An excellent example of the sort of company to avoid!

My post from the Reach4entertainmnet Advfn thread:-

"BrianGeee - With respect, I not interested in reading research by allenbycapital. Surely R4E are a client of allenbycapital and the research is hardly going to be negative is it?

All I need to know is that in the interims the company was loss making, gross margins are poor, cash flow is poor and they have literally nothing in the way of tangible assets. They've had to make a massively dilutive placing to pay off some debt at 1p per share.

I will watch out for the final results with interest, but unless margins, and cashflow improve drastically then this is a company I'd avoid at all costs.

A company like this is too susceptible to economic shocks. It's worthless really unless it can throw off mountains of cash, and grows strongly. It's not doing that, and I doubt that it will in the near future.

What exactly are investors buying here? It doesn't pay dividends, it isn't growing strongly, and it has virtually zero tangible assets.

I'll leave you will this quote:-
"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."
Warren Buffett
Good luck though."

Just one extra thing to add. Personally, I've nearly always found that applying simple metrics is all you need to make good (potentially multibagging) investments.

If you search hard enough, you'll find great little companies that are growing, cash generative, profitable with excellent balance sheets and reasonable p/e ratios. In other words the antithesis of R4E.