MindMap Gallery Investment Opportunity

Investment Opportunity

This mind map helps you to find investment opportunity and explore the truth of investment.

Edited at 2020-10-10 07:16:39

Fiona_

Investment Opportunity

Fiona_

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Investment opportunity

Risks

what if no/less growth?

consumption change? disruption? substitution?

what if margin contraction and high leverage?

what if increasing competition?

no strong entry barriers?

what if disruption?

what if opposing regulations?

what if promoter mis-alignment?

Peer Overview

market share?-geography/product/overall

strategies?

margin profile?

capital allocation?

strengths/weaknesses?

management?

competitor

Valuations

EV/EBITDA

EV/CFO

Investment Rationale

Growth seeming robust

Market not pricing strong future developments

market underpricing durability of consistent growth

operating leverage not priced in-hence favourable upside-downside ratio

Hypothesis

Growth story?

Margin Expansion?

Operating Leverage?

change in management?

changing trends?

Scale of opportunity?

Moat?

Deeply undervalued?

Management

Equity dilution

Salaries

Guidance and execution in sync?

Promoter search for any cases/frauds

Inter-related party transactions?

ROE/ROCE?

Cash Flows?

Capital allocation & rationale?

Financials

What is the story?margin expansion/revenue growth/product mix

Revenue growth

Volume Growth? why & product mix

Realization increase? pricing power?

Profitability Growth

Operating Leverage?

Raw material decrease? sustainable?

Margin Expansion

Gross margin? why?

Operating margin? why? Leverage?

IS-BS-CF in sync? link them

Sum of cash flows and net profits?

CFO to EBITDA?

Increase in assets and their components?

Is book value increasing?

Is fixed asset increasing?

Is working capital decreasing?

Is debt increasing?

Is equity being diluted?

cash flow and their components?

is CFO shown high and others CFI & CFF low?

CFO and its components?

Turnover ratios?

Due diligence of financials-ARs & checklists

Tax as % paid?

Excise duty paid?

Sum of CFOs and Net profits?

Growth of revenue vs growth of working capital?

Intangibles on balance sheet?

Leverage?

Equity dilution?

Return Ratios/Cash Conversion/Leverage

ROCE? ROE?

Net margin? Turnover? Financial Leverage?

Incremental ROCE?-Important

WC growth? WC turnover? Cash conversion cycle?

Fixed asset turnover?

Gross & Operating & Net margin?

Revenue & Profit growth?

Debt to Equity? Interest Coverage?

CFO to EBITDA? Stable?

Book value to inventory & recievables?

Tax as % paid?

Capital Allocation

Towards gross block?

Towards working capital?

Debt reduction?

Building cash?

Dividends?

Acquisition?

Industry Analysis

Porters Forces

Entry Barriers?

Brand visibility?

Difficult to replicate?

Limited access to resources

Regulatory barriers-license/patents?

First mover advantages?

Knowledge/skilled value creation?

Network effects?

Competitive intensity?

Substitution risk?

Consumer bargaining power?

Supplier bargaining power?

Current status-market share/players etc.

competitive structure & reasons for the same?

Level of Organized/unorganized market share

Differentiators

Industry growth and profitability

Potential market size

Growth of market and current size?

Profitability?

Fixed asset and working capital intensiveness?

Capital allocation happening in the industry?

competitive structure

Any threat from current disruptions?

4Ps

Product?

Potential?

Predictability?

People?