Knowledge Leaders

Knowledge Leaders Continued Their Outperformance In May June 03, 2015

Posted by Bryce Coward, CFA in Knowledge Leaders

Highly innovative companies outperformed again in May, continuing a streak that has been going on for quite awhile now. Whether in the developed markets or emerging markets, Knowledge Leaders have outperformed the broad DM and EM benchmarks over the last month, quarter, YTD, 1-year and…

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Knowledge Leaders Are Outperforming YTD May 27, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

In our white paper “The Knowledge Effect: Excess Returns Of Highly Innovative Companies”, we identified a stock market pricing anomaly in highly innovative companies.  The tendency of stocks of highly innovative companies to experience excess returns can be traced back to two main factors: A…

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The Knowledge Effect Leads to Excess Stock Returns May 08, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders, News

In a new white paper released today, we identify a stock market anomaly. The Knowledge Effect is the tendency of highly innovative companies to deliver excess returns for investors. Academic researchers first discovered an association between a firm’s knowledge capital and its stock performance. Our…

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Two Desirable Characteristics Of Innovative Industries May 06, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

The most innovative companies in the world tend to exhibit two highly desirable characteristics: high return on invested capital (ROIC) and low long-term debt as a percentage of total capital. There are fundamental reasons for these characteristics. First, innovative companies are very profitable because they…

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The “Moonshot” Portfolio April 15, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

When going through out point and figure charts, we sometimes come across a chart formation that we colloquially refer to as a ”moonshot”.  A ”moonshot” is when a chart has been in a basing formation or in a trading range for some time and then strongly bursts out of it to the upside.

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A Discussion On Return On Equity April 14, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

One the primary reasons we adjust financial statements to include intangible assets is have a more realistic lens to view every company with. Investment in intangible assets such as R&D, employee training and brand equity create sustainable, competitive advantages that result in higher market share and pricing power.

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The Fundamental Case for Canon April 13, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

Last week we received a good question from a client asking for our thoughts on Canon, the well-known maker of office machinery and cameras. Excepts from our response are below. From a relative strength perspective (relative to the MSCI ACWI), Canon has been in a well-defined long-term downtrend for the last four years.

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Time To Take A Hard Look At Juniper Networks April 02, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

Academic research has shown that not all research and development (R&D) is created equal. In every industry, you have two sets of companies: Knowledge Leaders and Knowledge Followers. On the one hand, you have Knowledge Leaders which are companies that introduce new and innovative products. These type of company’s follow a strategic innovation strategy.

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Innovation Boom, R&D Spillovers and Stock Performance March 17, 2015

Posted by Knowledge Leaders Team in Knowledge Leaders

There is a new innovation boom playing out in the United States that has many positive implications for US equities.  In July 2013, the BEA began including investment in intellectual property in National Income and Product Accounts.  As part of this benchmark revision, the BEA revised the US national accounts going back to 1947 to

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