Ann: Management Changes, page-22

"Never would I suggest that my statistical analysis was more complete or logical than the providers I mentioned earlier, but what my own analysis offers is consistency (my consistency) of approach across the years for one company together with a consistency of approach when comparing one company's results with another where it's appropriate."

Well said.

The bold bit.... yes, that is the nub of the issue.


"All my data comes for the statutory accounts - nothing from Power Point slides."

Again, a point well-made.

The audited financial statements and the accompanying explanatory notes contain a wealth of vital information and important proxy clues; yet my sense is that very few people (probably not even 10% of investors) even look at the Annual Reports of the companies in which they own shares, let alone read them from cover to cover.


"Before you make up your mind about all of this it may be prudent to see if those students tutored by Adam have to repeat their subject next semester. You've got to ask the hard questions."

The good news for me is that these investment chat sessions are not related to any particular uni subject on which the quality (or lack thereof) of the tutorials will be able to be measured. It's merely 4 or 5 youngsters who have a budding interest in stocks and who are just starting their equity investing journey, meaning the starting base is low. So all care and no responsibility from my standpoint.


However, so that this thread doesn't become a zone of philosophical waffle, back to DCG:

Despite it's very chequered history, I haven't written it off totally as an investment; it's a watching brief because:.

$400m of Revenues juxtaposed against a $25m Mkt Cap

Noteworthy.

It doesn't take much in the way of a few merely half-decent contracts - importantly, combined with no bad contracts - for $15m or $20m of EBIT to materialise from nowhere when no one is expecting it.

In which case the company's market value would be closer to $100m, I think.

So multi-bagger, potentially.

I would be a buyer of the shares today if only the balance sheet was not in such a state of disrepair (certainly in bad shape for a company operating in this industry)

So lots of upside potential but jeez, on the other hand, potential emergency capital raising if they do stand on a landmine, even one that does only a little amount of damage.
There is no balance sheet wiggle room currently.

Therefore I suspect that, one way or another, a capital raising is coming (either because of a landmine or because the company reports some good news and raises on the back of that).

Tactically, I think it is prudent to hold back from investing until the capital raising has happened - for obvious reasons in the case of it following good news.

And in the case of it being done on the back of a favourable report; well, sure the share price might have doubled by then, but I believe that - once properly recapitalised - it would have ample scope to double yet again after that (so still an attractive investment,but without the risk of going teets-up).

That's how I'm playing this one anyway.

For an attractive enough returns, I don't mind taking on a certain amount of risk.
But I want to be able to sleep at nights.

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