Credit Trends - Latest Article http://www.credittrends.com/blog Please find attached the latest article you requested. Mon, 25 Mar 2013 14:01:22 +0000 en hourly 1 http://wordpress.org/?v=3.3 CreditTrendshttp://feedburner.google.com Report on Bed Bath & Beyond (BBBY) Available http://feedproxy.google.com/~r/CreditTrends/~3/t1Jfa_UEWws/ http://www.credittrends.com/blog/2013/03/25/report-on-bbby-available/#comments Mon, 25 Mar 2013 14:00:55 +0000 hackel http://www.credittrends.com/blog/?p=2639 There is plenty about BBBY  investors do not understand or account for in their valuation of the firm

Our report is available for the introductory price of $2500. If you are interested, please contact CT Capital LLC

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]]> http://www.credittrends.com/blog/2013/03/25/report-on-bbby-available/feed/ 0 http://www.credittrends.com/blog/2013/03/25/report-on-bbby-available/ For a Real Edge, Calculate Free Cash Flow Correctly http://feedproxy.google.com/~r/CreditTrends/~3/DeXlju6ubM8/ http://www.credittrends.com/blog/2013/03/13/for-a-real-edge-calculate-free-cash-flow-correctly/#comments Wed, 13 Mar 2013 16:55:39 +0000 hackel http://www.credittrends.com/blog/?p=2630 Free Cash Flow- Must adjust for misclassifications, extraordinary and one-time items and other expenses and events not properly accounted for in either the income statement, statement of cash flows, or footnotes. Examples would be pension over (underfunding), interest, taxes, payment to non-controlling interests, capital leases, moral obligations and overspending in discretionary areas.

If you are unsure how to accomplish this, buy the text to your right

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]]> http://www.credittrends.com/blog/2013/03/13/for-a-real-edge-calculate-free-cash-flow-correctly/feed/ 0 http://www.credittrends.com/blog/2013/03/13/for-a-real-edge-calculate-free-cash-flow-correctly/ February 2013 Investment Review-Abridged Version http://feedproxy.google.com/~r/CreditTrends/~3/vmMvjXqZhvU/ http://www.credittrends.com/blog/2013/03/03/february-2013-investment-review-abridged-version/#comments Sun, 03 Mar 2013 16:24:00 +0000 hackel http://www.credittrends.com/blog/?p=2627  

Sorry, the full version is sent to clients of CT Capital LLC. For information, please see www.ctcapllc.com

 

February 2013 Monthly Review-General Distribution

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CLICK LINK BELOW-THIS IS AN ABRIDGED VERSION OF THE FULL REPORT SENT TO CLIENTS OF CT CAPITAL LLC.

 

PDF Jan 2013 reivew=credittrends site

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]]> http://www.credittrends.com/blog/2013/02/10/january-2013-abridged-review/feed/ 0 http://www.credittrends.com/blog/2013/02/10/january-2013-abridged-review/ Nu-Skin Enterprises http://feedproxy.google.com/~r/CreditTrends/~3/VH_m8Lk_hmc/ http://www.credittrends.com/blog/2013/01/10/nu-skin-enterprises/#comments Thu, 10 Jan 2013 22:41:19 +0000 hackel http://www.credittrends.com/blog/?p=2603

Shares in Nu Skin Enterprises (NUS) rallied strongly after reporting an excellent quarter and upwardly revised record outlook for the upcoming year. Just 2 days later its shares tumbled after a well-known publicity seeking hedge fund operator attacked another firm in their sector which also uses a direct selling approach[1]. This hedge fund operator last year urged investor’s short Green Mountain (GMCR) in the low $20’s, helping knock its shares to the teens—GMCR now stands in the $40’s and his hedge fund is up just 6% this year after being down last year, which some are saying may have propelled his latest rampage, including petitioning the FTC and hiring, according to his own words “two of the top law firms in the country” to investigate the firm.  God only knows what he is really paying these law firms to do, and why he felt compelled to take such action if his analysis was correct.

