About the blog
The research published on this blog aims to outline the factors that underpin the durability of cash flows earned by a particular business.
To do this a specific research approach is applied when analysing a business. This research approach, which is continuously in development, is as follows.
The first step is to understand what a business fundamentally does, i.e. what it produces and provides for customers, whose demand gives the business a purpose to exist.
The next step is to understand the market structure the business is operating within to understand how the business can protect its activities from competition. This gives an indication of how well a business can price its products or services without reference to cost, or more simply put, its pricing power.
The analysis then aims to work out what factors of the business allow it to protect itself from the now known competitive forces. These factors can range from a lock on distribution, a large asset base or scale in general that allows it to smother competitors, or it can be a common product that is provided with such precision and attention to detail that others simply can’t compete.
It is the quality of each factor that the research approach aims to eventually understand, as these factors underpin the long-term cashflow margin between making and selling a given product. Any growth potential provided by these factors is seen as a potential bonus on which an investor will have a claim.
Ultimately the quality of this margin, and how it is priced, will determine any opinion about a company.
About the Author
Drawbridge Research is a personal investment research blog for sharing ideas and my thought process.
I created the site because I enjoy unpacking companies, what they do, reading through their financial reports and also determining how accurately they are priced.
The site allows me to share my work and to get in touch with individuals who enjoy a similiar research process.
I hope readers of my posts will find it as enjoyable to read as it was for me to research and write.
Please feel to get in touch if you like, or even better, disagree with any work posted.