Alignment and governance filters
- Insider ownership sweet spot: 5-30 percent; enough to care, not enough to steamroll minorities.
- Board independence: at least one truly independent financial expert.
- Related-party transactions: small, disclosed, and arm's length—or avoid.
Balance-sheet strength filters
- Cash/liabilities comfortably above 1.0x.
- No near-term debt maturities that require new equity.
- Clean audit opinions with no going-concern language.
Operating quality filters
- Gross margins stable or improving despite price pressure.
- Operating cash flow not chronically negative.
- Customer concentration monitored and disclosed.
Process to apply
1) Start with price <= two-thirds of adjusted NCAV.
2) Run quality filters above; drop names that fail two or more.
3) Re-rank survivors by discount depth and catalyst visibility.
4) Size larger in high-quality subset; basket the rest or skip.
Internal links and tools
- Balance-sheet events: Shares outstanding changes
- Volume tell: Interesting volume events
- Price pressure: Near-lows scanner
- Sentiment: Short interest changes
- More reading: Resources hub
Compliance note
This guide is educational and not investment advice. Do your own research or consult a professional adviser.