Case Study #2 of an Excellent Investment Thesis: SGDE

The professor already handed out Case 1 (NVR) which was posted here:http://csinvesting.org/2011/12/10/case-study-1-of-an-excellent-investment-thesis-nvr/

Now for Case 2 (SGDE): http://www.scribd.com/doc/75498797/SGDE-Example-of-a-Clear-Investment-Thesis

Links to the annual report and 10-Q are at the end of the document. You may wish to read and value the company BEFORE reading the write-up to test your valuation skills.  Again Charlie479 presents a clear and compelling investment thesis.

To brush up on reading a 10-K go here: How to read a 10-K by the SEC http://www.sec.gov/investor/pubs/reada10k.pdf

I like to simply follow this guy’s advice:http://www.youtube.com/watch?v=BJS_zTnUiBc&feature=related

SHOW ME THE MONEY! SHOW ME THE MONEY!

  1. Is this a good business by ROIC, ROE, ROA?
  2. What is it? Sales, profits, cash flows growing, slowing, declining, volatile?
  3. Debt? How much and what terms?
  4. How is management compensated and do they have skin in the game?
  5. Do I have a hope of understanding this business?

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