Walkthrough of New Constructs' Stock Report with David Trainer

Let me share a copy of one of our PDF reports so you can see exactly what you get with one of these reports. First of all, you're gonna get the same rating system you saw in the preview just a second ago. Green is good, red is bad. We're very quickly distilling millions and millions of pages of documents down into these clear, Proven superior signals, and in the report, what you're getting here is a whole additional layer of detail—not just in the quality of earnings evaluation, but for each individual criteria, you get to see where the company stands. And then the difference maker in the data: superior data drives a superior model. You can't do it; you can't have a superior model without superior data. You can't have superior ratings. without a superior model? Well, the superior data is featured on the front page. $160 billion in income statement and balance sheet adjustments to convert accounting earnings to economic earnings. That's it. That's the difference. $247 billion in valuation adjustments. Now you want more detail? We'll give you way more detail. We will back all of these details and claims up. First, let's dive in and get a little bit more comfortable with what's going on with economic earnings versus reported earnings per share. Here's a 5-year chart so you can see how the trends match up. Clearly, accounting earnings look a good bit better than economic earnings. And what we see all the time is that economic earnings are much steadier. It's because we're removing all the unusual and non-recurring items out of the accounting earnings to get to what is a more stable and truer measure of profits. over the last 5 years. Same is true for return on invested capital versus the cost of capital. 5 years for the 2-year average free cash flow yield. Next, we look at stock price versus economic book value. And lastly, there's a summary of the reverse discounted cash flow model and the market implied growth appreciation period analysis. Next, details on the adjustments. And when I'm talking about details, I'm actually really going to get into specifics around How the company ranks. How many adjustments did we make over the last 5 years? And what's that— how does that compare to the average for all companies? Total value of adjustments and the total value of the adjustments as a percentage of market cap and the average for all companies. So you can see here Amazon is quite a bit below average. But it doesn't matter when you're looking at it so much at a macro level as it does matter when you get more specific. Let's talk about the income statement. Here we made 10 adjustments to convert reported earnings to NOPAT for net impact of about $1 billion. We have 6 income adjustments at $6.3 billion against 4 expense adjustments at $7.4 billion. So we're telling you, we're doing the good and the bad because we're not here just to make companies look good or just to make them look bad. We're here to give you the truth. That means we take the good and the bad and we put it together. And the net here is that the NOPAT adjustments as a percent of revenue, Not that big. On the balance sheet, however, they're quite large. Here you can see Ford asset decrease adjustments of around $93 billion against 8 increase adjustments of about $53 billion. We also like to note the most notable adjustment being made so you get a sense of, you know, what's really going on here and where the big adjustments come from. Next, let's take a look at the valuation adjustments. Similar situation here. You get a sense of what's increasing, what's decreasing, and what the trend is historically over time. Now, the most powerful part of these reports are the appendices. Here you're effectively getting an entire financial model for a company in a box on one piece of paper. And this is the kind of financial model that would probably cost you, if you wanted to get it done by a real expert who knew what they were doing, you're probably looking at $25,000 to $50,000 per company to do something like this. This is one of the most popular products with our institutional clients. Clients because they can bring this to a meeting. Boom, here I go. Here's my trend in economic earnings. What's the return on invested capital for the past 5 years and over the trailing 12 months? Same thing true for WACC, economic earnings margin, average invested capital. You get the idea. Tons of details going back over time. We're breaking down return on invested capital. What's the revenue? What's the NOPAT? What's the average invested capital? What are the DuPont model drivers? NOPAT margin and invested capital turns, all here for you to analyze with the actual numbers. 2-year average free cash flow yield analysis over time. The price-to-economic book value per share analysis. See all the adjustments we're making. And then we're going to go into the details on the adjustments you saw previously in the report. All the valuation adjustments, here they are to get to the total valuation adjustments. That we summarized just a couple seconds ago. Same is true for the income statement adjustments. All the things that we're doing to convert GAAP net income to NOPAT over the past 5 years and for the trailing 12 months. This is the secret to the model. We're doing the same thing for the balance sheet adjustments. We start with total assets. These are all the adjustments we make to get to invested capital, which gives us average invested capital. This level of transparency is unrivaled, just like our data is unrivaled. Why, why are we showing people how we do things? Because we want you to know the standard of research you deserve from any resource provider. That's why we're going out of our way to be more transparent. Challenge any other firm to give you as good of research as we do. Challenge anyone else to provide as much data. Challenge anyone else to provide proof.