Practical Uses of Inventory Accounting

Inventory accounting methods help report cost information to management and investors. They don't directly affect the physical management of the inventory operations. Yet, these methods can provide insights to general consumers of the financial world and investors.

Delaying Bad News

Disclaimer: The views expressed here are mine and may change without notice. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing. Please see important disclaimers here and here.

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Defined Benefit plans are things of the past for most people. But, not for investors. Roughly 20 companies in Dow 30 and more than 300 companies in S&P 500 indices still have such plans. Thus, these companies need to record pension expenses in financial statements. A company’s management uses various assumptions in calculating pension expense. What is the impact of these assumptions on the company's profits? Can these assumptions tell something about management? Let's look here.

Representation crisis

As I wrap up the current earning season, I find that my confidence in reported numbers doesn't increase. Inaccurate representation about current business operations and future prospects keep showing up in corporate earnings reports.

Amortization Accounting

Blindly following conventions is the enemy of reality. When companies or investment professionals add back certain expenses such as stock-based compensation they want you to accept concepts that are dangerously defective.

Investment Process: Evaluating Management through Press Releases

A company's management has two primary responsibilities: running strong operations and allocating capital wisely. However, businesses inevitably experience periods of ups and downs. It is during periods of weak performance that management’s true character is revealed. Since assessing management is a critical part of my investment process, press releases can sometimes serve as a valuable tool in this evaluation.

Bank of America: The Best of Large US Banks

Disclaimer: The views expressed here are mine and may change without notice. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing. Please see important disclaimers here and here.

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Banks buy and sell money which is a relatively simple business. However, we continue to see bank failures whether it was the savings and loan crisis of the 1980s or the 2009 financial crisis, to name two. The primary culprit has always been the asset side of the balance sheet, meaning, what does the bank DO with the money is of prime importance. Thus, assessing the lending-related downside risk for a bank is far more important than upside when assessing opportunities.

Security Analysis - Chapter 34

Security Analysis by Benjamin Graham and David Dodd was first published in 1934. It is a fundamental book for serious students of value investing.

Helix Energy Solutions (HLX)

Disclaimer: The views expressed here are mine and may change without notice. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing. Please see important disclaimers here and here.

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I am looking for businesses trading at a discount to intrinsic value where management is actively working to close that gap. Helix Energy Solutions seems to fit this framework. The company operates specialized vessels that provide offshore oil producers with services such as production enhancement, well decommissioning, support for offshore renewable projects, and related activities. At current levels, the stock embeds a meaningful margin of safety.

Security Analysis - Chapters 35 and 36

Security Analysis by Benjamin Graham and David Dodd was first published in 1934. It is a fundamental book for serious students of value investing.

Importance Of Shareholder Base

Imagine a corporation, A, that owns long-term, stable rental units, but whose shareholders are predominantly day traders. Can the managers of such a corporation have fearless nights?

MasterCraft Boat Holdings (MCFT)

Disclaimer: The views expressed here are mine and may change without notice. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing. Please see important disclaimers here and here.

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Once again, I am drawn to a company in a disliked and overlooked industry—a branded boat manufacturing business operating within an oligopolistic market with strong business economics.