Sign Up For The Next New Constructs Webinar






Navigation

Diligence Institute

Highlights From New Constructs Investment Research

Citigroup — free report for Ask Matt, Dangerous Rating

Citigroup — free report for Ask Matt, Dangerous Rating

Dangerous Rating with several RED FLAGS. See my recent post Mayo Is Right about Citi for details on our analysis of the company’s loose Deferred Tax accounting and other Red Flags. There are other reasons to run from this stock.

RED FLAGS:

Over $7bn in off-balance sheet debt
$2.2bn in under-funded Pension liabilities
Over $10bn in Asset write-offs
Very Dangerous valuation (detail follow)

Read More

Market Outlook Part 1: Rise of the Speculative Movement

Speculator's Paradise

Since the early 1990s, we have seen huge growth in the number of speculators and their impact on the market. Belief that it was easy to make money in the stock market was the primary driver of this boom in speculation. As shown in Exhibit 1, it was VERY easy to make money in the equity markets from 1986 to 1999.

Read More

Stock Pick of the Week: Buy Medtronic Inc. (MDT) – Very Attractive Rating

Stock Pick of the Week: Buy Medtronic Inc. (MDT) – Very Attractive Rating

HIDDEN GEM: Our detailed discounted cash flow analysis shows that MDT’s current valuation (stock price of $31.95) implies that the company’s profits will decline by 50% and never grow again. Our economic earnings model shows profits are growing, not declining, which makes the Risk/Reward for MDT Very Attractive.

Read More

JDS Uniphase Cp (JDSU) — free report for Ask Matt, Dangerous Rating

JDS Uniphase Cp (JDSU) — free report for Ask Matt, Dangerous Rating

RED FLAG: Our analy­sis of the Finan­cial Foot­notes reveals: the com­pany has writ­ten off over $60bn in assets over the last twelve years. That is a big num­ber com­pared to the company’s mar­ket cap of roughly $2.2bn and its net assets of about $1.3bn. This results in economic earnings of -$5,346mm compared to Net Income of -$866mm during the last fiscal year. For details on what causes the dif­fer­ence between Eco­nomic Ver­sus Account­ing Prof­its, see Appen­dix 3 on page 10 of our free report on JDSU.

Read More

Stock Pick of the Week: Sell/Short Yahoo (YHOO)

Stock Pick of the Week: Sell/Short Yahoo (YHOO)

Overall, the Risk/Reward of investing in Yahoo’s stock looks Very Dangerous to me. There is lots of downside risk given the Misleading Earnings and there is little upside reward given the already-rich expectations embedded in the stock price.

Read More

Stock Pick of the Week: Buy Xilinx (XLNX)

Stock Pick of the Week: Buy Xilinx (XLNX)

HIDDEN GEM: Our detailed valuation model shows that XLNX grew its “economic” profits by nearly $14mm during its last fiscal year while it reported an $18mm decline in accounting profits.

Read More

Stock Pick of the week: Buy Myriad Genetics (MYGN)

Stock Pick of the week: Buy Myriad Genetics (MYGN)

A newcomer to our Most Attractive Stocks for July, this small cap stock has an excellent risk/reward profile, which earns it our highest Rating: Very Attractive.

Read More

No Double-Dip Recession In Sight, Just Slow(er) Growth

No Double-Dip Recession In Sight, Just Slow(er) Growth

As highlighted in LPL Group excellent “Mid-Year Outlook for 2010″, the economy is moving from ‘recovery’ mode to ‘expansion’ mode, which is very different from moving from ‘recovery’ back to ‘recession’ – a prediction made by many attention-seeking alarmists these days. We are still growing, just not as fast.

Read More

Charles Schwab Corp (SCHW) Neutral Risk/Reward Rating for Ask Matt Readers

dreamstimefree_966040_thornBranch

Here is a free copy of our report on SCHW for Ask Matt readers. This report provides details behind Matt’s… Read more >>

Read More

Investing vs Speculating

Investing vs Speculating

The difference between Investing and Speculating is much larger than Wall Street would have you believe. In fact, they could not be too more different activities. Speculating is gambling. Investing is intelligent decision-making.

Read More

GAP is Stock Pick of the Week – Hidden Gem

GAP is Stock Pick of the Week – Hidden Gem

Hidden Gem – GPS: economic earnings are rising faster than reported accounting earnings b/c the company lowered the capital employed to run the business. GAAP earnings do not capture increase capital efficiency of the business.

Read More

Sirius Satellite – A Dangerous Stock

Sirius Satellite – A Dangerous Stock

TheStreet.com recently published three articles quoting me on SIRI. Andrea Tse called and, after reviewing our models on SIRI, I told her that the stock was Dangerous because:

Read More

How to make money picking stocks

How to make money picking stocks

Material changes in the present value of expected… Read more >> cash flows are the key driver of material changes in a stock

Read More

Finance 101

Finance 101

Finance is the process for making accounting data useful.

Per Accounting 101: accounting data by itself is not useful. Think of accounting data as the words used in the language of Finance. Just as with any language, words can be arranged to convey almost any meaning.

Read More