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Diligence Institute

Highlights From New Constructs Investment Research

Stock Pick of the Week: Buy International Business Machines (IBM)

Stock Pick of the Week: Buy International Business Machines (IBM)

HIDDEN GEM: Our detailed valuation model shows that IBM grew its “economic” profits more than it accounting profits during its last fiscal year. Economic profits rose by $1.15bn while accounting profits rose by $1.09bn.

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Stock Pick of the Week: Sell/Short Whole Foods Market (WFMI)

Stock Pick of the Week: Sell/Short Whole Foods Market (WFMI)

One of the Most Dangerous Stocks for July, Whole Foods has misleading earnings and a sky-high valuation, in our opinion. The same is true for all of our Most Dangerous Stocks.

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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.

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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.

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