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David Trainer
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Follow me on Twitter: @NewConstructs David is CEO of New Constructs (www.newconstructs.com), an independent research that specializes in unearthing key insights from the Financial Footnotes of Annual Reports. Having analyzed over 50,000 annual reports and their Financial Footnotes, New... More
My company:
New Constructs
My blog:
The Diligence Institute
My book:
The Valuation Handbook
  • See How Diligence Paid In 2012  0 comments
    Mar 18, 2013 1:47 PM

    Everyone wants diligence. The problem is that diligence is expensive. I make diligence cost-effective.

    What do I mean by diligence?

    I mean reading and analyzing the entire 10-Ks* for over 3000 companies over their entire reporting history. 10-Ks contain the most important financial information that companies provide all year. Unlike press releases and 10-Qs, only the 10-Ks contain a complete set of the financial footnotes. And only in these footnotes can one find the full set of data required to assess the true profitability and valuation of stocks.

    From this mountain of data, we will derive proprietary research that delivers some of the best stock picks of any research firm. Just as we did last year: See How Diligence Paid In 2011.

    For example, after reviewing Scripps Networks Interactive (NYSE:SNI) 2011 10-K in March of 2012, I revealed that the company's economic earnings grew faster (up 50%) than its GAAP net income was (up only 1%) for 2011. SNI is up almost 30% since my March 27, 2012 article. For similar reasons, we told clients that Amgen, Inc. (NASDAQ:AMGN) was an attractive investment. AMGN is up almost 40% since April 17, 2012.

    Other examples of how analyzing the complete 10-K for companies enabled me to make strong stock predictions. Note the articles below are just a sample. We provided clients with more.

    Maybe it is time more people started paying attention to 10-Ks, or, at least, to research that focuses on analyzing the financial footnotes in 10-Ks.

    It is not an easy task. My firm, New Constructs, has developed proprietary technology and patented systems around doing it efficiently.

    Our fund research leverages our top-ranked stock picking in our Predictive Fund ratings on 7400+ ETFs and mutual funds. We also offer a free Fund Screener and reports on all 7400+ funds we cover.

    *10-Ks are the official version of the annual report filed with the Securities and Exchange Commission (SEC). These documents are anywhere from 100 to 1000 pages and contain the most important financial data available on publicly-traded companies. No other reports come close to rivaling the amount of relevant information in 10-Ks.

    Sam McBride contributed to this report

    Disclosure: David Trainer owns WNR, CSCO, and WDC. Sam McBride and David Trainer receive no compensation to write about any specific stock, sector, or theme.

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