MeritValue

POTOMAC BANCSHARES INC

PTBSdata completeness 75%3 fiscal years on file

Data notes: no data for concept 'totalDebt'; no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'depreciationAmortization'; no data for concept 'gainsOnRealEstateSales'; no data for concept 'realEstateImpairment'

The thesis, from the filings

POTOMAC BANCSHARES INC earns about 16% on invested capital. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2009FY 2010FY 2011
Revenue$14.9M1$13.9M1$12.6M1
Net income−$2.24M2$1.79M2−$1.01M2
Operating cash flow$1.08M3$5.12M3$4.45M3
Capital expenditure$1.29M4$99,0004$130,0004
Free cash flow (derived)−$212,0003$5.02M3$4.32M3
Total debt———
Cash & equivalents$12.6M5$12.9M5$13.7M5
Diluted shares———

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

iii. Is this a good business?
Moat signal · return on invested capital
16% avg · 3y
FY09 9%FY10 35%FY11 4%

It earned an average 16% on invested capital over 3 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
— shares · 3y

Not enough history to read capital allocation.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0
DCF · Growth Exit 10Y
not applicable
no diluted share count — cannot compute per-share value
DCF · Growth Exit 5Y
not applicable
no diluted share count — cannot compute per-share value
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2009-12-31 · accession 0001206774-12-001258 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2009-12-31 · accession 0001206774-12-001258 (NetIncomeLoss)
  3. 10-K · period ending 2009-12-31 · accession 0001206774-12-001258 (NetCashProvidedByUsedInOperatingActivities)
  4. 10-K · period ending 2009-12-31 · accession 0001206774-12-001258 (PaymentsToAcquirePropertyPlantAndEquipment)
  5. 10-K · period ending 2009-12-31 · accession 0001206774-12-001258 (CashAndCashEquivalentsAtCarryingValue)