Professor Glen Arnold

Joseph Piotroski published academic work showing nine accounting variables were useful in differentiating between those firms whose share returns are negatively affected by potential financial distress and those that are likely to outperform based on a good score regarding financial distress indicators. The indicators fall under three headings: (1) Profitability; (2) Leverage, liquidity, and...

J Smart (LSE:SMJ) is a family-run firm.  John M. Smart worked 50 years for the company and dominated it for the 29 years to 2017 as Chairman. He presided over an almost unbroken record of profit. John M. Smart has now retired, but his legacy lives on, in terms of extreme conservatism on the balance […]

Clearly J Smart (LSE:SMJ) has more money than it knows what to do with – see yesterday’s newsletter.  The money in bank accounts, shares and other liquid assets is generally not needed for operations. Indeed, the investment property holding division could easily take on some borrowing to finance itself and/or add to the cash pile […]

J Smart (LSE:SMJ), as well as holding a large portfolio of industrial units and offices to rent out has money stored in bank accounts, in stock market shares, in land and in half-finished buildings.  I regard this capital allocation as if it were to a business largely separate from the core property holding division (see yesterday’s […]

At one time J Smart (LSE:SMJ), the Edinburgh-based family-controlled property company, concentrated on being a constructor of commercial property for other organisations. Today, that business is diminishing after years of losses. Now the main attraction for share investors is the large collection of industrial units and offices it owns and rents out in the Scottish […]

I’ve bought J Smart (LSE:SMJ) at 125.3p for my Net Current Asset Value portfolio.  Market capitalisation is 42.4 shares x £1.253 = £53m.  I estimate its net current asset value, NCAV at £96m.  It is consistently profitable and has a very low-risk balance sheet. The lion’s share of its assets are industrial properties (e.g., modern […]

Lloyds Banking Group’s (LSE:LLOY) main business can be simplified to taking in customer deposits through Halifax, Bank of Scotland and Lloyds and then lending that money out, mostly for people buying houses but also for credit cards, unsecured personal loans, for buying cars, for businesses. At any one time it has about £410bn – £450bn […]

Yesterday’s Newsletter pointed out that Lloyds’ current share price of 41.69p (LSE:LLOY) is only 9.9 times underlying earnings averaged over the last ten years.  At face value, it therefore seems cheap if we assume merely that EPS over the next ten years will match those of the last ten. However, there are reasons to believe […]

I’ve bought shares in Lloyds (LSE:LLOY) at 41.69p (Market capitalisation £29.4bn).  The group, which also owns Halifax, Scottish Widows and Bank of Scotland, seems on a low price relative to proven earnings over the last ten years, and it has a strong balance sheet providing plenty of downside protection. While its shares have risen from […]

In the early 2000s Joe Brandon and Tad Montross really turned around General Re. In thirteen of the next fourteen years between 2003 and 2016 this part of Berkshire reported an underwriting profit – see Figure 10.6. It did so on a decreasing level of business: premiums fell from $8.25bn in 2003 to only $5.64bn […]