1. Has the company performed well consistently?  |
 |
| HOW SLR SCORES: |
| • |
SLR's return on equity has dipped below the Printed Circuit Boards industry's average ROE over the last five years. |
|
|
| WHAT TO LOOK FOR: |
| • |
You may want to examine SLR's management and their strategy. |
Grade = FAIL
|
|
|
2. Has the company avoided excess debt? |
 |
| HOW SLR SCORES: |
| • |
SLR's long-term debt/shareholder's equity ratio has risen above the Printed Circuit Boards industry's average within the last five years. |
|
|
| WHAT TO LOOK FOR: |
| • |
Buffett
believes that a business should achieve good returns on equity while
employing little or no debt. You should be sure that SLR isn't using
leverage to boost returns. Review management's discussion of the
company's financial condition in SEC filings to see how executives plan to use debt to grow the company. |
|
Grade = FAIL
|
|
|
3. Can managers convert sales to profits? |
 |
| HOW SLR SCORES: |
| • |
SLR's net profit margins have fallen below the Printed Circuit Boards industry's average over the last five years. |
|
|
| WHAT THIS MEANS: |
| • |
Buffett
has observed that companies with high-cost operations typically find
ways to sustain or add to their costs. Every dollar spent unwisely
deprives the owners of the business of a dollar of profit. Recent news articles on SLR may tell you if rising costs or other problems are putting pressure on margins. |
|
Grade = FAIL
|
|
|
4. Are managers handling shareholders' money rationally? |
 |
| HOW SLR SCORES: |
| • |
Management has not reduced the number of SLR's common shares outstanding over the last five years. In addition, SLR does not pay dividends. |
|
|
| WHAT TO LOOK FOR: |
| • |
SLR
may be reinvesting cash it needs in order to grow its business. This
only makes sense if the company can invest in projects that earn
returns above the cost of capital. |
|
Grade = FAIL
|
|
|
5. Has management actually increased shareholder value? |
 |
| HOW SLR SCORES: |
| • |
Over the last 10 years, investors have created $-0.37 in market value for every dollar in retained earnings. |
|
|
| WHAT THIS MEANS: |
| • |
If a business has employed retained earnings unproductively over the years, the market will eventually catch up and will set a low price on the business. |
|
Grade = FAIL
|
|
|
6. Has the company consistently increased owner earnings? |
 |
| WHAT'S MISSING? |
| • |
In
order to calculate the growth in owner earnings, the Warren Buffett Way
strategy requires positive earnings in each of the last five years. SLR
has had zero or negative earnings in one or more of the last five years. |
|
Grade = FAIL
|
|
|
7. Is the stock selling at a 25% discount to intrinsic value? |
 |
| WHAT'S MISSING? |
| • |
Both
historical earnings and estimated future earnings are either negative
or unavailable for SLR. As a result, a positive intrinsic value cannot
be calculated since SLR's future cash flow is uncertain. |
|
Grade = FAIL
|
|
The Warren Buffett Way strategy overall interest level for SLR: No Interest
According
to the criteria recommended by Robert Hagstrom for The Warren Buffett
Way strategy, SLR merits no interest at this time. SLR has passed less
than six of the seven steps based on Warren Buffett's investing
philosophy.
View a list of stocks meriting strong interest using Robert Hagstrom's The Warren Buffett Way strategy.
|
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