Investors can’t rely on the income statement and balance sheet alone to tell the whole story of a company’s profitability. Too often, these financial statements can be distorted by accounting rule changes, non-operating items, and other red flags buried in the footnotes. Investors need to analyze the footnotes and management discussion and analysis (MD&A) in order to truly understand the economics of a company.
We first put this stock in the Danger Zone in April 2017. Since then, the stock has outperformed the S&P 500 based, primarily, on the market’s optimism over the company’s