New Stocks On Most Attractive And Most Dangerous Lists: July 2016

Recap from June Picks

Our Most Attractive Stocks (-3.7%) underperformed the S&P 500 (-0.8%) last month. Most Attractive Large Cap stock The Macerich Company (MAC) gained 12% and Most Attractive Small Cap stock Children’s Place (PLCE) was up 11%. Overall, 14 out of the 40 Most Attractive stocks outperformed the S&P 500 in June.

Our Most Dangerous Stocks (-3.4%) outperformed the S&P 500 (-0.8%) last month. Most Dangerous Large Cap stock Penske Automotive Group (PAG) fell by 25% and Most Dangerous Small Cap Stock Marchex (MCHX) fell by 12%. Overall, 23 out of the 40 Most Dangerous stocks outperformed the S&P 500 in June.

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Photo Credit: Got Credit (Flickr)

The successes of the Most Attractive and Most Dangerous stocks highlight the value of our forensic accounting as featured in Barron’s. Being a true value investor is an increasingly difficult, if not impossible, task considering the amount of data contained in the ever-longer annual reports. By analyzing key details in these SEC filings, our research protects investors’ portfolios and allows our clients to execute value-investing strategies with more confidence and integrity.

12 new stocks make our Most Attractive list this month and 12 new stocks fall onto the Most Dangerous list this month. July’s Most Attractive and Most Dangerous stocks were made available to members on July 7, 2016.

Our Most Attractive stocks have high and rising return on invested capital (ROIC) and low price to economic book value ratios. Most Dangerous stocks have misleading earnings and long growth appreciation periods implied by their market valuations.

Most Attractive Stock Feature for July: Syntel Inc. (SYNT: $47/share)

Syntel Inc. (SYNT), information technology and knowledge process outsourcing provider, is one of the additions to our Most Attractive stocks for July.

Syntel has built a highly profitable business by providing outsourced IT services and knowledge process outsourcing to companies across the globe. Over the past decade, Syntel has grown after-tax profit (NOPAT) by an impressive 21% compounded annually to $221 million. NOPAT has increased to $233 million over the last twelve months, per Figure 1.

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Disclosure: New Construct Staff receive no compensation to write about any specific stock, sector or theme.

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