“…most researchers should spend their time making sell decisions. Almost all of the really big trouble you’re going to experience in the next year is in your portfolio right now; if you could reduce some of those really big problems, you might come out the winner in the Loser’s Game.”
-Charles Ellis (The Loser’s Game)
Are There Hidden Risks Behind the Numbers in Your Portfolio?
Behind the Numbers (BTN) was founded in 1988 as an independent, conflict-free equity research boutique serving institutional investors, mutual funds, and hedge funds. Over the years, we have established a reputation for digging below the surface of a company's financial statements to find the real story the numbers are telling. We believe our research is unique in several regards:
We have over 50 years of combined experience using a forensic accounting style analysis which focuses on the quality and sustainability of a company’s earnings and cash flow.
Our work goes far beyond simple automated computer screens. Experienced analysts digging through footnotes and conference call transcripts can uncover problems that computers can't. We scour financial statements, footnotes, transcripts, and fundamental industry data to understand a company's value, or in many cases, lack thereof.
In addition to financial statement analysis, we apply fundamental, "grass roots" research and contrarian thinking to the task of assessing a company's growth prospects and uncovering both positive and negative trends the market may be failing to discount.
This proprietary research process assesses the earnings quality of widely-held companies – looking at both GAAP and company-adjusted results. We rank companies on a scale of 1-6 for earnings quality with a +/- to indicate improving or eroding quality. In many cases, a computer-generated red flag may be a false indicator and we explain why. Our reviews may reveal high-quality earnings from a company focused on long-term results and sustainable growth. However, we sometimes find instances where companies are beating forecasts with sales/earnings items that are skewed, unsustainable, or a result of an accounting method change or a change in management assumptions. Our research can be used to identify these “torpedo stocks” before they hit your fund’s performance. We invite you to explore our site to find out more about our research process.
Click here to read about Our Research Process