There are many ways to define the quality and merit of equity research. One meaÂsure stands tallest: perÂforÂmance of stock recÂomÂmenÂdaÂtions. And by that meaÂsure, New ConÂstructs’ research is of very high quality. See our latÂest Proof Is In PerÂforÂmance Thru 4Q13 Report for more details.
As you can see in the post on our stock-picking accoÂlades, we have plenty of indeÂpenÂdent, 3rd-party valÂiÂdaÂtion of our stock-picking sucÂcess. So, you don’t just have to take our word for it.
Our sucÂcess comes from being able to idenÂtify groups of stocks that are most likely to be re-priced as the marÂket, over time, recÂtiÂfies misÂperÂcepÂtions of ecoÂnomic value creÂated by investors employÂing less anaÂlytÂiÂcal rigor than we. We derive our advanÂtage from the in-depth analyÂsis of finanÂcial stateÂments, espeÂcially the notes to the finanÂcial stateÂments, which we apply to the analyÂsis of the underÂlyÂing ecoÂnomic value of 3000 firms. We believe our exactÂing approach to research gives us advanÂtage in the selecÂtion of indiÂvidÂual secuÂriÂties for our long and short portfolios.
For the whole year of 2013, our Small-Cap Long strategy (39.4%) beat the Russell 2000 by 7.8% and our combined Large and Small-Cap Long strategy (32.6%) beat  the combined S&P 500 and Russell 2000 by 3.9%%. In 4Q13 our Large-Cap Long/Short Strategy (5.1%) beat the Risk-Free Rate by 5%.
The cumulative returns of our recÂomÂmenÂdaÂtions since JanÂuÂary 2005:
Long/Short StratÂegies:
- Most Attractive/Dangerous (Large and Small stocks): 61.0%
- Most Attractive/Dangerous (Large cap stocks only): Â 59.3%
- Most Attractive/Dangerous (Small cap stocks only): 53.1%
Long StratÂegies:
