If you bought Cisco Systems Inc (CSCO) last August when I recommended it to investors, or when I recommended it again in January, or any time between May 10, 2012 and now when the stock has had my Very Attractive rating, then today has been a good day for you.
The difference between the stock price and Economic Book Value (EBV) of s stock measures the difference between the market’s expectation for future profits and the no-growth value of the stock.
After S&P’s recent upgrade to its outlook on Delta Airlines [s: DAL], I cannot help but to wonder how they do their analysis.
Our Company Valuation models are very sophisticated discounted cash flow and earnings quality models.
An enormous amount of works goes into every model. I wish I could offer a short-cut (beyond our ratings and reports) for understanding our models.
By David Trainer
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Posted in Investing 101, New Constructs Offerings
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Also tagged DCF, discounted cash flow, discounted cash flows, earnings quality, expectations analysis, expectations investing, Invested Capital, New Constructs, stock ratings, stock screener, WACC, Weighted Average Cost of Capital
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February 28, 2012 – 9:12 am
As discussed in “The Real Earnings Season Starts Now”, annual reports are the best source for developing investment ideas. I provided my clients with dozens of insights in 2011 that delivered impressive returns, and I continue that trend with my recommendation of MO.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged Altria, cigarrettes, Consumer Staples Select Sector SPDR, Dreman Contrarian Funds: Dreman High Opportunity Fund, DRLLX, DWS Value Series, FCD, Focus Morningstar Consumer Defensive Index ETF, hidden charges, ICLEX, ICON Funds: ICON Consumer Staples Fund, Inc: DWS Strategic Value Fund, KDHIX, MO, tobacco, Vanguard Consumer Staples ETF, Vanguard World Funds: Vanguard Consumer Staples Index Fund, VCSAX, VDC, XLP
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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 economic earnings, ETF predictive rating, excess cash, First Trust NASDAQ-100-Technology Sector Index Fund, Lam Research, LRCX, ProShares Ultra Semiconductors, QTEX, ROIC, USD, Very Attractive Rating
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August 11, 2011 – 1:34 pm
Here is a free copy of our report on RIMM for readers of Ask Matt.
The valuation of RIMM’s stock implies the company’s after-tax cash flow (NOPAT) will permanently decline by nearly 75%.
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.
Yes, RIMM is losing market share and fast. Yes, RIMM’s Blackberry Playbook tablet is a dud. Yes, the stock has been a stinker recently. And yes, none of what I wrote at the beginning of this article would matter if the stock were not super cheap.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged AAPL, android, Apple, First Trust NASDAQ-100-Tech Index, GOOG, Google, ipad, iphone, LO, Lorillard, mobile computing, mobile phones, mobile technology, PowerShares QQQ, ProShares Ultra QQ, ProShares UltraPro QQQ, QLD, QQQ, QTEC, Research In Motion, RIMM, ROIC, TQQ
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Caterpillar Inc. (CAT) gets our Dangerous Rating. This means CAT’s quality-of-earnings are not attractive and the stock’s valuation is very expensive. For example, the valuation of the current stock price ($112.16) implies the company will grow its profits at 16% compounded annually for 20 years. The takeaway: there are better stocks to choose from. See details in our free report.