

    Terrific, yet simple analysis. I’ve always been a fan of ROIC as a measure of capital efficiency and believe that no size/growth outperformance can replace the quest for efficiency.

    Sort of like a big gas guzzling v8 that needs ever increasing gallons of fuel to keep its engine running

  2. David says:

    But Angie’s $90 per user acquisition cost is going to go away. That’s what their approach probably is. How would their outlook be if that $90 cost dropped down to a total cost of $3 per user?

  3. David:

    That would be great, but cost per user acquisition is not something that’s very easy for a company to fix. ANGI can slash their marketing budget to the bone, but then they would stop acquiring new members. They would probably lose members in fact, as their membership renewal rate is at ~75% and declining. If they cut marketing expense by ~95% as you seem to be suggesting, ANGI might be able to eke out 1 year of slight profits, but they would start shedding members and losing money very quickly. ANGI’s only hope is to keep its marketing budget high and hope it can reach the scale and brand awareness to be able to sustain its business while scaling back marketing costs enough to turn a profit. The fact that ANGI’s revenue growth is slowing down even as its marketing costs keep increasing makes it very unlikely it will achieve that goal.

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