[Hollyshiit]

thanks for the feed back guys..

As for myself, I tend to follow the value approach. It usually takes me a only few mins of analysis of the financial statements, (Balance sheet and Cashflow first then the income statement after) before making my decision if i should proceed with and dig further with this company.

IF it is a company of interest

i tend to look over the B.S. Whether the company is debt burden. If the current working capital can cover its short term debt. ie. if the company has an abrupt down turn in earnings, will it be able to survive. Then i would derive in to its historical data, to compare its ratio. For example, totalling the 5 years avg p/e p/b, p/s, peg , asset turn, inventory turn, AR ratio
etc and see how the company is performing in regards to its current status. i would then ask myself, if the company is selling below its avg ratios.

I would then run a what is called common size balance sheet approvach . meaning listing all of the asset and liablity in components in percentage and compare it to its competitors. this method gives me a bird's eye view of how the companies uses its asset and liabitities to generate income compare to its competitors and its total enterprising value in precentage

The next step would be running an analysis on the cashflow statment. I would ask myself if the company in question is generating positive cash flow. Does it generate enough cash flow to cover its future expansion. What is the return on asset ratio, return on shareholders equity. Is the management allocating its capital efficently? how is it allocating its capital ?? what is the precentage?? compare to its competitors. has this percentage been growing or at least staying stagnant. Has the top line and bottom line been growing? (actually this belong in the income statement but whatever) Is the company in question using debt to finance its operations. has the company been issuing shares? what is the avg public offering a year, how is the stock options compensation struture like?? compare to its competitors??

Finally would be the income statement. I usually would run a common size income statment approach as stated above. i would then ask myself, what is it gross margin compare to cogs. how much is it spending staff and administration. what is the precentage of net income compare to its rev. has he company been trying to trim of its fat to stay lean. etc


finally, i would run a few valuations for example, dcf (if the company sells product that is preditable.) run a valuation call nav ( it require tweeking on the b.s and thinking if another competitor is to enter this line of business, how much ultimatly would it need to spend to run the operation same as the company im looking over) Epv, which is a way of valuing a companies avg 5-7 years of earning without looking into growth factor to see how much the company is worth, Also, some basic mutiples valuations for example multiples compare to its pe, bv etc.

After which i would get a pretty good idea of whether this company is actually selling below what is worth, using some TA to look for an entry

haha i could go on and on about this but this is the skin of it. hopefully, this approach can generate me some good rewards for the long term. it usually takes me about 4-5 hours to run an analysis on the companies.

companies that i find quit interesting at the moment. mov,csr, uta,wh

feel free to look into it and give me some feed backs

pls correct me and feel free to put in any inputs on my train of thoughts on analysis on companies. hope this can help some of the people who are looking in growing their wealth in the stock market.

Remember, as Warren stated. " I wouild rather be approximatly right then precisely wrong"

Cheers

Hollyshiit