GAAP, “Items”, And Adjusted Earnings - Sometimes a Strange Tale

It is axiomatic that a company’s stock’s price is the present value of all future cash flows it is likely to pay out, and that earnings constitute one gage of a company’s economic value. Unfortunately, there is often a lot of smoke between published profits according to generally accepted accounting principles and the real output of a company. Read more

Bank Earnings Quality: Do The Numbers Tell The Story?

Investors rely on companies’ financial statements for information on how a company is doing. That’s not always easy when reported earnings are inflated or reduced by unusual, or unusually large, gains or losses, or other so-called nonoperating items. For banks, this is especially problematic. Read more

What Can Investors Learn From Analyst Meetings?

Analyst meetings are a good way for securities analysts to get information about the companies they cover, or are interested in. These meetings can benefit individual investors, as well. Read more

Using Beta

Beta can be used to determine the price movement of a stock (or portfolio) in relation to a benchmark. By combining low Beta stocks with Value Line’s fundamental analysis, we believe investors can realize superior risk-adjusted returns over the long-term. Read more

Diversification Part II

While most investment professionals subscribe to the idea that portfolio diversification is a valuable concept, there are, of course naysayers. Read more

Diversification

The concept of diversification has been around for a very long time, however, it wasn’t until the 1950s that it was seriously applied to portfolio theory. The basic concept is that by choosing investments that have minimal or no relationship with each other, an investor can reduce his or her overall risk. Read more

Dividends on the VL Report Explained

Value Line calculates dividend yields and the payout ratio slightly differently than the norm. In this article, we explain the figures on the VLIS page, and how we come up with our dividend estimates and projections. Read more

Dividends Come Out of Cash Flow, Not Earnings

 Investors often think that dividends come out of earnings, but this is not true. This misperception may scare some investors away from great dividend-paying companies. Read more

Investing vs. Speculating and Trading

Ask anyone that owns stocks and they’ll probably tell you that they are an investor. And, in fact, the entire financial industry and the media that cover it will likely agree, or at least want you to believe it’s so. Read more

The World of Retail: Hardlines vs. Softlines

Within the retail space, merchants are classified into two broad categories, each of which is defined by the type of product sold. Although there are differences between the two groups, stocks in both segments are typically influenced by the same set of factors that can affect their performance. Read more
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