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David Trainer
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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 Constructs research regularly produces Hidden... More
My company:
New Constructs
My blog:
The Diligence Institute
My book:
The Valuation Handbook
  • The Real Earnings Season Begins Now 0 comments
    Mar 6, 2012 10:10 AM | about stocks: INTC, LO, LLY, WMT, LRCX, MS, VHC, C, PFG, ZUMZ, KODK, AAL

    Nearly all of the invest­ing world ignores 10-K sea­son. You rarely hear any­thing about 10-Ks in Wall Street research. Cov­er­age by the media is light to say the least.

    Yet, 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.

    We, at New Con­structs, will research the foot­notes of 2000+ new 10-Ks in the next cou­ple of weeks.

    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.

    For exam­ple, after review­ing East­man Kodak's (EKDKQ.PK) 2010 10-K in March of 2011, I was able to pre­dict it would go bank­rupt. See "Dead Com­pany Walk­ing". For sim­i­lar rea­sons, we told clients that the same would hap­pen to Amer­i­can Air­lines (AAMRQ.PK). I was proven right about 10 months later on both com­pa­nies. Why did it take 10 months? Prob­a­bly because that is how long the com­pa­nies were able to mas­sage their quar­terly account­ing results to cover the truth.

    Cash is a fact, earn­ings are an opin­ion. Even­tu­ally, facts tend to win. And the foot­notes are the only place to get the facts.

    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.

    Disclosure: I am long INTC, LO, LLY, LRCX.

    Themes: forensic analysis Stocks: INTC, LO, LLY, WMT, LRCX, MS, VHC, C, PFG, ZUMZ, KODK, AAL
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