Newbie Do's & Don'ts

[timhyma]

RIGATONI- I completely agree with you. The filings hold a wealth of information on a company.

I like to pay attention to the legal matters in the 10-K- as this is where a lots of problems can be seen. i.e. vendors not being paid, patent infringements, outright getting sued for making bad choices, etc..


I use http://www.nasdaq.com/ as a source to get them. just plug in the symbol and hit info quotes. Next hit company filings, then select the report you want (either 10-Q or 10-K for this message).

Here is one to look at (VTSI)to show the risk invovled (I own a small position already)-
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001162327%2D03%2D000067%2Etxt&FilePath...

First thing is look at the balance sheet- notice the cash on hand in the assets? Concern number 1- no cash (which increases risk)

Next look at liabilities- slight incease over last year (and book overdraft liability?) concern number 2- are they paying their debts (more risk added, imo).

Next is stock holder deficit- aproximately 9 million shares added to the outstanding (totals 46% of authorized). Not serious dilution, but shows they could be using stock to pay the bills, which brings the price per share (pps) down, making it less attractive in some cases.

Not going into the accounting parts of this- but look at cash flow. This will answer some of the above concerns, along with the managers discussions.

Gramps- hope this helps a "newbie" <g>.