Our Methodology and Results
Today's largest broker/dealer organizations do not provide adjusted, forensically audited research to Wealth Advisors and Financial Planners. They give advisors what everyone else on Wall Street gets; research that is put together based upon REPORTED financials from companies, not ADJUSTED financials that have gone through extensive screening and forensic accounting.
GAAP accounting guidelines allow companies to do all sorts of things to their books. Unfortunately, most, if not all research is produced base upon misleading figures. You know it. We know it. And Wall Street knows it.
Valens Research rips apart the financial statements of over 6,000 companies globally, line by line, to uncover GAAP and IFRS distortions using UAFRS principles. We apply over 130 individual adjustments, cleaning up distortions related to R&D, Operating Leases, Stock Options, Excess Cash, M&A PP&E and Earnings, Goodwill, etc.
The results of this process are telling. Since we started highlighting our conviction long ideas three years ago, the average weekly idea has outperformed the S&P 500 by 2.6% quarterly, or by nearly 11% annually. More impressively, a simple backtest using UAFRS-based Quality, Growth, and Valuation factors has outperformed the market by 5.5% annually since 2005. Details can be seen below:
|LAST YEAR||3 YEARS||5 YEARS||10 YEARS||SINCE INCEPTION|