Armanino Foods (AMNF) Case Study Part 3 – Valuation
Where Most Evaluations Go To Die
In Part 1 of this case study we did the preliminary analysis of Armanino Foods (AMNF). And I determined that it passed what I require on a preliminary basis to continue researching a company.
But I left some questions unanswered from this first post. So I showed you Why The P/E Is Useless – And How To Calculate EV. And explained Earnings Yield in a short video to finish explaining the concepts Part 1 of this case study.
In Part 2 of the case study we dug into the financial statements of Armanino.
In Part 3 of this case study released today we get to its valuation.
At this point I normally download up to 10 years of financials to read about the company. But since this is a case study on a company I’m not likely to write a full issue about, we’ll skip ahead to the next part. All important valuation.
I need to explain something before we get to valuation though.
If you’ve followed this blog for a while you already know what I’m about to say. But for all the new readers this is important to understand.
Each investor’s valuations are different. Even among us ultra conservative value investors our valuations will vary by a huge margin because we all require different things from each investment.
So having said that, below are the valuations I did on Armanino Foods.
Valuation – Where Most Evaluations Go To Die
Most of the time the valuation stage of analyzing companies is where my analysis ends. And this is how the case study on Armanino Foods ends too.
I analyzed my research to see how many companies I invest in after researching them so I could prove the above. And while I knew I invested in far fewer companies than I researched. I didn’t think the numbers would be this low.
I found out that I invest in less than 0.50% of the companies I research.
And this is the main point I want to convey in this last post of the Armanino Foods case study…
If you have good filters and stick to them. You will throw away research on a ton of bad/overvalued companies.
But if you patiently stick to your criteria, over the long-term you will find better companies to invest in. Or as Warren Buffett Said:
So it’s now time to look for another case study candidate. If you have any recommendations let me know in the comments below and I’ll research and do a case study on one of them.