How I think about New Constructs - John Rotonti - 15 September 2023

20 Sept 2023 · 1 min

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1:18

John Rotonti describes New Constructs as three tools: a financial data platform with rigorously calculated metrics like NOPAT and ROIC that can be traced back to filings, a reverse DCF, and an advanced screener. The platform matches results from operating and financing methods to ensure accuracy.

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I think of New Constructs as 3 separate tools. First, I think of it as a financial data platform that provides the best, most rigorously calculated financial data on the metrics that matter. NOPAT, invested capital, return on invested capital, economic profit, or EVA. And free cash flow. I say it's the most rigorously calculated because you calculate NOPAT and invested capital using the operating method and the financing method, and you get the exact same number down to the penny using both methods. The other reason I think it's the most rigorous is that the platform provides an audibility function so that the user can trace back exactly where the adjustments are coming from inside of the corporate filings. So it's not a black box. Secondly, I think it's the most robust reverse DCF I've come across. And then the third tool is the advanced screener, which once again is powered by the rigorously calculated data.