By Byron MacLeod, CFA
Associate Director of Research, Gradient Analytics, LLC
“Whatever you are, be a good one.” – Abraham Lincoln
We at Gradient Analytics are accounting experts. We evaluate companies for earnings sustainability, financial engineering, and accounting mismanagement. Unfortunately, many investors and portfolio managers may be unaware of the variety of levers enabling managers to aggressively recognize revenue, temporarily boost earnings, overstate assets, hide liabilities, or grow through acquisitions. Unaware investors can suddenly find that their supposedly “safe” investments have turned sour on them.
By monitoring the true quality of earnings, it becomes easier to judge a company’s true financial health.
The “Trump Bump” & Rising Correlations
Though the market appears to be recently dominated by Trump’s potential impact on the American economy, earnings quality trends continue to be relevant to stock prices. Read more
For better or for worse, as investors we are generally suckers for a good stock recommendation. Trouble is, we frequently end up getting suckered by that very same “sure thing.” Well, doing one’s own due diligence is a reasonable antidote for bad counsel. On the other hand, what about those rare cases when the due diligence behind the proffered equities has effectively been done?