Intuitive investing: how to spot a firm to avoid
There are some warning signs that make it unnecessary to even look at financial statements, writes Robert Laing
Trying to identify winners by reading financial statements is extremely difficult, something even talented experts manage to get right maybe only half the time. Weeding out losers, on the other hand, is fairly easy. Often, you don’t even have to bother looking at what a deadbeat company’s financial statement says. Just looking at when it appears gives you all the warning you need. A topical recent example to illustrate this is the Gupta-family-owned Oakbay Resources & Energy. Its results for the year ended February 28 were released on June 2. An immediate red flag here is that Oakbay missed the JSE’s three-month deadline by two days. The JSE typically gives companies a month’s leeway before issuing a statement saying: "The JSE advised that [insert company name here] has failed to submit provisional reports within the three-month period stipulated in the JSE’s Listings Requirements. Accordingly, the company’s listings on the JSE TradElect system have been annotated with an "RE" to in...
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