Tag Archives: personal-finance

The Downsides of Money Managers and Mutual Funds

On this blog, I try to focus on providing analysis on companies to help people decide what to invest in. I also try to expose people to new companies that are not well known but could be good opportunities. That’s my goal. I have had people ask me if they should be trying to manage their own money and investments or if they should just get a money manager or invest in a mutual fund. I’m not going to answer that question as it depends on the person, but I do want to make known that going that route does have some negatives.

Before I get to the negatives, I do want to start off by saying that going the route of money managers and mutual funds is not necessarily a bad thing. I plan to get into money managing one day as I’d like to own a fund of my own. Some funds do really well. The issue is that most do not. According to Morningstar, only 26% of funds beat the S&P 500 over the decade ending December 2021.

There are several reasons most funds underperform. First, amount of capital. A lot of these funds have Billions of dollars in them which actually limits the kind of investing they can even do. Even if they find a good small company that’ll go up tremendously over the next decade, it’ll be such a small part of their overall portfolio that it’ll barely matter.

Second, fees cut into profit. Obviously, fund managers don’t work for free. They take a fee from the money that they manage. Most funds have a .25%-1% management fee with actively managed funds being highest. These fees cut into profits.

Again, mutual funds can be a good option for people looking to invest their money, but there are negatives people should realize. If one is committed to going the mutual funds route, it’s important to research as much as possible as there are thousands of funds out there and most don’t beat the S&P.

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Is Beacon Roofing Supply, Inc. Stock a Buy (Analysis)

Beacon Roofing Supply sells residential and non-residential roofing products. They are also the largest publicly traded company focused on roofing materials in North America. They have existed for nearly 100 years but are still innovating by investing in new technology to get their products to contractors as fast as possible. In this article, I want to help answer the question, is Beacon Roofing Supply, Inc. (Ticker: BECN) a stock worth buying?

Beacon Roofing Supply began in 1928 in Charleston, Massachusetts as a small regional firm with 32 employees. The company has since grown into a large corporation with more than 400 locations. They have turned themselves into one of the leading companies in the roofing industry.

The company also has some very ambitious goals. They introduced their Ambition 2025 Value Creation Framework where they plan to achieve a net sales CAGR (compound annual growth rate) of around 8% to around $9 billion. They also plan to achieve an adjusted EBITDA CAGR around 15% to $1 billion. The company is also focused on deploying capital into mergers and acquisitions with the goal of boosting shareholder value.

Beacon, at time of writing, is currently trading at a market cap of $5.54 billion. They have a trailing p/e (price/historical earnings) of 11.79. A good trailing p/e depends on many factors but usually a trailing p/e between 10-20 is considered good. The company also has a forward p/e (price divided by estimated future earnings) of 12.30. Again, there are many factors that determine a good forward p/e but usually one between 10-25 is considered good, but it is important to remember that it is taken from estimated future earnings. The company is also trading at a p/b (price/book value) of 3.15. This means that the company is trading at a fairly large premium relative to its book value. The company has around $3 billion in debt which gives it a current ratio (a liquidity ratio which is used to measure a company’s ability to meet it’s short-term obligations) of 1.73. This means that the company’s current assets are 1.73 times higher than its current liabilities. A good current ratio is normally one between 1.5 and 3.

In conclusion, the numbers for Beacon Roofing Supply, Inc. seem good for the most part. Stock research company Zacks currently has them as a strong buy, and Yahoo Finance currently has them as undervalued. They have ambitious plans for growth and are increasing revenue year-over-year.

This article is not financial advice and is for information and entertainment purposes only.

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Affiliate Partners:

Check out the investing app SoFi. Sign up through our link and get $50 in free stocks by investing $10 – https://www.sofi.com/invite/invest?gcp=3cf3452a-7a65-41c8-b2d4-dc3752d20d92&isAliasGcp=false

Also, check out the SoFi credit card. I use it to get 2% cash back on all my purchases which I then use to buy more stocks. Sign up through our link and get $50 when approved – https://www.sofi.com/invite/credit-card?gcp=697cc781-fb37-447d-923c-4ef1c7de6837&isAliasGcp=false

Goodbye 2023

2023 is about to end, so I wanted to do a quick blog post on the year concerning this blog. I also wanted to write about some of the things I am looking forward to for 2024 concerning Finance by CWT.

First of all, I want to thank everyone who has decided to subscribe to this blog. I am determined to turn Finance by CWT into a large stock market research company, and I am thrilled that people have decided to follow a long and read my content. I am determined to get really good at researching stocks as I want to give people the best information possible. I want to provide information to help people find companies to invest in, and I also want to help people find companies to stay away from completely. The point is, I am very thankful for every email subscriber.

Also, a lot of the stocks I wrote about this year have had some big wins which I am excited about. Meta is up 194.13% year to date. That is an insane return. SoFi, the stock I have written about the most and the biggest position in my portfolio, is up 115.84% YTD. Another one of my stocks that I started writing about this year, Ally Financials, is up 42.82% YTD.

In 2024, my goal is to write analysis on a lot of stocks. I want to research a lot of stocks and provide as much information as possible to help people make informed decisions on what to buy. I’m very excited about that. I want to do a pretty good mixture of small, medium, and large cap stocks. I also want to write about some of the investments that I am making. I also want to learn more about other aspects of investing like options trading for instance.

2023 was a great year, subscribe to Finance by CWT by entering your email down below to be a part of our 2024.