David Trainer shows how to find and read New Constructs stock reports. Each report breaks down five rating components, compares accounting earnings to economic earnings, and lists every adjustment made to the numbers so you see exactly what changed the rating.
Chapters
Welcome to the New Constructs tutorial for stock reports. Our stock reports can be accessed through Report Quick Search by typing a ticker and clicking Go. This will direct you to the stock's ratings page where you can access our report by clicking the Download Report button. Stock reports can also be accessed through the Ratings tab. Type a ticker in the box to the right of Ticker and click View Ratings. This will generate our ratings page for the stock along with a download report button. You can also download reports through our premium stock screener. All stocks that appear in the results for any type of selection will have a corresponding download button in the far right report column. Our stock reports are easy to read and give you the information you need in order to make a prudent investment decision. Start at the top with our investment recommendation. Our recommendation distills thousands of pages and hours of analysis and research in order to give you one indication: buy, sell, or hold. We also provide our overall rating for the stock, an explanation of our rating, how the stock ranks among the 3,000+ stocks we cover, and how the stock ranks among other stocks in its sector. To the right of our recommendation, we present relevant price information along with a chart depicting the stock's trading volume relative to its stock price. Below our investment recommendation is a table containing our investment rating details. This table provides a breakdown for the 5 components that drive our overall rating. For more information regarding our stock ratings, see the tutorial. After reviewing our investment rating details, scroll down to see our earnings and valuation diligence summary. This is a great section of the report that illustrates the enormous amount of diligence that goes into every stock we cover. The summary begins by showing how the company's accounting earnings compare with its economic earnings, as illustrated by the graph to the left. Then, we disclose the number and dollar amount of income statement and balance sheet adjustments we made in order to convert accounting earnings to economic earnings. Next, we provide the number and dollar amount of adjustments we made to our discounted cash flow valuation of the company. And finally, we show how the stock ranks among all the stocks we cover in terms of the number of earnings and valuation adjustments. Note the transparency we offer for all of our adjustments. We want you to know how much work we do for our clients and show the details for each adjustment in the appendices. For more information regarding the 30+ accounting adjustments we make to get the truth about earnings and valuation, click the link inside the report. At the bottom of page 1, you'll find the company's stock performance over the past year and key market statistics. Scroll down to pages 2 and 3 to see our written explanations for each of our 5 ratings components. Each rating component report begins with our rating and is followed by an easy-to-understand explanation. At the end of each report, we provide you with the company's actual metric for the latest fiscal year or current stock price. All of our ratings component reports are also accompanied by easy-to-understand graphs or charts. These graphs and charts provide a good indication of historical performance, trends, and relationships between metrics. Scroll down the report to page 4 where you'll find our breakdown for the adjustments we made to the company. Page 4 provides you with our Total Adjustments Summary. This summary starts by showing the total amount of adjustments we made for the company, followed by the average amount of adjustments we make for all companies. Then we show the total dollar value of adjustments, followed by the total dollar value as a percentage of the company's market cap. Below the table, we provide charts for the data presented above. Upon moving down to pages 5 and 6, you'll find a report for each type of adjustment: Income Statement, Balance Sheet, and Stock Valuation. Each type of adjustment report begins by showing the amount of adjustments we made and their net impact on reported earnings, Net Assets, or Market Cap. Then we show how the amount of adjustments required to compute our valuation metric for the company compares with the amount of adjustments required for all companies. We supplement this information with the most notable accounting distortion for each type of adjustment. This is a great feature of the report that provides insight and detail into the item that has the greatest impact on our calculation for NOPAT, invested capital, or our discounted cash flow model, economic book value, and enterprise value calculations. For example, the most notable accounting distortion to reported net income for Kimberly-Clark is $93 million of non-operating expenses we found buried in operating line items. These non-operating items don't appear on the income statement and can only be found by carefully combing through the footnotes of a company's SEC filing. Consistent with all of our data throughout our reports, we also provide easy-to-understand charts for each type of adjustment. Finally, we finish our Stock Reports with the Appendices. Page 7 contains Appendices 1 and 2. Appendix 1 details the adjustments we made to convert accounting earnings to economic earnings. Appendix 2 details the adjustments for our Discounted Cash Flow Model, economic book value, and enterprise value calculations. This detailed disclosure highlights the total transparency I mentioned earlier. We want you to see all the hard work that goes into our analysis for each company, and we're not afraid to show you every calculation in detail. Appendix 3 concludes our report and provides detail regarding our stock rating methodology. Thanks for watching this tutorial. If you have any questions, please leave a comment.
