The more investors understand about how GAAP net income omits valuable information, the better equipped they are to find truly hidden gems, or those companies with growing economic earnings and undervalued stock prices.
In this special report, we identify and provide specific examples of the red flags you should be on the lookout for when activist investors begin building a large position in a company.
There are many ways to calculate free cash flow. Most approaches are short cuts to our more comprehensive approach to the calculation. The formula for FCF can be seen in Figure 1. For more on FCF, see within.
CEO David Trainer sat down with Chuck Jaffe of Money Life and MarketWatch.com to talk about our Danger Zone pick this past week: Danger Zone: Suspended Ratings.
We suspend our ratings on certain stocks when we feel the company's latest reported financials are no longer reliable or indicative of the risk/reward of the stock. For example, an announcement of an acquisition or spin-off means the current financial statements could change significantly.
Valeant has been guilty of some dubious assertions in its attempts to defend itself from claims that its business model is nothing more than a rollup scheme and that its stock is overvalued.