【Earnings 101】How do value investors respond when market fluctuates?

Some companies falsified transactions before going public in order to successfully complete IPO and raise funds as much as possible. Sometimes, listed companies tend to drive up the stock price. The higher the stock price, the higher the previous investors, executives or original shareholders will be able to cash out. Pay attention to the cash flow, debt and other information in the earnings report data, and you can protect your money. Click to learn previous article

In emerging markets, the cradle of leading companies, demand is shaping and the capacity is hard to estimate. Raising competition barriers means that it will be able to occupy more market share in the future. Click to learn previous article

For example, FuboTV, as the first sport streaming media, released its fourth quarter 2020 earnings report on March 2. In the reported quarter, FuboTV acquired Balto Sport to enter sports betting industry and plans to provide free online sports games to enhance its "moat". But for FuboTV investors, they will pay more attention to its paid subscribers, because the amount of paid subscribers and advertising business are two major sources of its revenue.

Value investment is to invest in an enterprise with good prospects, and the primary basis for determining the development prospects of an enterprise is its business model. Buffett also said that a good horse is an essential requirement for a good rider to win. Without a good business model, no matter how good the management team is, they can only offer mediocre results. In interpreting the company's earnings report, the ratio of interest expense to net profit, the ratio of accounts receivable and revenue, and the ratio of inventory to total assets could be evaluated.

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