Archive

Don't Bet Against This Champion of the Franchising Model

Don't Bet Against This Champion of the Franchising Model

One of my mentors just published a new book focused on the corporate lifecycle... My team and I call him the godfather of adjusted accounting analytics, and it's not said tongue-in-cheek. Bart Madden developed the CFROI framework. It's one of the first methods to focus on something equivalent to what my team and I have […]
Due to Investor Fear of a Boom-and-Bust Sector, This High-Return Firm Is Massively Mispriced

Due to Investor Fear of a Boom-and-Bust Sector, This High-Return Firm Is Massively Mispriced

During an economic crisis, there's a sneaky way your portfolio could be crippled... In late June, UC Berkeley hosted its annual "Fraud Fest" – completely online for the first time. This year, the 200 panelists had a lot to talk about... As one said, "the pandemic is the perfect storm for fraud." Due to the […]
A Key Economic Measure Is Flashing 'Red'... Here's Why It's Different This Time

A Key Economic Measure Is Flashing 'Red'... Here's Why It's Different This Time

The 'at-home economy' claimed another victim this month, as workers adopt their 'Zoom shirts'...  The retailer that claimed to "dress the president" since Abraham Lincoln was yet another company to fall to the "At-Home Revolution."  Earlier this month, Brooks Brothers filed for bankruptcy. It couldn't survive the lockdowns that closed its stores, nor the lack […]
Here's the Key Tenet for Successful Corporate Value Creation

Here's the Key Tenet for Successful Corporate Value Creation

This past weekend, we taught a course on corporate strategy... And once again, as usual, we learned something new. The class, which we call "Return Driven Strategy" ("RDS"), is focused on understanding the key tenets of a successful long-term value-creating corporate strategy. Uniform Accounting is essential to identifying "RDS companies," as we call them. These […]
To Find Fraud, Focus on the People, Not the Numbers

To Find Fraud, Focus on the People, Not the Numbers

In late 2010, one of our largest clients called us in a panic... One of its biggest holdings, coffee maker Green Mountain Coffee, had just received a data request from the U.S. Securities and Exchange Commission ("SEC") stating it was launching a formal investigation into the company's accounting.  Our client needed to know what to […]
A Bet on Pets Is Paying Off for a Popular Snack Maker

A Bet on Pets Is Paying Off for a Popular Snack Maker

One index's 'reconstitution' can often be a microcap kingmaker... Each year, the major stock indexes – from the S&P 500, to the Nasdaq 100, to offerings providers like MSCI – are all "reconstituted." This is a process when new members are added, and companies that no longer fit the index's criteria are removed. It might […]
The Market Misunderstands This Food Conglomerate... and That Means Investors Are Overpaying for It

The Market Misunderstands This Food Conglomerate... and That Means Investors Are Overpaying for It

The 'At-Home Revolution' has meant more toys... and not just for kids. In early June, I wrote in Forbes that reduced travel due to the coronavirus pandemic has had trickledown effects. One big beneficiary has been golf and golf equipment. Wealthy people who would normally be vacationing in Europe, the Caribbean, or elsewhere are trapped […]
The Market Doesn't Move as One... So Think About Your Allocation in These Three Sectors

The Market Doesn't Move as One... So Think About Your Allocation in These Three Sectors

Several household names all have something in common with some of the highest-upside stock ideas in the market right now... Even the largest companies have small beginnings.  Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Disney (DIS), Mattel (MAT), and Hewlett-Packard – now known as HP (HPQ) – all started in a garage. Facebook (FB) started in […]
One Retailer Is a Massive Beneficiary of the 'At-Home Revolution'... But That Doesn't Mean Its Stock Is a Buy Today

One Retailer Is a Massive Beneficiary of the 'At-Home Revolution'... But That Doesn't Mean Its Stock Is a Buy Today

The 'impossible trinity' is one of the widely held beliefs in macroeconomic theory... Also known as the "trilemma," the logic is that an economy can't have all three of the following:  A fixed foreign exchange rate Free capital movement Independent monetary policy If you want two of these, you need to give up on the […]
Here's the Secret for Finding the Biggest Upside in Stocks

Here's the Secret for Finding the Biggest Upside in Stocks

Even the largest businesses start small... Excluding banks and insurance firms, more than 100 companies in the U.S. have a market cap greater than $50 billion. These mega-cap names are world-beating businesses that dominate their industries. Some investors talk about how "network effects" and "scale" mean these companies are unstoppable, and they pile into the […]