Hi MCsweet, It wasn’t the fact that VLXC was an OTC stock that prompted my comments, but rather the fact that a stock had been considered without the means of sensibly analysing it through its financial statements. In my opinion, the "cornerstone" of Value Analysis or Fundamental Analysis is the adequate study of a company’s Financial Statements. It often happens, though, that one cannot find financial statement info for OTC stocks, compared to those on the NYSE and AMEX.
Good to see you doubled your investment with MHCO.
However, why investors should currently want to buy this stock escapes me. Apart from modest percentage T/O increases of 4.1% between 2002 & 2003, and 4.3% between 2003 & 2004, this company has, in my opinion, below standard fundamentals. It’s Operating Margin is a very low 1.6%, it has a massive long term debt to S.H.I. ratio of 1.57, which is eating away at it’s Bottom Line such that its Net Finance Cost to EBIDTA is a huge 38.5%. And it’s only earning a poor 4.8% on its Capital Employed with its Pretax profit. It doesn't surprise me to see it's down from a 3 year high of $4.75 to its current price of $3.60. Anyway, maybe things will improve.
Thanx for the reading tips. Actually I own Security Analysis, The Intelligent Investor and The Interpretation of Financial Statements by Ben Graham and others. Other works which I own and prize are Philip A. Fisher’s ‘Common Stocks and Uncommon Profits’, and Peter Lynch’s ‘Beating the Street’ and ‘One Up On Wall Street’. I haven’t read anything by Dreman. I must look him up.
I can’t say I entirely agree with your contention that Price/Book is one of the best performing value attributes for stocks. However, I’ll be replying to Paul Senior’s message in this regard.
bruwin. |
