Professor Glen Arnold

With owner earnings we’re trying to obtain the earnings that, in future, would be left for shareholders after the managers’ use of the cash generated to pay for items of expenditure to maintain the strength of the economic franchise, maintain unit volume and to invest in all value-generating projects available. Depending on circumstances, the owner […]

Piotroski analysis focuses on the likelihood of financial distress by examining trends or current states of nine accounting variables. I’ll examine Character Group (LSE:CCT) on both the annual figures and on the half year figures. The first factor is profits Character Group has not had an unprofitable year for at least ten years. It was […]

In the last two newsletters we noted that Character Group (LSE:CCT) has an impressive history of earnings and dividends.  Today we ask if that is built upon a shaky balance sheet and poor cash flow. Balance sheet data £m   Feb 2020   Aug 2019   Feb 2019   Aug 2018   Aug 2017   […]

Character Group (LSE:CCT), the toy creator and distributor has an impressive history of earnings and dividends despite recent falls.  Its shares are trading at 230p – 252p and market capitalisation is £2.52 x 21.36m shares = £53.8m. Earnings and dividends Half year to end February Earnings per share, p   Dividends per share, p   […]

I have bought more Character Group (LSE:CCT) shares at a price of £2.52 for my Warren Buffett-style portfolio.  It specialises in designing toys, arranging for them to be manufactured in the Far East and then selling them to retailers (such as Argos), mostly in the UK and Scandinavia. I first bought these shares in October […]

In the last few newsletters we’ve lookedat the USAir case study to try to discern general lessons for less experienced investors than Warren Buffett. So what can we take away? If the industry economics are appalling, then walk away. Despite the excellent yield on the preferred stock Buffett came close to losing the entire investment because […]

Having presided over USAir loses cumulating to $2.4bn in 5 years Seth Schofield led the company back to profits in 1995.  But, unfortunately, he had still not gained enough concessions from the intransigent unions to give any surety of future profits.  The Washington Post commented that ironically the first sight of a profit became a problem because […]

When USAir’s Ed Colodny retired in Summer 1992 – three year after Buffett had bought preferred shares for Berkshire Hathaway –  his chosen successor, Seth Schofield, became Chairman as well as CEO. Schofield had come through the ranks, starting at 18 as a ramp agent: loading bags, selling tickets and boarding aircraft. He was a popular […]

When judging the value of a share, a bond or a business Buffett encourages us to go back to basics as set out in John Burr Williams’ book The Theory of Investment Value (1938) and to see value being determined by estimated future cash inflows and outflows, with each forecast net cash flow for a period being […]

In 1989 Warren Buffett’s Berkshire Hathaway bought $358m of preferred stock in USAir. It took only months for the airline’s managers indicate that losses were going to be made in both 1989 and 1990.  That news sent the common stock to around $30, far below the $60 required to make it worthwhile for Berkshire to convert […]