S3 Ep 2 David Trainer - New Constructs - Better Fundamental Research using Machine Learning

Mega-Brands: Investing in Mega Trends & the Mega Brands Best Positioned to Add Value to Your Wallet

Today's conversation was really fun. I talked with founder of New Constructs Research, David Trainer.

David has a long career in fundamental analysis and founded New Constructs to enhance the research and data gathering process by harnessing technology.

There's enormously important data hidden in company 10Q and 10K's but 99% of analysts do not read these important reports. I am guilty of that myself. These documents are a painful read and David's robust research extracts the important data from these reports and creates much better snapshots of the current business and places a rating on the business, the quality of earnings (economic versus reported EPS) using important and predictive metrics like ROIC, FCF Yield, etc. From there the team compares that to the current stock price to identify if theres an opportunity for investors.

Sell side research is hard to trust, there are too many hidden agenda's inside ratings and recommendations IMO.

We talk about their Zombie stock report, aka alot of the meme stocks and likely many that ARK owns today. ZIRP allowed profitless businesses to thrive for much longer than they should have and now we are getting back to what's important: profitability, ROIC, compounding EPS through strong capital allocation decisions, etc.

The fundamentals matter most, even if the market is supremely focused on macro>micro today. In the end, the company and its ability to grow, generate cash, compound earnings and cash flows above its cost of capital. Finally we seem to be getting back to the reality of markets, the business and its profitability matter.

https://www.newconstructs.com is a wonderful site to check out to see if they can help you or your RIA practice build better stock, mutual fund, or ETF portfolios.

For more information on the Mega brands portfolio: https://www.globalbrandsmatter.com/dynamic-portfolio