“Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.” Warren Buffett
I stumbled across a number of companies which could be promising opportunities. Some highlighted by readers of my blog.
- NXP Semiconductor (A major player in Near Field Communication for mobile payment. Even Apple has it in its Apple Watch.)
- Volkswagen (Recent share sell down due to the diesel emissions scandal)
- Diageo plc (DEO) (It produces, markets, and sells alcoholic beverages worldwide. A good dividend stock as it has managed to increase dividends for 15 years in a row)
Each has a compelling reason for me to buy them. However, upon reading into the financials of each of these companies, I realized that there are a number of red flags.
- Erratic and inconsistent ROE and ROIC over the years (in the case of NXP and Volkswagen) – See below.
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