Stock Profits: Getting to the Core

(3 customer reviews)

$9.42

Author(s)

Pages

278

Format

PDF

Published Date

2005

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Description

Stock Profits: Getting to the Core–New Fundamentals for a New Age

Stock Profits: Getting to the Core is designed to explain and demonstrate a new approach to fundamental analysis. The concept is based on the idea that by making core earnings adjustments, we can arrive at a real picture of a corporation’s operating profit or loss, the likely growth curve into the future, and the financial and operating strength and capitalization of the company.

Introduction:

The book has two sections. Part I is a summary of five specific and important techniques:

  • Core earnings calculations. The adjustment from reported earnings to core earnings is critical in order to begin your analysis with valid and relevant information. The major adjustments are projected pension income (net of interest expense), earnings from discontinued operations, income from sale of capital assets, and other nonrecurring and extraordinary items.
  • Trend discovery. The second technique suggested in this revised approach to fundamental analysis is the process of discovering trends (again, based on core-earnings-adjusted results). In the traditional approach to fundamental analysis, we tended to accept audited numbers and indicators at face value and to make decisions without questioning the data.
  • Trend interpretation. Once we identify the nature of financial trends (and the need to adjust to core earnings), it also becomes possible to analyze companies on a realistic basis.
  • Confirmation. The methods of confirming indicated trends add certainty to our forecasting, and this is at the heart of stock analysis.
  • Fundamental volatility analysis. Chapter 5 proposes that market risk should be based not on price volatility, but on volatility in the fundamentals.

In Part II, these techniques are expanded upon with specific and detailed examples. Chapter 6 examines the importance of investigation, which sets up the crucial step-by-step analysis of several listed companies, found in Chapter 7. In Chapter 8, we expand upon the detailed examples by showing how the numbers are interpreted. Chapter 9 concludes with an example of how to isolate stocks down to a handful of potential investment candidates based on a combination of indicators: core earnings adjustments, price volatility, and dividend record.

Contents:

  • Core Earnings Calculations: A Revised Approach
  • Trend Discovery: Finding the Elements of Emerging Change
  • Trend Interpretation: Deciding What It Means
  • Confirmation: A Powerful Analytical Technique
  • Fundamental Volatility
  • Investigation: Verifying the Financials
  • The Core Earnings Workbook: Finding the Numbers
  • The Trend: Workbook: Breaking the Code
  • Looking Ahead: The Core Roadmap
Stock Profits: Getting to the Core--New Fundamentals for a New Age By Michael C. Thomsett pdf
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3 reviews for Stock Profits: Getting to the Core

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  1. Daxton Huffman (verified owner)

    Fundamental investing is the approach used by most individual investors and professional money managers, and it is a way of revealing the worth of a company’s stock. Michael Thomsett has taken it even further to help the investor find the true earnings of a company. It takes time and thorough analysis, but it’s worth every second of time spent digging further into the financials.

  2. Samson Peck (verified owner)

    Reported earnings are not always what they seem! In today’s investment arena, investors need to stay informed to sustain acceptable returns. Core Earnings is a terrific tool that aids investors in better understanding a company’s true financial position, as well as identifying real earnings drivers.

  3. Hayley Petersen (verified owner)

    When it comes to analyzing the financial statements of today’s publicly listed companies, investors often discover that the truth is an enigma wrapped in mystery. Michael Thomsett’s book helps investors to peel away the confusion and get to the core of what really matters.

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