About Instructura

The current analysis and trading patterns in the stock market often place excessive emphasis on a few key short-term metrics, such as EPS and revenue, particularly on a quarterly and year-to-date basis. Several news outlets have noted that this focus tends to disproportionately reward the top 1-2 companies while penalizing others.

This creates significant challenges for growing companies, making it difficult for them to balance public expectations with their long-term growth strategies. As Jamie Dimon pointed out, while the stock market overall has performed well, the number of IPOs in 2023-2024 has remained low, largely due to these obstacles.

Jeff Bezos: “When somebody … congratulates Amazon on a good quarter … I say thank you. But what I’m thinking to myself is … those quarterly results were actually pretty much fully baked about 3 years ago. Today I’m working on a quarter that is going to happen in 2020. Not next quarter. Next quarter for all practical purposes is done already and it has probably been done for a couple of years.”

Just as P/E-related metrics were foundational in Benjamin Graham’s school of thought, in today's environment of inflated P/E multiples, investors and traders are more informed and attuned to a sector’s potential than ever before. This heightened awareness often leads to hyped growth expectations, driving up share prices when potential is identified.

Unlike traditional analysis, which relied on a fixed set of metrics, we incorporate Behavioral Science, Forecasting, and AI into our fundamental analyses to adapt to the evolving mindset of traders and market trends. We anticipate that as prominent perspectives solidify into market trends, the methodologies used for analysis will need to evolve accordingly.

From our past analysis, we have identified several well-managed companies that were undervalued by investors due to a more constrained focus on short-term metrics, despite their strong long-term prospects. Additionally, value traps are often misinterpreted and hyped as having enormous upside potential, driven by speculation. We remain committed to using our methodology to uncover well-managed companies that are frequently misunderstood by the market.