....this indicates to me that anyone who builds a portfolio solely of such stocks takes on added risk that such a concentrated portfolio entails.
Well, Paul, I appreciate the heads up on this, but I don't think I'll be building a portfolio solely of these issues. I, too, observed their small cap nature and their extremely low trading volume which means illiquidity. I didn't want to focus on any specific company which is why I didn't print the list originally. Rather, I want to get my thinking and analysing techniques more refined for this type of stock selection, if using a company or two for the purpose of examples is helpful, then I'm all for it.
I have other criteria that I use to build other portfolios, but a discussion of them would not be appropriate here. I have seen some attempts at that here in the past get roundly criticized and feel no need to bring the house down on myself for being off-topic.
I can see your point about the potential for getting lost in the issues, rather than focusing on the performance data, but still, in the context as I read it, reading the filings was to used as a clarifying tool for issues like: What is included in "Other" assets, "Other" liabilities, and whatever hints of business direction and outlook may be gleaned from "Managements Discussion."
Rather than read through the filings on every stock I'm interested in, I find I am better served by reading what the insiders are actually doing - instead of what they are saying.
Are you referring to insider stock transactions only, or do you have some other source also in mind?
Regarding WAKB, although my calculations have it at around a 32% discount to liquidation value as I calculate it(the lions share of the valuation coming from the "Net Hard Value" of the equation due to large "Intangible" and "Other" assets, which I haven't researched the filing on), I am concerned by their .8% net profit margin in a slowing economy. They reduced their dividend from .29 in '98 to .15 in '99 and I wonder how long they can pay at all if competition heats up, as it's sure to do in a tightening economy. |
