I try to keep things simple .... when one reads that long screed put out by BGS you have to wonder what their ultimate intention is.
If a company's Financials are properly audited then it should be a case of just looking at what is currently pertinent and drawing a few logical conclusions. Generally speaking, the best time to draw conclusions about a company's current "state of affairs" is when it produces its Audited Financial Statements.
It's not really 'rocket science'.
An Industrial type company has a Top Line Gross Revenue coming in as shown on its Income Statement.
As you work your way down that Statement you determine what gets deducted from that Gross Revenue.
And Finally, you arrive at the Bottom Line .... where one wants to see as much of that Top Line Revenue getting there.
And what is left over from that Bottom Line, after possible dividend payment, gets, preferably, added to the Balance Sheet ....., the more the better .....
In BGS's case only between 2% to 4% of its Gross Revenue gets to its Bottom Line. That doesn't leave much "Margin for Error", from turning a slight Profit into a Loss.
If we apply the "Book Value/Share" test that Value Investors like to use, and we do a rough calculation of Book Value based on Total Assets - Total Liabilities, we get 3074 - 2197 = 877mil., based on BGS's latest 10Q.
There are about 65.3mil shares, so BV/Sh = 877/65.3 = ~$13.4/share. Current BGS share price = ~$22/sh > $13.4/sh, so not yet in the "bargain area".
By applying a few pertinent Financial Ratios, as Warren Buffet does, one can get a good idea as to how well a company is doing in its business.
If those Ratios are all good, and the share price performance of the company supports that and is also in a general uptrend, then it's most likely a low risk investment.
IMO, what I've seen of BGS's financials doesn't fill me with a lot of confidence and enthusiasm. And the stock market, in recent times, seems to see it that way as well ....
I get the impression that there are those who see BGS's current share price as its "bottom" and things can only get better from here on. But that sounds to me like "Trading/Speculating" rather than Investing.
How things will look in 3 or 6 months time, or even a year, is anybody's guess.
But, Hey, .... others must invest in whatever they want to invest in based on their own conclusions and decisions ..... |
