David Trainer | TalkMarkets | Page 35
CEO of New Constructs, LLC.
New Constructs leverages reliable fundamental data to provide unconflicted insights into the fundamentals and valuation of private and public businesses. Combining human expertise with cutting-edge machine learning (ML) technologies (more

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Danger Zone: Value Investors
To execute a value-based investment strategy, one must truly understand the profitability and valuation of a company.
NOPAT Adjustment: Foreign Exchange Loss
The real earnings season is nearly over. For the past month and a half, our analysts have diligently gone through over 3,000 annual reports, Form 10-K’s, to make adjustments from GAAP numbers to economic earnings. This report features an interesting non-operating item we’ve discovered in numerous filings.
Danger Zone: Dunkin Brands Group (DNKN)
DNKN’s economic earnings are in decline. Future growth expectations are overblown as well because the company’s plans to expand outside of the Northeast pit it against formidable, entrenched competitors like Starbucks (SBUX) and McDonald’s (MCD) as well as other aggressive growers such as Krispy Kreme (KKD) and Tim Hortons (THI).
Danger Zone: Tuesday Morning (TUES)
Discount retailer Tuesday Morning (TUES: $16/share) is in the Danger Zone this week. Brick and mortar stores continue to struggle against the onslaught of online retailers, and TUES is not positioned well to meet this challenge.
Danger Zone: AOL
AOL is over-priced. It looks primed for a large drop based on faulty valuation.
How To Avoid The Worst Style Mutual Funds
Picking from the multitude of style mutual funds is a daunting task. In any given style there may be as many as 942 different mutual funds, and there are at least 6,095 mutual funds across all styles. Why are there so many mutual funds? The answer is because mutual fund providers are making lots of money selling them.
Are Investors Wishing Upon Their Stars?
A Vanguard study in 2010 showed little evidence of outperformance for five and four star-rated funds. In other words, Morningstar’s ratings drive investors’ investment decisions even though the ratings do not appear to be very indicative of future performance.
Danger Zone: AOL
AOL Inc. is in the Danger Zone this week. This Web 1.0 figurehead is trying to sell investors on its reinvention as a digital media company. It appears that too many investors are buying that story as the stock is up over 140% in the past two years. The stock has a long way to fall.
Danger Zone: Comcast (CMCSA)
Comcast (CMCSA: ~$51/share) is in the Danger Zone this week. The cable giant’s reign of power and profit growth is coming to an end. The stock is priced as if the good-ole days will continue and profits will continue to grow at a higher rate than I believe possible.
New Constructs Initiates Facebook (FB) Coverage At Neutral
While the company’s 61% growth from 2012-2013 exceeds this annualized expectation, it remains to be seen if FB can keep up high growth for the long term.
How To Avoid The Worst Style Mutual Funds
Picking from the multitude of style mutual funds is a daunting task. In any given style there may be as many as 942 different mutual funds, and there are at least 6,095 mutual funds across all styles.
AutoZone: The Best Bet In Automotive Retail
This year’s unusually cold winter has been a source of frustration for drivers, but it has been a boon for car maintenance specialists and auto parts dealers. AutoZone (AZO: $540/share) is the best long-term bet for investors.
New Stocks Make Most Attractive/Dangerous Lists For February
Results from our Most Attractive/Dangerous picks for January follow covering National Research Corporation, Amgen, Sears, and Air Transport Services Group. Our Most Attractive Pick for February: Myriad Genetics; Our Danger Pick: Southwest Airlines,
Podcast: Callidus Software Is In The Danger Zone (CALD)
Chuck Jaffe of Money Life interviews David Trainer on why the cloud computing company, Callidus Software, is in the Danger Zone. (7:55)
Danger Zone: Callidus Software (CALD)
Cloud software provider Callidus is a classic story of a bad company riding the coattail of the popularity of cloud computing and SaaS companies. SaaS stocks surged in 2013, and CALD followed the trend, gaining 166% over the past year. But it's in the danger zone...
Danger Zone: Energy Sector Funds
Energy sector ETFs and mutual funds are in the Danger Zone this week. Despite the quality of stocks in the sector, ETF providers and fund managers are not offering quality funds. Even worse, they are charging disproportionately high fees for these low-quality funds.
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