Petrogress Inc. (PGAS)

[ShortsFail]

Weekend DD. A Warren Buffet styled “Investment checklist.”

I like to do more DD on the weekends so I dug up this investment checklist for something to do while the market is closed and we have some down time.

I thought I'd throw this out there for those who want to participate and add in details about $PGAS and make this a work in progress. If it works out, maybe it can be a "sticky." If it sucks, then feel free to pass on by.

It's broken down into four "tenets."

(Feel free to PM a copy to me if you added anything and you want me to format it or anything else.)


I. Business tenets
1. Is the business understandable?

2. Do you know how the money is made?

3. Does the business have a consistent operating history?

4. Does the company have favorable long term prospects? ?

5. Is there a big moat around the business (a high threshold of entry)?

6. Is it a business that even a dummy could make money in?

7. Can current operations be maintained without too much needing to be spent?

8. Is the company free to adjust prices to inflation?

9. Have you read the annual reports of the main competitors?


II. Management tenets
10.Has the management demonstrated a high degree of integrity (honesty)?

11.Has the management demonstrated a high degree of intelligence?

12.Has the management demonstrated a high degree of energy?

13.Is management rational?

14.Is management candid with shareholders (evidence in the past of open disclosure to the shareholders when there have been problems)?

15.Has management resisted the temptation to grow quickly by merger?

16.Has management the strength not to follow the institutional imperatives ( avoid following current business and sector fads)?

17.Has the business been free of a major merger in the last 3 years ( many merger failures come out of the woodwork within this period)?

18.Are stock options tied to SMT performance rather organisation’s performance?

19.Are stock options treated as an expense?


III. Financial tenets
20.Is the return on equity adequate?

21.Is the company conservatively financed?

22.Has the company had a track record of earnings growth in most years above the stock market average?

23.Are the profit margins attractive (better than industry)?

24.Has the company created at least one dollar of market value for every dollar of earnings retained?


IV. Value tenets
25.Is the value of discounted earnings greater than the current market value?

26.Have you discounted at a rate equal or greater than the 10 year bond rate (risk free rate)?

27.Have cash flows been based on net income?