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Company Insights

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Playing Hopscotch with the Revenue Recognition Principle: A Case Study

By | Company Insights, Corporate Governance | No Comments

In This Article:

Can investors be hoodwinked by a company’s revenue and profit figures? Multi-Act experts discuss how a global consumer technology company changed the revenue recognition; misleading investors to believe that they have had massive growth in revenues and profits over the past decade. This revenue recognition case study explains how they achieved this over four periods of revenue recognition methods and its implications for analysts. You’ll learn why it’s impossible for analysts to show reliable trends;  resulting in a precarious situation for investors. Read More

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U.S. Regulated Utilities: Non-Cyclical or Cyclical?

By | Company Insights, Global Equity Perspective | No Comments

In This Article:

As some of the best-performing stocks, many consider U.S. Utilities stocks a safe haven paying steady dividends with moderate risk. Assured return close to 11% shows why investors are attracted to this sector making them a bright choice in bear and bull markets. However, there is a caveat: Whenever rates rise, the value of these may drop. With the Central Bank’s repressive rate policy, we believe investors should show caution when making investments in U.S. Utilities equities.

This article discusses how U.S. interest rates seem to have given rise to a cyclical trend within the Utilities sector. Read what has been driving the sector’s current valuation growth.  
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Chinese E-Commerce Co: Real Growth or just Creative Accounting?

By | Company Insights, Corporate Governance, Global Equity | No Comments

Ever made an investment decision based on market hype? Multi-Act experts review a Chinese e-commerce company headed by a celebrated personality that appears to be outdoing its competitors. While the company seems to be a victor; a careful quality of earnings analysis by our team reveals some creative accounting practices that investors should not ignore. Analysis includes the company’s:

  • Adjusted Non GAAP EBITDA and Net Income
  • Capital Allocation
  • Low Tax Rate Sustainability
  • USD Denominated Debt

Questions arise about the said company’s profit margins, cash-flows and valuation. Read how this can impact investor decisions.

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Farm Sector: Ploughing the Books

By | Company Insights, Corporate Governance, Global Equity | No Comments

Given that the fundamentals in the agricultural sector appear stable and the sharp rise in the use of renewable fuels across the world, market participants seem to be positively biased towards stocks that are part of the “agricultural story”. But, as always, at Multi-Act, we believe that following the herd and placing bets on stocks that enjoy a pro-cyclical review is futile if one does not also cast an eagle’s eye at the quality of the company’s financials. Read More

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A Specialty Canadian Pharma Company: High on High Yield

By | Company Insights, Corporate Governance, Global Equity | No Comments

Lately, a lot of market participants are becoming skeptical about zero interest rate policies. This is particularly reflected in retail investors’ tendency of reaching for high yield (HY ETF inflows/popularity) and the incentive to the CEO community for related buybacks/acquisitions to boost reported performance during their tenure. Read More

Portfolio Management Services (SEBI Registration No. INP000002965) are offered through Multi-Act Equity Consultancy Private Limited (CIN: U67120PN1993PTC074692), which is a wholly-owned subsidiary of Multi-Act Trade and Investments Private Limited; Investment Advisory Services (SEBI Registration No. INA000008589) are offered through Multi-Act Trade and Investments Private Limited (CIN: U65920MH1997PTC109513).