One brokerage analyst dropped coverage of his short position, saying for the foreseeable future its shares will not follow fundamentals, while at the same time calling the hedge fund’s case as “light.” Again, he did not short NUS, but it did have a strong associative impact which purged its shares by almost 20% this month.  Nu Skin’s Board is extremely strong in direct selling as are its senior management and the firm has earned high cash returns on capital every year over at least the past decade. Its auditor has been PWC throughout and the firm has a high cash tax rate (33.3% last year). Although I am not immune to the risks of a large direct sales workforce working solely on commission, I believe it is fully captured by the higher cost of capital for this firm.

Hedge funds are becoming a frustrating part of this business as they often sway investors, including beseeching financial intermediaries and legislators, often with misleading information and then taking their trumped-up cases to institutional funds. This selling often begets more selling by day traders and high frequency trading houses. The shorted stock in the cited case traded over 110% of its outstanding shares in 3 days.

While not one to often promote added legislation, I believe congress and the SEC should take a closer look at the tactics used by hedge funds, especially how they influence the confidence and integrity of the financial markets.


[1] See Wall Street Journal, Nu Skin Suffers As Investors Back Away, at http://blogs.wsj.com/corporate-intelligence/2012/12/21/nu-skin-falls-as-investors-back-away-from-door-to-door/?mod=yahoo_hs

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]]> http://www.credittrends.com/blog/2013/01/10/nu-skin-enterprises/feed/ 0 http://www.credittrends.com/blog/2013/01/10/nu-skin-enterprises/ MYGN- Unusual Value http://feedproxy.google.com/~r/CreditTrends/~3/ruvYrCa4srQ/ http://www.credittrends.com/blog/2012/10/11/mygn-unusual-value/#comments Thu, 11 Oct 2012 21:31:05 +0000 hackel http://www.credittrends.com/blog/?p=2599 Myriad Genetics

Myriad Genetics (MYGN) is not the typical firm that passes the models quantitative and qualitative screening metrics, such that it must be given closer scrutiny prior to inclusion. A similar analysis was undertaken prior to inclusion of Ancestry.com, which was sold at the beginning of last month on news they had hired an investment banker to explore a sale upon which its valuation rose by over 50%. This company is similarly undervalued.

Not only does MYGN, which discovers and commercializes DNA testing to access the risk of developing disease, primarily cancers, currently offer a stable growth 6.6% free cash flow yield, 14.3% economic profit/revenues and 18.9% ROIC, they are close to some major scientific breakthroughs which should interest larger firms.

MYGN’s current sales originate from tests aimed at the genes affecting breast and ovarian cancer, while in the coming two years plan on launching tests related to the risk of developing prostate and pancreatic cancer, skin cancer and melanoma. Beyond 2013, they expect to release a test to determine the presence of depression versus bi-polar affliction. This would be a particularly important product should it come about. The firm is currently incurring higher than normal marketing expense, attempting cover the remainder of the gynecological market.
Their high powered and diverse Board consists of its Vice Chairman, a former winner of the Nobel prize in Chemistry; the founder of Biogen, now Biogen Idec, a portfolio holding; the former VP of Pfizer Research for over 25 years; the former President of Roche Molecular; the former Senior VP of Research at Glaxo SmithKline; and Senior VP and Controller at WellPoint.
Kenneth S. Hackel, CFA

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]]> http://www.credittrends.com/blog/2012/10/11/mygn-unusual-value/feed/ 0 http://www.credittrends.com/blog/2012/10/11/mygn-unusual-value/ Google-What Investors Have Been Missing; Fair Value Estimate http://feedproxy.google.com/~r/CreditTrends/~3/d9pbMH7IH1s/ http://www.credittrends.com/blog/2012/08/14/google-what-investors-have-been-missing-fair-value-estimate/#comments Tue, 14 Aug 2012 20:50:52 +0000 hackel http://www.credittrends.com/blog/?p=2597  

Investors have been focusing on the wrong financial metrics in their analysis of  Google equity securities.. Cost per click and other such highfalutin tech analyst measures are naiive indicators of a firm……..

