Investment Research

This category contains 9 posts

Investing in Gold?

I was reading some articles about value investors going into gold (e.g. Khaner, Einhorn). Coincidentally, I just watched Chris Martenson’s Crash Course which is predicting the collapse of the fiat monetary system, which is one main reason why people are buying into gold. One of the most popular ways to playing gold is to buy … Continue reading

Best Document to Read when Starting on a Company

Read the S-1 filing, its the best! =) S-1 is the registration statement filed by a company when it first gets listed – tells you alot about the company. The S-1 typically gets filed before the prospectus (Form 424B) gets available to the public. Note that depending on the type of company, the form might … Continue reading

The Economics and Investibility of the Executive Search Industry

This is a post of a piece that was written on June 6, 2006, while performing some research on the executive search industry. The Economics The Executive Search market concentrates on searches for positions with annual compensation of $150,000 or more, which generally involve board level, chief executive and other senior executive positions. The industry … Continue reading

Analyzing Growth via Acquisitions and Debt

Recently I was looking at John Wiley & Sons (JWA). One of its stated aims is to grow the company by making acquisitions, which it does several times a year. In that situation, revenues, assets, liabilities, equity, etc. will grow as the financials of the acquired company are added onto JWA’s financials. How then do you … Continue reading

On ROIC / ROE / ROA

On why ROIC instead of ROE/ROA: ROE and ROA are distorted due to differing debt levels and tax rates. It does not allow you to measure the true underlying “returns generating capability” of the company. Quoting an example from Greenblatt’s book, you can imagine that you can have Company A that has no debt, and … Continue reading

Determining Excess Cash in ROIC

On top of Joel Greenblatt's definition of ROC in the previous post, Morningstar's Pat Dorsey in his book "The Five Rules for Successful Stock Investing" defined Return on Invested Capital (ROIC) as: Net Operating Profit After Tax (NOPAT) / Invested Capital where Invested Capital = Total assets – Non-interest-bearing current liabilities (e.g. accounts payable and … Continue reading

Earnings Yield and Return on Capital

I picked up a copy of Joel Greenblatt's "The Little Book that Beats the Market" today. In it, it talks about finding cheap companies (high earnings yield) and good companies (high return on capital). The first time I saw a discussion on the importance of high earnings yield, is in Mary Buffett's Buffettology book (1st … Continue reading

Determining the Intrinsic Value of a Business

"How much is this business worth?" is a critical question that one needs to ask, after answering Is this a good business? Is there good management? Typical techniques used to produce that answer, have been a combination of the following: Discounted Cash Flow (DCF), with varying degress of sophistication, Dividend Discount Model, Gordon Growth Model, … Continue reading

Getting Financial Statements into Excel

I was searching around for the best way to download financial statements into Excel. Here's a summary. Free sources: MSN Money – have to use a web query to get it into excel, pretty decent, but due to the standardisation, the breakdown (e.g. of the cash flow statement) might not be as granular as you … Continue reading

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