Throwback Thursday – Updated Recommended Reading and Viewing Page

Throwback Thursday – Updated Recommended Reading and Viewing Page

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This is the fifth post in our new Throwback Thursday’s Series, where we share with you posts from the past blogs to bring you as much value as possible.

I’m not posting a ‘normal’ article today, instead I’m posting the updated Recommended Reading and Viewing Page in full below.

Why?

Because one of the questions I get asked most is some version of the question “What are some great books you recommend?”

Well these books, sites and videos are some of the best resources I’ve learned from over the years.

This is the most up to date version of the MOST viewed page on this blog every single year. This update includes 11 new book recommendations.

I know the resources on this post and on the Recommended Reading and Viewing page can help you reach your goals.

Jason

***

Value Investing In Your Car Episode 4 – My Third Daughter Being Born Today

Value Investing In Your Car Episode 4 – My Third Daughter Being Born Today

In Episode 1 of Value Investing In Your Car, I answered the question Does Value Investing Work Anywhere In The World?

In Episode 2, I answered the question – When Does Value Investing Work Best?

In Episode 3,I told you about the best book I read in 2017 along with some other great books I read in 2017.

Today, we’re doing something a bit different and completely unrelated to value investing, finance, learning, business, or anything else we regularly talk about here.

In today’s episode, I talk about my personal life and specifically my third daughter being born today, what that means to me, and how my family impacts my life and everything I do.

I hope you enjoy the 15-minute video below.

Some of the other stuff talked about in this video…

  • The power of value investing and a valuable skill set to change your life.
  • How 3 magic words changed the entire direction of my life and set me on the path I’m still on today.
  • The power of family, drive, direction, passion, and necessity.
  • The need to have something outside of yourself to push you to become your best self.

I’ll post pictures of the newest Rivera child on the blog later as I get time.

I’d love to hear see in the comments below how your family, wife, husband, kids, or an outside force helped shape you and helped you become the person you’re meant to become.

P.S.  I’d love your help naming our new podcast/vlog…If you have a great name please send it to valueinvestingjourneyteam@gmail.com with the Subject Line of Name For Your Podcast/Vlog, so my team knows what the message is about.

P.P.S  If you want to get every post like this in the future please subscribe for free here.

Preliminary Analysis Case Study #1 Part 10 – Final Part

Preliminary Analysis Case Study #1 Part 10 – Final Part – Inventory, Footnotes, And How To Evaluate Management

Last week I announced we were going to begin doing a real-world case study on Constellation Brands – Stock Ticker STZ.

Well, after releasing this post, my team reminded me that there was actually a preliminary analysis my client did before this one. So before we get to the STZ case study, we’re doing to take a detour to talk about Canopy Growth Corp –  Stock Ticker WEED.

I didn’t want to skip this one because there’s a lot of context and talk in this discussion that we don’t necessarily go over in the later training sessions because we’ve already talked about them.

This post is a continuation of the prior posts in this ongoing case study. All parts thus far are below.

Below is his unedited preliminary analysis for reference – without any of my comments – for you to get a  look at.

Canopy Growth Corp – WEED

***

WEED – Canopy Growth Corp (Canadian Company)

All numbers are in millions of CAD unless noted otherwise.

  • FY Ends March 31st, 2017
  • 3,404 market cap (medium)
  • N/A dividend yield.
  • P/B TTM = 4.92
  • TTM Operating Margin is -39.2 and has somewhat increased over last 2 years.
    • 5 year average OM is N/A
  • Share count has done increased from 77 to 119 from FY16 to FY17. Current TTM is 149m.  Statement of shareholder’s equity??
  • Book value per share has increased from 1.34 to 1.55 from FY16 to FY17. Current TTM is 3.73.
  • Morningstar ROIC TTM is -6.58 and a little higher than the last 2 FY’s
    • 5 year average Morningstar ROIC is N/A
  • TTM ROE is -6.45 and a little higher than the last 2 FY’s
    • 5 year average ROE is N/A
  • TTM FCF/sales is -151 and we can’t tell any pattern. See con note on FCF
    • 5 year average FCF/sales is N/A
  • CCC: No info on the payable period (assume the product is cheap to grow) but DIO exploded on FY2017 to 5,494 days (FY2016 and 2015 avg is about 650 days). Research online says cannabis takes up to ½ year to grow so I would need much more investigation on why inventory takes so long to turnover.
  • EV=3,312
  • EV/EBIT is -73.6
  • EV/FCF is -37.6
  • EBIT/EV (earnings yield) -1.3%
  • FCF/EV (earnings yield) -2.6%

