The Power of “Earnings Quality” Take e.l.f. Beauty, for instance… Among ALL the stocks you might have chosen to play the recent bull market, this one is an unlikely choice. MOLLY: Well sure, it’s a cosmetics brand.
The first is “EQ High” – which means the company has HIGH earnings quality. In other words, they have big earnings that are likely to repeat and create a long-term, evergreen growth business… A very Bullish signal. We determine that through these two numbers… MOLLY:
Not exactly cutting- edge technology… MARC: Yes. But they did exactly
what Broadcom did… Something all the best “evergreen” winners have in common to survive and thrive through bull and bear markets. Put simply, they combined INNOVATION with their existing business model to create a new efficiency. In this case… they adopted AI to transform their product development. And that’s one
66% cash conversion… And negative 3% accruals. Can you explain what these are?
reason why, back on September 16, 2022, smack in the middle of a bear market, it lit up as a buy in our system. MOLLY: Why, exactly?
MARC: I’m going to have my newest colleague join us and explain everything in just a moment – the man who has advised billionaires and developed this new feature exclusively for our firm, Molly. But for e.l.f. Beauty, it meant just one thing… Buy the stock. And sure enough, watch what happened next… MOLLY: A 251% gain over the next 12 months… That’s enough to triple your money on a company that sells lipstick and eyeliner! Fascinating… MARC:
MARC:
Take a look, Molly… After months of investigation among 5,000 stocks, and hiring a 40-year veteran of the financial markets who sensed one of the biggest bankruptcies in American history during a meeting with the CEO… We’ve discovered a new way to filter earnings. In the case of e.l.f. Beauty… One click in the Power Gauge – and here’s what came up… MOLLY: There it is again… “EQ High.” What does that mean? MARC: EQ stands for “Earnings Quality.” In short, we built a brand-new feature into the Power Gauge that can examine any breakthrough sector and REMOVE the potential trash with a click. We do that by filtering earnings into two main categories.
You see, Molly, for the entirety of my career, the biggest moves among individual stocks were driven by their latest earnings report. Like the time Priceline crashed 100 points overnight, after they missed on earnings – which I predicted on CNBC. One trading play saw a 733% overnight gain.
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