Sign Up For The Next
New Constructs Webinar






Navigation

How To Value A Stock, Step 1: Profit (NOPAT)

Thursday, August 28th, 2014 11746800996_b38f4c37d9_m

Our first step to gauge the value of a company is to determine the true, after-tax cash flows generated by its operations. We call this Net Operating Profit After Tax (NOPAT).

Read More

Non-Operating Tax Adjustment – NOPAT Adjustment

Tuesday, June 25th, 2013 NOTA

Without removing the tax impact of non-operating items, one still gets distorted picture of a company’s operating profitability.

Read More

See How Diligence Paid In 2011

Monday, April 30th, 2012 dreamstimefree_6271799_handHoldingLightBulb

Everyone wants diligence. Few will ever turn it down. The problem is that diligence is expensive. New Constructs makes diligence cost-effective.

Read More

footnoted.org vs New Constructs = Hype vs Substance

Thursday, March 1st, 2012 footnoted.org vs New Constructs = Hype vs Substance

When I ran across the recent article “270,033 pages later, a chance to catch our breath…”, I could not help but admire footnoted.org’s marketing moxy.
The article provides a count of the number of pages of 10-K filings that have poured in during the real earnings season. It also highlight a couple of the largest filings. At first glance, it is easy for one to assume that all of the 270,033 pages were also analyzed.

Read More

Fox Business News: “The Real Earnings Season”

Friday, February 17th, 2012 Fox Business News: “The Real Earnings Season”

Fox Business News features my focus on the Real Earnings Season that is overlooked by most everyone in the market.

Read More

The Real Earnings Season Begins Now

Friday, February 17th, 2012 The Real Earnings Season Begins Now

Nearly all of the invest­ing world ignores 10-K sea­son. 10-Ks contain the most important financial information that companies provide all year.

Read More

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.

Read More

Accounting Is Fishy at the Zumiez (ZUMZ) Surf Shop

Tuesday, March 29th, 2011 Accounting Is Fishy at the Zumiez (ZUMZ) Surf Shop

2010 earnings for the retail apparel sector have been quite strong, especially compared to 2009. However, looking behind the window dressing of reported earnings, we find that not all earnings are made the same. Zumiez Inc. (ZUMZ), retailer of cool, new action apparel turned to an old accounting trick to boost its 2010 earnings by 13%

Read More

Red Flag Report: Hidden Expenses/Income: What You Don’t Know Can Cost You

Tuesday, March 1st, 2011 dreamstimefree_3430_keepOutBuoyInSmallPond

Most investors are not aware that companies hide one-time and unusual charges and income inside normal, operating line items (e.g. “Cost of sales”) on their income statement. These hidden items can mislead investors by artificially decreasing/increasing GAAP earnings. We found 13,000+ one-time items buried in normal line items like “Cost of Sales” by studying the Footnotes of 10-K filings from 1998 thru 2/15/2011. This research revealed that companies have concealed over $41 billion in one-time items.

Read More

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.

Read More

Western Digital Corp (WDC) – free report for Ask Matt, Very Attractive Rating

Friday, November 19th, 2010 Western Digital Corp (WDC) – free report for Ask Matt, Very Attractive Rating

HIDDEN GEM: Our detailed val­u­a­tion model shows that WDC grew its “eco­nomic” prof­its by 226% while account­ing prof­its grew 194% dur­ing its last fis­cal year. Eco­nomic prof­its rose by $769mm while account­ing prof­its rose by $912mm.

Read More

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.

Read More

Munger on Accountants: “Utterly failed us…and no sign of reversal of the failure”

Tuesday, September 28th, 2010 Munger on Accountants: “Utterly failed us…and no sign of reversal of the failure”

The reason we focus on Economic Earnings as opposed to Accounting Earnings is because Accounting Earnings are subject to too much manipulation – as Charlie Munger states below. This problem is not going away anytime soon.

Read More

XBRL: Digitial Needles In the Digital Haystack

Tuesday, September 28th, 2010 XBRL: Digitial Needles In the Digital Haystack

We have always known that finding data is the Footnotes is, for most investors who are without our patented Research Platform, like searching for needles in a haystack. With XBRL, the only difference is now investors can search for digital needles in a digital haystack. Funny how little things change.

Read More

Stock-Picking Matters More Than Ever

Friday, September 17th, 2010 Stock-Picking Matters More Than Ever

As follow-on to my 3-part Market Outlook series of posts, I am highlighting a quote from GaveKal research’s Daily note today which supports my assertion that the “Easy Money Days Are Over” and that success in stock-picking will rely on superior analytical skills as opposed to the market-timing skills that have predominated most of the past 25 years (see Market Outlook Part 1: Rise of the Speculative Movement).

Read More

Market Outlook Part 1: Rise of the Speculative Movement

Thursday, September 2nd, 2010 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: Sell/Short FedEx Corp (FDX)

Tuesday, August 24th, 2010 Stock Pick of the Week: Sell/Short FedEx Corp (FDX)

RED FLAG: The main driver of the difference between Economic and Accounting earnings is FDX’s $11.9bn of off-balance sheet debt, a big number compared to $19.7bn in Net Assets and $25.6bn of market value.

Read More

Sandridge Energy (SD) – Free Report, for Ask Matt Readers, Highlighting a Major Red Flag in the Footnotes

Thursday, August 19th, 2010 Sandridge Energy (SD) – Free Report, for Ask Matt Readers, Highlighting a Major Red Flag in the Footnotes

Here is our free report on Sandridge Energy for Ask Matt readers. Our analysis of the Financial Footnotes reveals a major RED FLAG: the company has written off over $3.4bn in assets in just the last two years.

Read More

New Constructs Receives Patent on Research System

Thursday, July 22nd, 2010 dreamstimefree_73564_sculptor

The United States Patent and Trademark Office awarded us patent #7,752,090, titled: System and Method For Reversing Accounting Distortions and Calculating A True Value of a Business.

Read More

Finance 101

Thursday, May 13th, 2010 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