OK, so the last post bar one focused on how I could modify the split of the index to better represent the quality stocks - the different between a capitalisation approach and a fundamental approach. Remembering that I'm trying to create an index, which should be impartial to my feelings or intuition and rely only on data. So far, I'm still unresolved - as I look at the data right now, I have to make an algorithm which compares the losses of 30 companies against the profits of just 3.
At the same time, one of the biggest issues I see is that one of the best looking companies for selling and manufacturing of solar power (Silex or SLX) is also supplier of nuclear fuel processing technology. They are also the single biggest company in the index as it stands today - at around 28% of the index.
So the question I am pondering on this is - do you buy the for the upside or ignore them for the downside?
Or can I add something else into the equation? Sure, if we buy shares in SLX, the investment is in all the business units, but perhaps reviewing the fundamentals might adjust for their relative engagement in nuclear vs. solar - at least scale the 28% down by whatever the breakup of the business was.
I've spend a bit of time trying to understand the company and see where the money comes from or goes to, but it comes back to the same question: which fundamentals do you use to divide things up? Here, we have hardly any choice - the information in the annual report is:
SECTOR : SILEX SSOLAR SOLARS TRANS CHRONO
REVENUE 33% 66% 1% 0% 0%
BOOK 72% 11% 16% 1% 0%
PROFIT $1M -$18M -$6M -$4M -$1.7M
By revenue, SILEX SOLAR and SOLAR SYSTEMS make up the larger share of the company - at 67%, but by book value (assets less liabilities) the make up a small fraction of it (27%). By profit however, is another story altogether - if fact, I can't do a percentage, since they give losses, while Silex systems uranium enrichment technology is providing positive results.
I have to get my head around comparing a profit to a loss as a percentage....
If you support Nuclear energy, check these guys out - it's brilliant that they've maintained the two solar manufacturing businesses that we have here in Australia and it would be great if you could go out and buy some solar panels made in Sydney!!
http://www.silex.com.au/
At the same time, one of the biggest issues I see is that one of the best looking companies for selling and manufacturing of solar power (Silex or SLX) is also supplier of nuclear fuel processing technology. They are also the single biggest company in the index as it stands today - at around 28% of the index.
So the question I am pondering on this is - do you buy the for the upside or ignore them for the downside?
Or can I add something else into the equation? Sure, if we buy shares in SLX, the investment is in all the business units, but perhaps reviewing the fundamentals might adjust for their relative engagement in nuclear vs. solar - at least scale the 28% down by whatever the breakup of the business was.
I've spend a bit of time trying to understand the company and see where the money comes from or goes to, but it comes back to the same question: which fundamentals do you use to divide things up? Here, we have hardly any choice - the information in the annual report is:
SECTOR : SILEX SSOLAR SOLARS TRANS CHRONO
REVENUE 33% 66% 1% 0% 0%
BOOK 72% 11% 16% 1% 0%
PROFIT $1M -$18M -$6M -$4M -$1.7M
By revenue, SILEX SOLAR and SOLAR SYSTEMS make up the larger share of the company - at 67%, but by book value (assets less liabilities) the make up a small fraction of it (27%). By profit however, is another story altogether - if fact, I can't do a percentage, since they give losses, while Silex systems uranium enrichment technology is providing positive results.
I have to get my head around comparing a profit to a loss as a percentage....
If you support Nuclear energy, check these guys out - it's brilliant that they've maintained the two solar manufacturing businesses that we have here in Australia and it would be great if you could go out and buy some solar panels made in Sydney!!
http://www.silex.com.au/
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