VituVingiSana wrote:Mangs wrote:It's very difficult to bother with financial statements if your interest in the stock market is speculation in bid to make a quick buck. Most investors never bother to understand the basic business models of companies in the long term and that's why many sold off the likes of Safaricom shares a few years ago when they were at Ksh. 3 in spite of the fundamental health of the company. As far as FTGH goes, people just need to dig deeper to understand the business model. Only then shall we see the potential within.
[And management]
Looked at the Summary FS (not detailed enough) and my thoughts are;-
1. Good revenue growth
2. Positive cashflows
3. Debt seems well managed with good Debt/Equity ratio, Quick ratio and Interest coverage ratio.
4. Dealing in basic consumer products. Ready market in a growing population.
My concerns -
1. Still a young company
2. Concentrated ownership and management, corporate governance and transparency likely to be an issue
3. Growth by leveraged acquisitions. Listed entity is an holding company. company is growing by acquiring other firms as opposed to organic growth and brand development. Firms that grow by acquisitions have a tendency of overestimating the synergies of acquisition. One acquisition gone wrong can wipe out prior gains.
4. Unclear strategy, whether going for mass market or niche products. For now, it looks like the former. That market depends on volume and can get quite crowded.
My verdict:
It's a speculative buy for quick capital gains.
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