Classic value investors avoid financial firms such as Fairpoint Group (LSE: FRP) for the very plain and simple reason of an exceptionally weak balance sheet. Quite apart from Fairpoint being listed on AIM here at Shares and Stock Market financial firms have a special risk category that makes them a no-go area due to the historical instances of cavalier boards of financial … [Read more...] about Fairpoint Group: Why I Avoid Financial Stocks
Goodwill And Intangibles
it is the most aggressive and risky purchase within the portfolio and success or failure rests with the board and their ability to drive the business forward whilst maintaining the integrity of the balance sheet. This is what I had to say about it St Ives the last time I bought a position and today St Ives announced a property sale to the tune of £5.7 million which they will … [Read more...] about St Ives (LSE: SIV) Reduces Net Debt But There Is Still More To Do
This contrarian investing malarkey certainly goes against human nature. I mean you see a business' share price like St. Ives (LSE: SIV) today get a hammering by the market and instinctively you buy stock. Well at least I do. Call it madness if you like but that's the way it goes here at Shares and Stock Markets. The thing is I'm not sure how much more contrarian … [Read more...] about St. Ives Shares Gets Smashed By The Market, So Naturally I’ve Bought Some At 125p
Far be it from me to hold a grudge but I thought I'd take a look back at one of the worst businesses that an investor could ever hope to plough money into: Savannah Resources (LSE: SAV). The last time I had a look at this value destroying entity the share price had plummeted over 15% in one day. But that is small fry when you consider Savannah's previous … [Read more...] about Savannah Resources – Up To It’s Old Tricks
Anybody who bothered to read last Thursday's RNS from New World Oil (LSE: NEW) would surely have run a mile from management's attempt to remain on life support by way of a placing and an open offer. This is desperate and unsurprising given the dire state of New World Oil's business operations: The past two year period has been a difficult time for the Company. The … [Read more...] about New World Oil & Gas: Just Who Are They Kidding?
I remember we owned stock in Schenley back in 1960 or so when it was selling below working capital. I went to talk to their treasurer. At that time, their stock was selling at $20 and they had $33 of working capital, including a huge inventory. I was asking how good their inventory was. In the course of our conversation, he said, "We've spent $100 per share on … [Read more...] about Walter Schloss On Book Value
When I last covered Kibo Mining (LSE: KIBO) in April, one of the issues raised was the massive amount of intangibles: The intangibles make up the vast majority of assets and frankly they are not worth the paper they are written on: what good is an asset if it leads to operational losses, technically that makes it a liability. 20 April, David Thomas Yesterday's annual … [Read more...] about More Balance Sheet Baloney From Kibo Mining
The AIM listed Kibo Mining Plc (Ireland) (LSE: KIBO) describes itself as a Tanzania focused mineral exploration and development company. I'm picking on Kibo today because of it's 54% price rise as a result of today's RNS announcing the signing of a Joint Development Agreement in respect of 'the Rukwa Coal to Power Project.' A Chinese company called SEPCO III is to … [Read more...] about Kibo Mining – More AIM Balance Sheet BS
Yesterday's RNS from Gulf Keystone is a good example of a company trying to publish any good news it can to divert attention away from the fact that it is losing $60 million a year and is at the mercy of it's bondholders. At the risk of being accused of talking up my own book, I do think that yesterday's RNS is a non-event and that lower prices are inevitable when you … [Read more...] about Gulf Keystone’s RNS Full Of Smoke And Mirrors
A reader has tweeted: @djthomas Is any chance to make a tutorial about how to determine Free Cash Flow (FCF) from financial statements on your website? — Manoz Joshi (@ManozJoshi) June 2, 2013 I like a challenge and so I'll get straight into it. Free Cash Flow - A Quick Tutorial The problem starts with just which free cash flow formula you would like to … [Read more...] about Free Cash Flow – Part 1
Microsoft are the worst investors in the world. The news wires today have announced that Microsoft has written off $6.2 billion mostly related to its 2007 aQuantive Inc. acquisition. Microsoft paid $6.3 billion in 2007 for Aquantive that Microsoft valued five years later at $0.1 billion due to the $6.2 billion write off. Let's see how not to invest in companies. How … [Read more...] about Do You Make This Classic Investing Mistake?