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Company name Comdisco Holdings Company, Inc.
Stock ticker CDCO
Live stock price [stckqut]CDCO[/stckqut]
Confident Investor Rating Poor

“Comdisco Holding Company, Inc. (Comdisco Holding) was formed for the purpose
of selling, collecting or otherwise reducing to money in an orderly manner
the remaining assets of the Company and all of its direct and indirect
subsidiaries, including Comdisco, Inc. The Company’s business purpose is
limited to the orderly sale or run-off of all its remaining assets. Comdisco
Holding Company, Inc., as the successor company to Comdisco, Inc., emerged
from bankruptcy effective August 12, 2002. Pursuant to the Company?s first
amended joint plan of reorganization, Comdisco, Inc. emerged as a wholly
owned subsidiary of Comdisco Holding. Since emerging from bankruptcy
proceedings, the Company has focused on the monetization of its remaining
assets. Prior to the bankruptcy, Comdisco, Inc. provided technology services
worldwide to help its customers maximize technology functionality,
predictability and availability.”

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. It is not possible to confidently invest in a company that is not currently profitable.

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This is a series of articles describing how to quickly understand the key aspects of the annual report from a company that you have invested in with your hard earned money. This series started with an overview post on November 30, 2010.

The slow read

Now it is time to sit back and read the annual report slowly over the next few weeks. You know that you have already hit on the high points that are going to cause real concern. After you have looked at the previously described 7 items a few times, that entire exercise should take you no more than 20 minutes. Now you can spend time trying to truly understand the company and its revenue model.

It is important that this is a slow read. You don’t want to invest in a company that you don’t understand. When you read the report now, use a highlighter to mark important items. Take notes in the margins. You want to be a truly informed investor and be able to think about how the various actions by the market, global politics, and general business news will affect this company that you own. You should trust your managers to run the company effectively but you now have the opportunity to understand how and why they should be reacting to market conditions.

You don’t need to go into this depth for every report that the company puts out. Rather, once a year plan to spend several hours digging into the company via the annual report. This is your opportunity to really understand this company. It is your money, you need to be confident in your investment in this company.

Here are the links to all 9 posts of the series:

  1. The 7 critical items to read first in an annual report in 20 minutes (Part 1 of 9)
  2. The 7 critical items to read first in an annual report in 20 minutes (Part 2 of 9)
  3. The 7 critical items to read first in an annual report in 20 minutes (Part 3 of 9)
  4. The 7 critical items to read first in an annual report in 20 minutes (Part 4 of 9)
  5. The 7 critical items to read first in an annual report in 20 minutes (Part 5 of 9)
  6. The 7 critical items to read first in an annual report in 20 minutes (Part 6 of 9)
  7. The 7 critical items to read first in an annual report in 20 minutes (Part 7 of 9)
  8. The 7 critical items to read first in an annual report in 20 minutes (Part 8 of 9)
  9. The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)

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Company name Tier Technologies, Inc.
Stock ticker TIER
Live stock price [stckqut]TIER[/stckqut]
Confident Investor Rating Poor

“Tier Technologies, Inc. (Tier) is a provider of biller direct electronic
payment solutions, through its primary brand Official Payments. These
solutions provide payment services via multiple channels, including the
Internet, automated Interactive Voice Response (IVR), call center and
point-of-sale (POS), environments. Its solutions include multiple enhanced
payment services, including convenience fee payments, absorbed payments,
payment reminder and automated payment scheduling. It also offers its
clients a range of payment choices, including credit and debit cards,
electronic checks, cash and money orders, and emerging payment methods to
meet the needs of their customers. Its segments include Electronic Payment
Solutions (EPS) and Wind-down operations. ”

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. It is not possible to confidently invest in a company that is not currently profitable.

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This is a series of articles describing how to quickly understand the key aspects of the annual report from a company that you have invested in with your hard earned money. This series started with an overview post on November 30, 2010.

7. Dividends

I typically do not like dividends. There are truly bad companies on the market that use dividends to keep their stock holders satisfied rather than using that money to grow the company and create long-term growth. Also, I buy a stock when its price is growing and sell it when the market is moving against the stock; therefore, I may miss a dividend payout in order to preserve my capital during a market correction. When you become addicted to dividends, you lose the perspective that the company may not be performing adequately or you may be tempted to stay with a stock during a price correction that ultimately erodes your investment cash.

I personally prefer that the company keep its dividend to a minimum and use its cash to grow the company faster. This will cause the stock price to appreciate in the long term. Your investment strategy may be different though.

Even though I don’t make my decisions based on dividends, it is important to understand what the company is doing regarding dividends. The annual report is the communication vehicle for the management of the company to tell you, the owner, how much you will be receiving for your dividend check.

You need to be comfortable with this payout. Is it adequate? Is it hurting the other investments the company could be making? Is it increasing enough to fit your goals?

Here are the links to all 9 posts of the series:

  1. The 7 critical items to read first in an annual report in 20 minutes (Part 1 of 9)
  2. The 7 critical items to read first in an annual report in 20 minutes (Part 2 of 9)
  3. The 7 critical items to read first in an annual report in 20 minutes (Part 3 of 9)
  4. The 7 critical items to read first in an annual report in 20 minutes (Part 4 of 9)
  5. The 7 critical items to read first in an annual report in 20 minutes (Part 5 of 9)
  6. The 7 critical items to read first in an annual report in 20 minutes (Part 6 of 9)
  7. The 7 critical items to read first in an annual report in 20 minutes (Part 7 of 9)
  8. The 7 critical items to read first in an annual report in 20 minutes (Part 8 of 9)
  9. The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)

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Company name ResMed Inc.
Stock ticker RMD
Live stock price [stckqut]RMD[/stckqut]
P/E compared to competitors Fair
MANAGEMENT EXECUTION
Employee productivity Fair
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good
ANALYSIS
Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $51.22
Target stock price (averages with growth) $70.95
Target stock price (averages with no growth) $54.32
Target stock price (manual assumptions) $44.58

“ResMed Inc. (ResMed), is a holding company for the ResMed Group. The
Company, through its subsidiaries, is a developer, manufacturer and
distributor of medical equipment for treating, diagnosing, and managing
sleep-disordered breathing and other respiratory disorders. Sleep-disordered
breathing (SDB), includes obstructive sleep apnea (OSA), and other
respiratory disorders that occur during sleep. It has developed a number of
products for SDB and other respiratory disorders including airflow
generators, diagnostic products, mask systems, headgear and other
accessories. Its manufacturing operations are located in Australia,
Singapore, France and the United States. Major distribution and sales sites
are located in the United States, Germany, France, the United Kingdom,
Switzerland, Australia, Norway and Sweden. On October 1, 2009, it acquired
100% of Laboratoires Narval SA. Laboratoires Narval manufactures and
distributes a mandibular repositioning device (MRD). ”

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.