Cons

  • Young company – only about 3 years old after name change (used to be Tweed)
  • Note only balance sheet on Morningstar has FY2015 so we need to look at 10K for data.  We cannot really tell any direction with a 2/3 year old history
  • SG&A & Other are over 163% of Revenue
  • SG&A roughly decreasing and “Other” is increasing
  • Op Income and Margin are (-) but are generally decreasing over time
  • Outstanding shares are significantly increasing over time
  • FCF is increasingly negative as both op cash flow and CapEx are also both increasingly negative
  • Not much experience with Canadian companies
  • Goodwill and intangible assets exploded on FY2017
  • Regulation laws in Canada and USA
  • They bought a lot of companies in FY2016

Pros

  • Cash exploded in FY2017
  • FY2017 Cash & Equiv – Total Liabilities = $39m
  • Book value/share is generally increasing but only for last 3 years
  • Low Debt (also reflected by the ROE and ROIC being similar numbers)
  • Revenue is increasing over time
  • STZ bought about 10% interest in WEED.  Industry took notice and WEED most likely gained some legitimacy with large companies
  • COGS is only 23% of Revenue (doesn’t take much cost to grow product?)
  • High Working Capital Ratio = 9.8 but this high typically suggests either too much inventory or not investing excess cash…

***

In this video, we talked more about the inventory, how they’re accounting for inventory in the footnotes, a major issue in its inventory, how to evaluate management, and more.

For some reason, when I talk, the audio cuts out so I’ve added narration to the video above for context.

If you have any comments or questions, please post them in the comments section below and I’ll answer them.

I’d also love to see your preliminary analysis as well, so feel free to post these in the comments below.

If you’d like more information about the coaching program this client is in, go to this page.

For reference, he’s in the $ 10,000, year-long program, and this is only after 1 month of coaching, doing nine 1-hour training sessions via Skype.

P.S. This analysis is based on the preliminary analysis template I developed over a number of years, and after evaluating thousands of companies. If you’d like a copy of this to do your own preliminary analysis, you can get yours for free here.

P.P.S. I put on a FREE webinar last Thursday teaching The 3 Secrets That Have Helped Me Beat Buffett In The Stock Market, so you can possibly do the same. If you’d like to sign up for FREE to view the replay of the webinar, you can do so here.

Preliminary Analysis Case Study #1 Part 9 – NCAV, Major Inventory Issues, and More.

Preliminary Analysis Case Study #1 Part 9 – NCAV, Major Inventory Issues, and More

Last week I announced we were going to begin doing a real-world case study on Constellation Brands – Stock Ticker STZ.

Well, after releasing this post, my team reminded me that there was actually a preliminary analysis my client did before this one. So before we get to the STZ case study, we’re doing to take a detour to talk about Canopy Growth Corp –  Stock Ticker WEED.

I didn’t want to skip this one because there’s a lot of context and talk in this discussion that we don’t necessarily go over in the later training sessions because we’ve already talked about them.

This post is a continuation of the prior posts in this ongoing case study. All parts thus far are below.

Below is his unedited preliminary analysis for reference – without any of my comments – for you to get a  look at.

Canopy Growth Corp – WEED

***

WEED – Canopy Growth Corp (Canadian Company)

All numbers are in millions of CAD unless noted otherwise.

  • FY Ends March 31st, 2017
  • 3,404 market cap (medium)
  • N/A dividend yield.
  • P/B TTM = 4.92
  • TTM Operating Margin is -39.2 and has somewhat increased over last 2 years.
    • 5 year average OM is N/A
  • Share count has done increased from 77 to 119 from FY16 to FY17. Current TTM is 149m.  Statement of shareholder’s equity??
  • Book value per share has increased from 1.34 to 1.55 from FY16 to FY17. Current TTM is 3.73.
  • Morningstar ROIC TTM is -6.58 and a little higher than the last 2 FY’s
    • 5 year average Morningstar ROIC is N/A
  • TTM ROE is -6.45 and a little higher than the last 2 FY’s
    • 5 year average ROE is N/A
  • TTM FCF/sales is -151 and we can’t tell any pattern. See con note on FCF
    • 5 year average FCF/sales is N/A
  • CCC: No info on the payable period (assume the product is cheap to grow) but DIO exploded on FY2017 to 5,494 days (FY2016 and 2015 avg is about 650 days). Research online says cannabis takes up to ½ year to grow so I would need much more investigation on why inventory takes so long to turnover.
  • EV=3,312
  • EV/EBIT is -73.6
  • EV/FCF is -37.6
  • EBIT/EV (earnings yield) -1.3%
  • FCF/EV (earnings yield) -2.6%

