racemize Posted August 18, 2012 Share Posted August 18, 2012 Here's the latest blind evaluation. Blank space to avoid spoilers.Blind_Eval_3.pdf Link to comment Share on other sites More sharing options...
woltac Posted August 18, 2012 Share Posted August 18, 2012 Looks like a very disciplined business. Positves: • Long term debt paid off • Buying in shares • No defined benefit pension plan • Steady gross & net profit margin • Steady increase in Sales/share & EPS Would like to see the cash flow statement. Link to comment Share on other sites More sharing options...
racemize Posted August 24, 2012 Author Share Posted August 24, 2012 My thoughts: 1) nice increasing earnings at a good clip, only one drop in 2008 area. However, earnings growth is expected to be significantly less going forward, so I'll take that seriously for valuation purposes. 2) no debt--yay 3) had a period where it didn't have stores, but made money? Not sure what does that. Retail type net profit margins, most of money made at Christmas. 4) book value appears to be significant relative to earnings 5) Following from 4, ROTC/ROE are almost below my threshold for companies, so it would need to be fairly cheap for consideration 6) share count coming down, so buyback in place. Hopefully buying at decent prices. This one needs a lot more qualitative bonuses for consideration, and a good price. I'd say <35 dollars for consideration and assume the market is around 45. Link to comment Share on other sites More sharing options...
racemize Posted August 24, 2012 Author Share Posted August 24, 2012 incidentally, will post answer tomorrow and the next one soon. Link to comment Share on other sites More sharing options...
racemize Posted August 26, 2012 Author Share Posted August 26, 2012 my wife apparently thought it would be funny to throw gamestop at us. This is definitely a case where qualitative outweighs the quantitative. Link to comment Share on other sites More sharing options...
Gopinath Posted August 26, 2012 Share Posted August 26, 2012 Investors today cannot benefit from past financial performance of any investment. I am sure we cannot evaluate business/security by the past numbers alone. The future development counts in a big way! Link to comment Share on other sites More sharing options...
eclecticvalue Posted August 26, 2012 Share Posted August 26, 2012 Investors today cannot benefit from past financial performance of any investment. I am sure we cannot evaluate business/security by the past numbers alone. The future development counts in a big way! Exactly, I first liked the idea and have participated in Distressed Debt Investor's contest but it is hard tell what the future holds from just looking at past numbers. When attempting a valuation, most of the time you will be off. Also you do need to know the industry. Link to comment Share on other sites More sharing options...
Rabbitisrich Posted August 26, 2012 Share Posted August 26, 2012 ^This is a particularly good exercise for exactly that reason. I read an analysis of RIMM where the author listed attractive financial data and then surprised the reader with the name. Yet, you could have done something very similar with LOJN prior to when you couldn't. Link to comment Share on other sites More sharing options...
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