Professor Glen Arnold

I’ve bought the very unloved N Brown (LSE:BWNG) on a cyclically adjusted price earnings ratio of around 6.  The market has a pile of doubts, not least about the difficulty of selling of clothes in the highly competitive UK market.  Retailers seem desperate enough to lower margins to keep sales coming in. But N Brown is […]

I’ve bought N Brown shares (LSE:BWNG) at £1.42 for my Modified cyclically adjusted price earnings ratio portfolio. This online retailer – with some legacy paper catalogue business – has seen its shares fall from around £6 four and half years ago to £1.42 today. Outline of what they do They specialise in fashion for the […]

In the years 1978-1982 both the Buffalo Evening News and the Courier-Express suffered large losses as they lowered prices in attempts to attract readers and advertisers in an over-supplied market.  The outlook was bleak for both.  Until, that is, the breath-taking announcement on September 19 1982 by the owners of the Courier-Express that they were quitting, leaving the News as the only...

Buffett and Munger inherited two sound managers when Blue Chip Stamps took over the Buffalo Evening News.  First there was Henry Urban who served as president and publisher from 1974 until his retirement in 1983.  Urban provided a steady, conservative approach to stewarding the organisation during a particularly tumultuous period.  He had no problem with switching […]

Buffalo in the late 1970’s may have been a town down on its luck, but for newspaper publishers it had one major virtue: a great deal of stability in the population – people born and bred in Buffalo were loyal to the place, and its institutions, such as its historic newspapers. Another virtue, for an […]

By 1976 Berkshire Hathaway was already a substantial shareholder in The Washington Post – holding about a tenth of the shares – and Buffett had become a close personal friend of the dominant shareholder and publisher, Katherine Graham. He was also a director of the Post. Graham tells us in her biography that in the mid-1970s she was […]

Warren Buffett’s investment in the Buffalo Evening News is an example of his calculated risk-taking on the possibility of a business with a poor economic franchise being turned into one with a brilliant franchise and superb returns on capital employed.  At the very least, we learn from this case the need for long-term thinking based on the soft science […]

The family do not control Caffyns plc (LSE:CFYN) through ownership of more than 50% of the ordinary shares, of which there are 2.69 in issue. They control the firm mostly through their holding of all the 2m 6% Cumulative Second Preference Shares, which each have the same voting rights as the ordinary shares (one vote […]

I’ll use Piotroski’s nine variables to think about the potential for financial distress hitting Caffyns (LSE:CFYN). Is the company profitable? In the year to March 2018 Caffyns made £1.03m profit after tax from continuing operations, therefore it gains a Piotroski point. Does the company produce positive cash flow from operations? In recent years Caffyns has […]

Caffyns (LSE:CFYN) operates from 13 locations selling and servicing cars from seven different manufacturers.   It holds the freeholds of large plots in towns south of London, therefore it has valuable real estate. The book value of property stated on the balance sheet has been understated for years.  Each year the annual report tells us that property […]