fundamentals anyone following, page-8

Hi Kiril,

I am never comfortable with any investment however my comfort grows when I focus on the numbers from the company.One of my rules is to invest in companies where the directors have a significant holding in the company even more so when the company is small.A directors holding can never be relied on in its own right but is a box to tick off.Also the company must have a profit history or be close to producing a profit.Lets look at the debts note 19 of FFF which total $74 million of which the banks are owed $45 million and directors owed $29 million.The banks would have first option as the note states secured so Tony Wales would rank after the banks.They have an operating cashflow of $7.6 million as of last year so a descent operating cashflow.Actually if they owed the banks the full amount I would not be interested.I had FFF on a watch but did not go into the company until the recent full year result.I was surprised that someone valued at over $300 million was involved then again the amount put in by Tony Wales is less than 15% of wealth.There are positives and negatives.As you say we are taking a risk but I am taking a calculated risk with FFF.