While Financially Analyzing Businesses (esp Small Leaders), this is THE Order:

- Cash Flow Statement (Focus on Operating Cash)
- Cash Position

- Balance Sheet Strength
- Never Miss Receivables

- P&L

Cash >> Balance Sheet >> Finally P&L

#FI

More from Valuation

June's research paper: Intangible Value ✨

Can value investing strategies be improved by adding intangible assets?
👾 The Asset-Light Economy
🔮 The Dark Matter of Finance
🏰 Intangible Moats
📉 The Disruption of Value
👨‍🎓 Fixing the "Value Factor"

(Not investment advice)

🧵

(0/10) Full paper here 📘

Blog
https://t.co/omtrn9kfvt

(1/10) The Asset-Light Economy 👾

“The four largest companies today by market value do not need any net tangible assets. They are not like AT&T, GM, or Exxon Mobil, requiring lots of capital to produce earnings. We have become an asset-light economy."

- Warren Buffett

(2/10) The End of Accounting 🧮

“The constant rise in the importance of intangibles in companies’ performance and value creation, yet suppressed by accounting and reporting practices, renders financial information increasingly irrelevant.”

- Baruch Lev and Feng Gu

(3/10) The Dark Matter of Finance 🔮

While intangible matter holds the financial universe together, it is not visible to the naked eye. Unstructured data contains info on intangibles but is large, noisy, and resistant to standard statistical analysis.

Sajal Kapoor
@unseenvalue

Doesn't matter what's the market cap is - micro or large, the quality of any business is never unseen. You screen through the last 5-10 years of balance sheet and cash flows and you'd know what can and cannot compound wealth. Narrative alone is useless. Numbers have to match.

Josh Khalili
@josh_khalili

1/ @mjmauboussin's book Expectations Investing is a masterclass in valuation & strategy

His framework uses price-implied expectations to assess companies, an elegant way to invert valuation

https://t.co/kESplMN3nW

To practice these concepts, I wrote a case study on Chipotle⤵️

2/ Chipotle is the leading fast casual restaurant chain across the US, with almost 3,000 owned & operated locations

They benefit from strong unit economics and a trusted brand

We'll discuss consensus estimates, competitive landscape, and expected

3/ We must first identify the price-implied expectations based on key value drivers

After finding the consensus estimates, investors can seek opportunities in the expectations - looking for a divergence from the market's assumptions

Let's start with Chipotle's sales growth

4/ Chipotle has grown revenues from $3.9B to $7.55B over the past 5 years, at a 5 year CAGR of 14.1%

Analysts estimate a 13.7% consensus growth rate based on 5-7% same store sales growth, 8% additional store openings per year, and steady digital sales contribution

5/ Next is operating profit margin, which measures profitability from core operations

Chipotle has slowly been growing its margin, now at 10.67%

Analysts expect high margins of 15.75%, with incremental profits from digital orders and unit-level margin growth contributing

Vijay Pillai
@vijaypillai

@_soniashenoy Agree with you on the potential. Tata has got the pricing and the models quite right in comparison to the other options available in the market.

Tijori
@Tijori1

Reverse DCF calculator is now available on Tijori

You can edit the earnings field, discount rate and terminal multiple to any value you like. Below is an example of Astral Pipes

Hope its useful to gauge optimism being baked into the current price!

https://t.co/Y6iV8LVLzT

Starting my 2nd thread on Sringeri Parampara. This will cover the Jagadgurus after Sri Vidyaranya to Sri Shivabhinava Nrisimha Bharati.

It is really very tough to match the brilliance and achievements of Vidyaranya. After whom came 15 - Chandrashekara Bharati [1386-1389].

The next Acharya was Nrisimha Bharati [1389-1408]. Harihara raya found a town for this Acharya - Narasimhapuram. Acharya helped the king by guiding him in political affairs. He also initiated the kind with mahamantras for spiritual development.

Subsequent Acharyas were
15-Puroshottama Bharati [1408 - 1448]
16-Shankara Bharati[1448 - 1455]
17-Chandrasekhara Bharati II [1455 - 1464]
18- Nrisimha Bharati II [1464 - 1479]
19-Puroshottama Bharati II [1479 - 1517]

20-Ramachandra Bharati [1517 - 1560]. Sadashiva Raya was emporer of Vijayanagara during this time.
21-Nrisimha Bharati III [1560 - 1573]
22-Nrisimha Bharati IV [1573 - 1576]
23-Nrisimha Bharati V [1576 - 1600]

24-Abhinava Nrisimha Bharati [1600-1623]. When he visited Malahanikareswara temple for first time he noticed there was no Vinayaka there so he took piece of turmeric and drew outline of Ganesha on a pillar and offered puja.

Aditya Todmal
@AdityaTodmal

A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.

I am quite different from your style. I follow the market's volatility very closely. I have mock positions in 7-8 different strategies which allows me to stay connected. Whichever gives best profit is usually the one i trade in.
— Sarang Sood (@SarangSood) August 13, 2019

2. Theta falls when market moves.
Falls where market is headed towards not on our original position.

Anilji most of the time these days Theta only falls when market moves. So the Theta actually falls where market has moved to, not where our position was in the first place. By shifting we can come close to capturing the Theta fall but not always.
— Sarang Sood (@SarangSood) June 24, 2019

3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.

This week has been great so far. The main aim is to be in the right side of the volatility, rest the market will reward.
— Sarang Sood (@SarangSood) July 3, 2019

4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.

There is a difference between theta decay & fall in vega. Decay is certain but there is no guaranteed profit as delta moves can increase cost. Fall in vega on the other hand is backed by a powerful force that sells options and gives handsome returns. Our job is to identify them.
— Sarang Sood (@SarangSood) February 12, 2020