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What We’re Reading This Morning — August 21, 2014

Thursday, August 21st, 2014 512px-Ackerman_farmer

What can the health care sector offer investors as the market heads into uncharted territory? And other morning reads.

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How To Avoid the Worst Sector ETFs

Friday, May 2nd, 2014 BW-Final2

Picking from the multitude of sector ETFs is a daunting task.

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Danger Zone: Momentum Investors and the Financial Sector

Tuesday, November 26th, 2013 DZ_Fig1

As regulators dole out punishments that fit the crimes, they are finally closing many of the illegal trading loopholes that have driven so much of Wall Street profits over the past decade.

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Deferred Tax Assets and Liabilities – Invested Capital Adjustment

Friday, August 2nd, 2013 dtaal1

DTAs artificially raise reported assets and do not help generate operating profit while DTLs are like a source of interest-free financing. We remove the impact of DTAs and DTLs from our calculation of invested capital to ensure the more accurate measure of a firm’s return on invested capital (ROIC).

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Best & Worst ETFs and Mutual Funds: Large-cap Value Style

Tuesday, May 7th, 2013 LCVT3

The Large-cap Value style ranks second out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 41 ETFs and 772 mutual funds in the Large-cap Value style as of May 1, 2013.

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How To Find the Best Sector ETFs

Friday, November 30th, 2012 BestSectorETFs

Finding the best ETFs is an increasingly difficult task in a world where a new ETF seems to be born every 10 seconds.

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Citigroup (C) and Bank Of America (BAC) Dropped from Most Dangerous List

Tuesday, August 14th, 2012 BAC_fig

For the first time in many months, both Citigroup (C) and Bank Of America (BAC) are not on our Most Dangerous Stocks list as of the release of the August report.

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Bank Of America (BAC): Very Dangerous Rating — for Ask Matt Readers

Wednesday, March 14th, 2012 Bank Of America (BAC): Very Dangerous Rating — for Ask Matt Readers

Bank Of America (BAC) gets our Very Dangerous rating because it has misleading earnings and a very expensive valuation. Here is my free report on BAC.

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The Most Dangerous ETFs For March

Tuesday, March 13th, 2012 MD_ETFsv3

My ratings on ETFs are unique because they are based on my stock ratings for each of a fund’s holdings.
Ergo, the “Most Dangerous” ETFs allocate the most capital to stocks on March’s Most Dangerous Stocks list, which is available for non-subscribers as of today. There are 40 stocks on the Most Dangerous list every month.

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Matt Taibbi of Rolling Stone References My Article on BAC’s New Fees

Thursday, March 8th, 2012 Matt Taibbi of Rolling Stone References My Article on BAC’s New Fees

Always flattered when a journalist, especially one as famous and respected at Mr. Taibbi, references my work. His article “Bank of America In Trouble?” incorporated the meat of my “Raising Fees Is A Desperate Measure: Sell BAC” article.

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Sell BAC: Management Is Running Out of Gimmicks

Monday, March 5th, 2012 sellBACfigure2

Year to date, Bank Of America (BAC) stock is up nearly 45% compared to the S&P at +about 8%. BAC stock has bounced back nicely after dropping precipitously at the end of last year.
I would call the 45% bounce a “dead cat” bounce because I expect the stock to fall right back to $5/share, where it bottomed last Thanksgiving, or lower.

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Raising Fees Is A Desperate Measure: Sell BAC

Thursday, March 1st, 2012 Raising Fees Is A Desperate Measure: Sell BAC

Recent news that Bank Of America (BAC) is considering jacking up its fees on basic checking accounts suggests the company is bad shape. As I wrote yesterday, I believe BAC stock is headed back to its lows and today’s news confirms my view that the expectations basked into the stock’s valuation are writing checks that the company cannot cash.

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Wall $treet Week Returns: New Constructs’ Unique Research and Very Attractive Rating for AAPL

Thursday, March 1st, 2012 Wall $treet Week Returns: New Constructs’ Unique Research and Very Attractive Rating for AAPL

My interview with Wall $treet Week focuses on the uniquely rigorous research of New Constructs and three of our top stock picks.

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Forensic Accounting Says Avoid Energy & Financial Stocks

Tuesday, November 15th, 2011 Figure1

As one financial scandal follows another, it seems the good guys are having a tougher time catching the bad guys. Recent revelations about MF Global’s ponzi scheme are another reminder of how our regulatory and oversight systems seem to let whales pass through their net.

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ETF Shoppers: Accounting Trickery At Its Worst In Financial Sector

Tuesday, October 18th, 2011 Figure2

There are 25 financial sector ETFs. Per Figure 1, these 25 ETFs have drastically different stock holdings and, therefore, allocations. The lowest number of holdings is 24 while the highest is 496.
For starters, investors interested in the financial sector cannot expect many good investment options given that the sector gets my “dangerous” rating and ranks ninth out of the ten sectors that make up the economy. Details are in our sector roadmap report.

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Should Directors Ignore Those One-Time Items?

Wednesday, September 7th, 2011 Should Directors Ignore Those One-Time Items?

I do not think so. The question, however, is not so much about what directors ignore. You cannot ignore something about which you are unaware.
The real issue is that most directors and investors are simply unaware of the many one-time items because they are buried deep in the annals of footnotes in annual reports or 10-K filings.

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Sell Morgan Stanley Before It Sells You Down the River

Tuesday, May 3rd, 2011 SellMorganStanleyFigure1

When Morgan Stanley (MS) started in 1935, there were around fifteen employees. For 2010, the company reported 62,542 employees. Bigger is not always better. And for big, publicly-traded companies, big tends to be worse especially when it comes to financial reporting.

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The Leak on WikiLeaks – Regulators Knew About Risks That Led to Financial Fallout

Thursday, December 2nd, 2010 The Leak on WikiLeaks – Regulators Knew About Risks That Led to Financial Fallout

While I cannot predict what WikiLeaks will leak about some major banks, I have a hunch that one of the revelations might be from a special New Constructs report provided to the Senate Banking Committee’s Subcommittee on Securities, Insurance, and Investment.

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