This information was calculated on Sep 13, 2014 and is based on the closing value of the most recent trading day which may not be today.
This information is based on the Yahoo Historical Pricing and is only as good or as current as that data Read More →
| Company name | Viropharma Inc |
| Stock ticker | VPHM |
| Live stock price | [stckqut]VPHM[/stckqut] |
| Confident Investor Rating | Poor |
The following company description is from Google Finance: http://www.google.com/finance?q=vphm
ViroPharma Incorporated (ViroPharma) is biotechnology company. The Company is engaged in the development and commercialization of solutions for physician specialists to address unmet medical needs of patients living with diseases that have few if any clinical therapeutic options including therapeutics for rare and orphan diseases. Its product development portfolio is focused on four programs: inryze (C1 esterase inhibitor [human]) for management of hereditary angioedema, maribavir for cytomegalovirus (CMV) infection, VP 20621 for the management of C. difficile-associated diarrhea (CDAD) and VP20629, which the Company expects to develop for the treatment of Friedreich’s Ataxia. Its product development portfolio is focused on: C1 esterase inhibitor [human], maribavir for cytomegalovirus (CMV) infection, VP20621 (prevention of recurrent CDAD) and VP20629 (treatment of Friedreich’s Ataxia). On January 23, 2014, Shire Plc completed tender offer for 79.5% of ViroPharma Inc.
Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in Viropharma Inc. It is not possible to confidently invest in a company that is not currently profitable.
If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.
In my opinion, Scott Adams is one of the great satirists of the 21st century. He frequently uses Dilbert to poke fun at companies, management, and the work force. In this strip, Scott is pointing out that the investment analysts that publish earnings expectations either don’t know what they are doing or are being “managed” by the company executive management.
Unfortunately, I cannot reprint the Dilbert cartoon here due to copyright issues. I can reproduce the text of the conversation as fair use though. If you would like to see the cartoon (which is much more humorous), please click here.
The C.E.O.: You should be proud that we beat earning that analysts expected.
Dilbert: Why should we be proud that analysts are bad at making estimates?
The C.E.O.: Those bad estimates don’t happen on their own. I had to mislead them.
Asok: I’m proud of you.
Analysts following a company have an official annual and quarterly earnings estimate for the company that they make public. They construct these expectations based on many different points of data, including company conference calls, previous earnings reports, market trends, sector strength, etc.
The problem is that many companies tend to “manage” their earnings expectations. Meaning, they will purposely project conservative earnings expectations so that they can beat those expectations on a quarterly and annual basis. No one wants to invest in a company that is missing earnings expectations, no matter how robust those earnings. So companies will manage expectations in order to “beat” earnings each quarter. Being able to tell mutual fund and hedge fund managers that we have “beat quarterly expectations 14 quarters in a row” is quite a powerful market tool for bringing new investors to the company.
This problem was actually much more prevalent a decade ago. Some companies managed their earnings expectations by doing things that were at best unethical and at worst illegal. Now many of those unethical techniques are illegal.
Most analysts are incredibly smart and very honest. They are trying very hard to predict the expected earnings of the company they are monitoring. However, they are not without error. Also, it is inherently a conflict of interest that managers want the earnings expectations to be slightly lower than actual results. Not so low that it embarrasses the analyst, but low enough that the company looks like it “beat” those expectations.
The real challenge is trying to figure out what a small investor should do about beating or missing expectations. Best advice: don’t worry about it. You only need to worry about where the masses of investors are going to take the stock. As a momentum investor, you simply need to see if the market is happy or unhappy about the quarterly or annual announcements. Trying to interpret the result of beating or missing expecatations is a very short-term game that will probably make you wrong as often as you are correct.
This information was calculated on Sep 12, 2014 and is based on the closing value of the most recent trading day which may not be today.
This information is based on the Yahoo Historical Pricing and is only as good or as current as that data Read More →
| Company name | The Men’s Wearhouse, Inc. |
| Stock ticker | MW |
| Live stock price | [stckqut]MW[/stckqut] |
| P/E compared to competitors | Fair |
MANAGEMENT EXECUTION
| Employee productivity | Poor |
| Sales growth | Poor |
| EPS growth | Poor |
| P/E growth | Good |
| EBIT growth | Poor |
ANALYSIS
| Confident Investor Rating | Poor |
| Target stock price (TWCA growth scenario) | $55.18 |
| Target stock price (averages with growth) | $44.92 |
| Target stock price (averages with no growth) | $30.7 |
| Target stock price (manual assumptions) | $53.58 |
The following company description is from Google Finance: http://www.google.com/finance?q=mw
The Men’s Wearhouse, Inc. is a specialty retailer of men’s suits and a provider of tuxedo rental product in the United States and Canada. It operates in two segments: retail and corporate apparel. As of February 2, 2013, the Company operated 1,143 retail stores, with 1,023 stores in the United States and 120 stores in Canada. Its United States retail stores are operated under the brand names of Men’s Wearhouse (638 stores), Men’s Wearhouse and Tux (288 stores) and K&G (97 stores) in 50 states and the District of Columbia. The Company’s Canadian stores are operated under the brand name of Moores Clothing for Men (Moores) in 10 provinces. The Company also conducts retail dry cleaning, laundry and heirlooming operations through MW Cleaners in the Houston, Texas area. In June 2014, the Company acquired Jos. A. Bank Clothiers, Inc.
Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in The Men’s Wearhouse, Inc.
If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.
For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(access_s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:
I hope that this makes you a better investor. [/s2If]
