December 2, 2011 – 10:18 am
David A. Geracioti, Editor-In-Chief of Registered Rep magazine, recently invited me for an interview on why economic earnings matter when selecting stocks, mutual funds and ETFs.
September 27, 2011 – 9:14 am
Most of my research and publishing tends to focus on companies manipulating accounting rules to make their reported earnings look better than the real economic cash flows of their business.
It is unfortunately rare that I find a company whose economic earnings are outpacing the reported accounting results and whose stock is cheap.
One such company is Lam Research (LRCX – very attractive rating). One of September’s most attractive stocks, LRCX offers investors hidden value.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged ETF predictive rating, excess cash, First Trust NASDAQ-100-Technology Sector Index Fund, Lam Research, LRCX, NOPAT, ProShares Ultra Semiconductors, QTEX, ROIC, USD, Very Attractive Rating
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September 13, 2011 – 11:36 am
It is only a matter of time before oil and gas stocks stop moving with the price of oil and start reflecting their underlying economics.
When this happens, Baker Hughes (BHI – “very dangerous” rating) will be among the stocks that fall the hardest.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged Baker Hughes, BHI, Energy Select Sector SPDR, First Trust Energy AlphaDEX Fund, FXN, high-low fallacy, IEZ, iShares Dow Jones U.S. Oil Equipment & Services Index Fund, P/E ratio, PowerShares Dynamic Oil Services, price/earnings multiple, PXJ, ROIC, Rydex S&P Equal Weight Energy ETF, RYE, SPDR S&P Oil & Gas Equip & Service, Very Dangerous Rating, XES, XLE
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The valuation of NUE’s stock implies the company will grow its after-tax cash flow (NOPAT) by nearly 20% compounded annually for 20 years.
PowerShares Buyback Achievers (PKW) is the #1 “most attractive” ETF out of the 375+ ETFs we ranked according to our predictive rating system.
By David Trainer
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Posted in ETF Research
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Also tagged HDV, Health Care Select Sector SPDR, iShares High Dividend Equity, KBWP, Most Attractive ETFs, Most Attractive Stocks, PKW, PMA, PowerShares Active Mega Cap, PowerShares Buyback Achievers, PowerShares KBW Prop & Casualty Insur, XLV
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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.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged BAC, Bank of America, C, Citigroup, Dangerous Rating, Financial Sector, Glass-Steagal Act, Goldman Sachs, GS, Henry Paulson, Inside Job movie, JP Morgan, JPM, Merrill Lynch, Morgan Stanley, MS, Robert Rubin
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The risk/reward of this stock is quite compelling. Downside risk is low as the valuation already implies a permanent 54% decline in profits. How much worse can the valuation get? Upside reward potential is strong as the stock has to go over $77/share to trade at a value that implies the company’s profits will experience a 0% decline, still a no-growth scenario.
January 18, 2011 – 8:25 am
HIDDEN GEMS:
1. Our discounted cash flow analysis shows that APOL’s current valuation (stock price of $42.31) implies that the company’s profits will decline by 60% and never grow again.
2. Economic earnings are higher than reported accounting earnings.
3. Excess cash of $1,201mm or about 20% of its market cap
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged APOL, Apollo Group Inc cl A, Career Education Corp, CECO, COCO, Corinthian Colleges Inc, dynamic discounted cash flow model, ESI, Invested Capital, ITT Educational Services Management Group, NOPAT, STRA, Strayer Education
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January 10, 2011 – 3:01 pm
January’s Most Attractive Stocks are now available.
Technology and Pharmaceutical stocks predominate compared to other sectors. One newcomer to the… Read more »
January 6, 2011 – 10:26 am
We went on record that investors should short SBUX on 11/6/2006 when the stock was close to $38 per share. Click here to see the Fortune Article. The stock did not look attractive to us until 2 years (11/18 – 11/20/08) later when it was under $8, and that for only about 3 days. And ever since we have had a Neutral or Dangerous Rating on the stock.