Cons

  • Young company – only about 3 years old after name change (used to be Tweed)
  • Note only balance sheet on Morningstar has FY2015 so we need to look at 10K for data.  We cannot really tell any direction with a 2/3 year old history
  • SG&A & Other are over 163% of Revenue
  • SG&A roughly decreasing and “Other” is increasing
  • Op Income and Margin are (-) but are generally decreasing over time
  • Outstanding shares are significantly increasing over time
  • FCF is increasingly negative as both op cash flow and CapEx are also both increasingly negative
  • Not much experience with Canadian companies
  • Goodwill and intangible assets exploded on FY2017
  • Regulation laws in Canada and USA
  • They bought a lot of companies in FY2016

Pros

  • Cash exploded in FY2017
  • FY2017 Cash & Equiv – Total Liabilities = $39m
  • Book value/share is generally increasing but only for last 3 years
  • Low Debt (also reflected by the ROE and ROIC being similar numbers)
  • Revenue is increasing over time
  • STZ bought about 10% interest in WEED.  Industry took notice and WEED most likely gained some legitimacy with large companies
  • COGS is only 23% of Revenue (doesn’t take much cost to grow product?)
  • High Working Capital Ratio = 9.8 but this high typically suggests either too much inventory or not investing excess cash…

***

In this video, we talked more about NCAV valuation, inventory issues, and more.

For some reason, when I talk, the audio cuts out so I’ve added narration to the video above for context.

If you have any comments or questions, please post them in the comments section below and I’ll answer them.

I’d also love to see your preliminary analysis as well, so feel free to post these in the comments below.

If you’d like more information about the coaching program this client is in, go to this page.

For reference, he’s in the $ 10,000, year-long program, and this is only after 1 month of coaching, doing nine 1-hour training sessions via Skype.

P.S. This analysis is based on the preliminary analysis template I developed over a number of years, and after evaluating thousands of companies. If you’d like a copy of this to do your own preliminary analysis, you can get yours for free here.

P.P.S. I put on a FREE webinar last Thursday teaching The 3 Secrets That Have Helped Me Beat Buffett In The Stock Market, so you can possibly do the same. If you’d like to sign up for FREE to view the replay of the webinar, you can do so here.

The Best Book I Read All Year – Value Investing In Your Car Episode 3 – Mini Book Review

The Best Book I Read All Year – Value Investing In Your Car Episode 3 – Mini Book Review

In Episode 1 of Value Investing In Your Car, I answered the question Does Value Investing Work Anywhere In The World?

And in Episode 2 I answered the question – When Does Value Investing Work Best?

In today’s video I’m doing a mini book review of the single best book I read all year – Extreme Ownership: How U.S. Navy SEALs Lead and Win.

It's so great I did something I've NEVER done before after finishing it.
This is the single best book I read all year.

In the short 15 minute video I talk about the following things…

  • Why this is the best book I read all year.
  • Where I first heard about this book from.
  • The powerful lessons I learned about leadership and strategy from this book that I’m implementing in my own businesses.
  • Exactly how great this book is… Hint – It’s so great I did something with this book I’ve never done before.
  • Why I read so much.
  • What are some of the other great books I listened to or read this year.
  • And more.

When was the last time you read a book?  What were some of the powerful lessons you learned from it?  What was the best book you read all year?

I’d love to hear see your answers below so we can all see some more great book recommendations and learn from them.

P.S.  I’d love your help naming our new podcast/vlog…  If you have a great name please send it to valueinvestingjourneyteam@gmail.com with the Subject Line of Name For Your Podcast/Vlog so my team knows what the message is about.

P.P.S  If you want to get every post like this in the future please subscribe for free here.