THIS REPORT IS AVAILABLE FOR $50,000 FOR  NON CLIENTS OF CT CAPITAL LLC CLIENTS

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]]> http://www.credittrends.com/blog/2012/08/14/google-what-investors-have-been-missing-fair-value-estimate/feed/ 0 http://www.credittrends.com/blog/2012/08/14/google-what-investors-have-been-missing-fair-value-estimate/ Is your investment advisor worth a hill of beans? http://feedproxy.google.com/~r/CreditTrends/~3/-ua_6pLwZms/ http://www.credittrends.com/blog/2012/08/10/is-your-investment-advisor-worth-a-hill-of-beans-2/#comments Fri, 10 Aug 2012 19:40:11 +0000 hackel http://www.credittrends.com/blog/?p=2590

Ask the following 8 questions:

 

1-Explain, in detail, once you’ve estimated the entity’s free cash flows, how you arrive at the discount rate?

HINT: It’s not what you learned in grad school or the CFA exam.

 

2-Explain, again in detail, all of the adjustments you make to the published financial statements, to arrive at an estimate of free cash flow?

HINT: Lots of adjustments are required.

 

3-How do you define return on invested capital?

HINT: We’re looking for cash on cash.

 

4-How do you define economic profit and when should it be use?

HINT, Because many companies are not capital intensive

 

5-Explain how companies account for (s) derivatives and (b) pensions and other post-employment benefits

6-How should value be derived?

HINT: It’s not through relative value, such as a firm’s PE against its peers or some index

7-How do you account for a firms over-spending or under spending?

8-Have you read “Security Valuation and Risk Analysis?

HINT: If not, call CT Capital LLC

 

 

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]]> http://www.credittrends.com/blog/2012/08/10/is-your-investment-advisor-worth-a-hill-of-beans-2/feed/ 0 http://www.credittrends.com/blog/2012/08/10/is-your-investment-advisor-worth-a-hill-of-beans-2/ Any Risk To Prospective Free Cash Flows Must Be Used When Determining Discount Rate for Share Prices http://feedproxy.google.com/~r/CreditTrends/~3/MVlXXVDQASo/ http://www.credittrends.com/blog/2012/08/02/any-risk-to-prospective-free-cash-flows-must-be-used-when-discounting-free-cash-flows/#comments Thu, 02 Aug 2012 12:14:15 +0000 hackel http://www.credittrends.com/blog/?p=2584 Imagine if surgeons used same methods as 50 years ago-Crazy, right?

investors using same tools to analyze risk-see http://amzn.to/T4x71d

Sales, cost of sales, SG&A and tax rate stability. Free cash flows and operating cash flows with the making of proper adjustments. Self-insurance. Litigation. Credit. Derivatives. Yield Spreads, etc, etc. If you are not doing this as part of your risk analysis and much much more, you don’t know how to analyze and quantify risk. Your are using the wrong discount rate ( cost of equity) in concluding the fair valuation of the enterprise and share price.

I show you how.

Stop using the same tools as investors who continually dole out poor advise.

 

Order Security Valuation and Risk Analysis. After all, it took 40 years of my experience in this business to write

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]]> http://www.credittrends.com/blog/2012/08/02/any-risk-to-prospective-free-cash-flows-must-be-used-when-discounting-free-cash-flows/feed/ 0 http://www.credittrends.com/blog/2012/08/02/any-risk-to-prospective-free-cash-flows-must-be-used-when-discounting-free-cash-flows/ Why Many REITS Are Similar to Ponzi Schemes http://feedproxy.google.com/~r/CreditTrends/~3/RpGUtHKHY2U/ http://www.credittrends.com/blog/2012/07/22/why-many-reits-are-similar-to-ponzi-schemes/#comments Sun, 22 Jul 2012 22:17:36 +0000 hackel http://www.credittrends.com/blog/?p=2581  

We feel the stocks listed below carry significant risk.

While their valuations have held, it is due to an unsustainable dividend being financed by equity investors in search of yield, rather than the inherent ability of these firms to generate consistent free cash flows.

In addition, as will be pointed out, each of these firms have a questionable financial structure as well as carry risk to prospective free cash flows.

 

REPORT AVAILABLE FOR $250,000

 

 

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