Professor Glen Arnold

Samuel Heath (LSE:HSM) has been consistently profitable, but has it produced good returns on net tangible assets? Also, given the strong link between a company’s return on net tangible assets over the long stretch and share performance will it be enlightening to estimate intrinsic value using return on net tangible assets data? To answer these […]

It is important to examine Samuel Heath (LSE:HSM) with an income metric better than conventional profits after tax. Normal earnings fail to properly consider the annual cash outflows which end up being spent on more fixed assets and on working capital items (inventory and receivables in particular) just to support the current strategic market position, […]

Samuel Heath (LSE:HSM) is a Birmingham metalworker turning lumps of brass into bathroom fittings and door handles – and charging high prices for top quality. For two hundred years has been dominated by the Heath family. Even today 79% of the shares are “not in public hands”, with most of those owned by various family […]

While Samuel Heath (LSE:HSM) has an impressive history of profits for a £5m market capitalisation company (see yesterday’s newsletter) it is going into a period when sales may fall by over one-third. Will it survive? I’ll look at its balance sheet where the largest burden is the pension deficit. The pension liability needs analysis to […]

Samuel Heath (LSE:HSM) is a very old Birmingham manufacturer of brass bathroom hardware (taps, etc) and door handles. It makes those pricier items you see selling through posh bathroom showrooms, etc.   It listed on the stock market way back, in 1890. Since then it has not grown very much, sticking to one factory in the […]

Caffyn’s (LSE:CFYN) has a good history of profits from selling cars and renting property.  It has also managed its property assets well over the years. But now is crunch-time – profits from these activities are likely to disappear for some time.  The question for this newsletter is whether Caffyns is in a strong position to […]

Last week I sold my shares in the Southeast car showroom company Caffyns  (LSE:CFYN) at a significant loss on the £5.01 I paid in August 2017. I have received 52.5p in dividends over the three years but sold the shares for only £2.39 so the loss is 42%. The two main attractions for holding are […]

Harvey Golub, CEO of American Express since 1993, announced in 1999 that he did not want to go on working full-time until he was 65 (he was 60).  His work was done, “ the company is in terrific shape: robust growth engines have been built; our brand and our reputation are stellar; our people and […]

On August 1, 1994, when Berkshire bought its first common stock in American Express, the company’s market capitalisation was $12bn. Was Mr Market too optimistic, too pessimistic or about right? To try to answer I’ll estimate annual owner earnings and, from those derive possible intrinsic values. In the following calculations I make a simplifying assumption, […]

Warren Buffett’s decision to hold on to his American Express shares in 1994 (see the last newsletter) turned out to be a great one. Within five years they multiplied by five.  To date the investment is a twenty-bagger and Berkshire Hathaway now owns $19bn of American Express shares – that is 18.7% of the company. […]