NOPAT is the after-tax operating cash generated by the business, excluding unusual losses and gains, financing costs, goodwill and other non-cash items.
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.
David A. Geracioti, Editor-In-Chief of Registered Rep magazine, recently invited me for an interview on why economic earnings matter when selecting stocks, mutual funds and ETFs.
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Accounting data was not designed for equity investors, but for debt investors. "Earnings, earnings per share and earnings growth are misleading measures of corporate performance."(from page 66 in The Quest For Value by Bennett Stewart, Harper Collins 1991.)
The difference between Investing and Speculating is much larger than Wall Street would have you believe. In fact, they could not be too more different activities. Speculating is gambling. Investing is intelligent decision-making.
The best strategy for making money in stocks is "buy low expectations & sell high expectations." Sounds easy — but if it was easy, everyone would do it, right?
Finance is the process for making accounting data useful.
Per Accounting 101: accounting data by itself is not useful. Think of accounting data as the words used in the language of Finance. Just as with any language, words can be arranged to convey almost any meaning.
This blog will show how to:
1. Uncover the unadulterated facts about corporate profitability and valuation.
2. Avoid falling prey to misinformation about stocks that inundates the airwaves, papers and most research channels.
3. Develop intelligent investment strategies.