As we begin a new year and new decade, it is an excellent opportunity to make sure you’re in the RIGHT stocks. And just as importantly, to make sure you’re not in the WRONG stocks.
The fact is, you can’t do that using the data most portfolio managers have available to them...distorted GAAP and IFRS accounting, it is impossible.
There is a reason that 9 of the top 10, and over 160 of the top 300 investment firms in the world read Valens’ Uniform Accounting analysis on a regular basis. Uniform Accounting analysis is becoming a vital tool for investors to unlock insights for their portfolio and to unlock alpha.
Many of our clients tell us that once you’ve seen the TRUE numbers for a company you can never unsee them.
Using Uniform Accounting, we are able to see through the noise of as-reported accounting to get better insights for our clients, to help guide them to better investment outcomes.
Use Uniform Accounting To Avoid Torpedoes
Our clients call the stocks that can blow up your portfolio “torpedoes.” You don’t notice them as you are sailing along in the market… but all of a sudden they explode when you least expect it, and your portfolio starts taking on water.
These stocks that can ruin your portfolio, and turn a good year into a “just okay” year, or even a bad one. Using Uniform Accounting (UAFRS) can help identify those stocks that might be way more expensive than you think, or bleeding money, and you didn’t even realize it.
Time and time again, when we have conversations with our clients, the first thing portfolio managers want to discuss with us isn’t what stocks they should be buying. They want to understand if we are seeing any torpedoes in their portfolio.
Instead of using UAFRS to validate their opinions, they’re using our tools to make sure they don’t own something that could blow up their portfolios.
As Buffett says the first rule of investing is don’t lose money, and the second rule is don’t forget the first rule.
To highlight how we use our tools to avoid torpedoes and identify long ideas, we used UAFRS to write five articles on Seeking Alpha from January through October 2019, offering key insights on five different names. (We also wrote two more in November and December, but it’s still too early to call...)
Here are the returns of those five ideas through the end of the year:
- Buy WGO (3/29/19) - Up 70%
- Short UBER (5/9/19) - Down 34%
- Short BYND (5/30/19) - Down 23%
- Buy LK (6/27/19) - Up 114%
- Short MTN (10/3/19) - Up 5% (while the market is up double that)
While we had two huge winners (WGO and LK), more importantly, we told investors to avoid three high-profile stocks, and all three underperformed. BYND and UBER underperformed the market by over 30% each after we told investors to stay away!
The great thing for our clients is, they don’t have to wait for a portfolio consultation to see these types of signals.
Every week we produce weekly newsletters highlighting companies that look significantly overvalued, or look like they have challenging fundamentals based on Uniform Accounting. We call them our Valens Equities INsight & Inflections Report and our UAFRS vs As-Reported Newsletter.
Hitting Home Runs with Uniform Accounting
Every quarter, we identify the 20-30 most compelling ideas we are seeing. We produce our Conviction Long Idea List quarterly. Using our:
- Uniform Accounting metrics
- Deep fundamental research
- Credit analysis
- Management compensation analytics
- Earnings call truth detection system
- And a macro overlay
We identify the most compelling equity ideas we are seeing in the US. These ideas range from large cap to small cap ideas, and across all the sectors in the US.
Over the last 2+ years, these ideas have produced an almost 60% return (19% annualized). Taking the top 10 ideas from the list each quarter produced a 84% return (26% annualized) over that same period. For context, the market produced a 43% return (14% annualized) over the same period.
Using this framework, we’ve identified large cap ideas like Facebook before it rose 600%, or Lam Research before it doubled.
We’ve identified under-followed small-cap like Planet Fitness, before it rose 200% and Cirrus Logic, before it rose 160%.
Uniform Accounting combined with a strong fundamental research framework adds significant value to the market.
To start the year, we’re offering you a special offer.
Now is your chance to get access to both our best newsletters for identifying equity torpedoes, and our best equity long ideas.
To kick of a new decade, we’re offering access to our best-selling Equity Newsletters at a fraction of their normal cost. You can use these to not only identify potential winners, but as importantly, avoid potential losers...
Usually, subscribing to our equity newsletters costs $400 per month, or $4,000 for the full year (a $800 saving to the monthly cost) to get the following:
- The Valens Conviction Long Idea List
- The Valens Equity Idea Highlight (a weekly deep-dive into our favorite current idea)
- The Valens Equity Insights and Inflections (a weekly recap of all the equity research we published)
- The UAFRS vs. As-Reported Weekly (a detailed look at some of the biggest accounting distortions we saw during the week)
To welcome everyone to a new decade, during January only, we’re offering this same content for just $200 per month, or $2,000 per year.
Your Email Address:
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To order by phone, or if you have any questions, you can reach out to Doug Haddad and our Client Servicing Team at email@example.com or call us at 630-841-0683.