Our reports emphasize the analysis of the main risks attached to the subject company, risks in terms of business strategy, but also credit risk and dilution risk, with a significant emphasis on earnings quality. In order to understand the risks attached to the subject company, we perform a strategic analysis as part of our diligence process. … Read more
Bad earnings quality can be an unintentional outcome, and therefore, we are not judging management intentions but judging the reliability and sustainability of the reported figures. This is not an exhaustive list of all the things we look for when performing an earnings quality analysis, we adapt to circumstances: First, how can we understand the … Read more
We arrive at a valuation by estimating future cash flows discounted with a cost of opportunity rate of return: for a given level of acceptable risk, what are the sensible rate of returns available in the market? We allow for a margin of error, this is a margin of safety. The margin of safety aims … Read more