On the surface, it looks horrible, but that's a good thing. It should look like that before a turnaround. But I need to look deeply to see what exactly they are doing differently than in the past. In their Q3 report, I see them cutting costs, improving marketing, and refocusing. But honestly, I do not buy that. The question to ask: Have they materially altered their business model? Why has the company been unable to grow more than double digits in their top line in the past, and where does the management see future growth coming from? In other words, cutting costs and refocusing are not good elements of a good turnaround. I would need to dig deeper, but online retail is a hard nut to crack. Is there something specific that attracts you to the business?
This a good question to ask. But if it just a turnaround to 20-30$, I‘m fine too. Maybe another one that fits your criteria better is Shelly (ISIN: BG1100003166). I think it fits most of the criteria from your 100 Bagger-list. Which is awesome by the way. They grow fast…maybe a bit too expensive at the moment.
Always dig into the cash flow statement - profits are opinions, but cash is a fact. This insight alone could save investors from painful mistakes when evaluating tech stocks, especially in today's market.
Great points in your article!
Reminds me of Charlie Munger's famous quote:
“Every time you hear EBITDA substitute it with 'bull**** earnings''
Many things attract me to the the business e.g.:
Hard facts
- High Cash, no debt
- Asset light, high Return on asset in the past
- Short Term cost cutting
- Low PE
Soft facts
- New CEO
- Strong Brand (as far as I know, because I‘m living in Germany)
I see the company min. trippling within the next years.
Thx for the post. What do you think about PetMed (ISIN: US7163821066). I guess it could be a nice turnaround...
On the surface, it looks horrible, but that's a good thing. It should look like that before a turnaround. But I need to look deeply to see what exactly they are doing differently than in the past. In their Q3 report, I see them cutting costs, improving marketing, and refocusing. But honestly, I do not buy that. The question to ask: Have they materially altered their business model? Why has the company been unable to grow more than double digits in their top line in the past, and where does the management see future growth coming from? In other words, cutting costs and refocusing are not good elements of a good turnaround. I would need to dig deeper, but online retail is a hard nut to crack. Is there something specific that attracts you to the business?
Many things attract me to the the business e.g.:
Hard facts
- High Cash, no debt
- Asset light, high Return on asset in the past
- Short Term cost cutting
- Low PE
Soft facts
- New CEO
- Strong Brand (as far as I know, because I‘m living in Germany)
I see the company min. trippling within the next years.
That indeed looks good on the surface! I might have to take a second look. I would try to determine where future growth will come from.
This a good question to ask. But if it just a turnaround to 20-30$, I‘m fine too. Maybe another one that fits your criteria better is Shelly (ISIN: BG1100003166). I think it fits most of the criteria from your 100 Bagger-list. Which is awesome by the way. They grow fast…maybe a bit too expensive at the moment.
When looking for a good opportunity, when in doubt, move on to the next company.
One thing is certain. Nobody knows the future and we are all just guessing. 🙂
Amen 😇
Bookmarking this for future reference. No short, not long, just as it should be. Thank you!
Thanks! Finding the right length for these articles is a continous journey...
Always dig into the cash flow statement - profits are opinions, but cash is a fact. This insight alone could save investors from painful mistakes when evaluating tech stocks, especially in today's market.