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Serial Acquirer
Guiding Principle:
Acquisitions hiding weak fundamentals.
Key Questions:
Are acquisitions masking poor organic growth or financial deterioration? Is acquisition accounting hiding expenses or serial write-offs?
Guiding Principle:
Acquisitions hiding weak fundamentals.
Key Questions:
Are acquisitions masking poor organic growth or financial deterioration? Is acquisition accounting hiding expenses or serial write-offs?
Breaking Growth
Guiding Principle:
Growth slows causing re-rating. Is slowdown temporary?
Key Questions:
What is the catalyst?
Guiding Principle:
Growth slows causing re-rating. Is slowdown temporary?
Key Questions:
What is the catalyst?
Breaking Estimates
Guiding Principle:
Sudden cuts in sales or earnings estimates
Key Questions:
Are the cuts warranted? Is the issue(s) temporary?
Guiding Principle:
Sudden cuts in sales or earnings estimates
Key Questions:
Are the cuts warranted? Is the issue(s) temporary?
Suspicious Overearners
Guiding Principle:
Margin improvements are unsustainable or fraudulent
Key Questions:
Sustainable? Cyclical pull-back?
Guiding Principle:
Margin improvements are unsustainable or fraudulent
Key Questions:
Sustainable? Cyclical pull-back?
Earnings Quality
Guiding Principle:
Unsustainable or artificial earnings.
Key Questions:
Does accounting hide material weaknesses? Catalyst?
Guiding Principle:
Unsustainable or artificial earnings.
Key Questions:
Does accounting hide material weaknesses? Catalyst?
Liquidity Risk
Guiding Principle:
Insufficient cash to meet debt or operating loss cash needs.
Key Questions:
Will company run out of cash? Can they refinance?
Guiding Principle:
Insufficient cash to meet debt or operating loss cash needs.
Key Questions:
Will company run out of cash? Can they refinance?
Solvency Risk
Guiding Principle:
Company is unable to overcome debt
Key Questions:
Will company run out of cash?
Guiding Principle:
Company is unable to overcome debt
Key Questions:
Will company run out of cash?
