I think that’s a dangerous practice. It takes at least 1-2 weeks of regular 3-4 hours of reading every day just to familiarize myself with a new company. If it’s an industry I already know, maybe it will be a little easier.
The simplest and most effective practice is just to start with two things:
- Time Series Analysis (Compare your own company numbers with its historical numbers)
- Competitive Analysis (Compare your company’s numbers with the closest competitors)
While doing these, you should make note of areas you do not understand fully (Ex: “Why is my company earning less Margins than the industry’s average Margins?”). Once you’ve got all your questions, you can try to find answers from the Annual Report, Concall Transcripts, Management interviews and so on. If you can get an insider from the industry to answer some of your more generic questions about the inner workings of the industry, that would round it up nicely.
I don’t see any way in which this will take just a couple of days. This will take weeks, if not months.
Hatsun is an excellent company with a vast array of familiar brands. But they have levered themselves up to the neck and ruined their Balance Sheet. Even now, after a recent massive round of equity dilution, their D/E is still above 1.25. On top of this, their Interest Payments are almost equal to their PAT.
If they have poor business for even 1-2 years (Not saying they will), their B/S will further worsen. This means that Hatsun’s managers are very interested in short term profits to keep the treadmill running. They cannot afford to take even small risks in terms of innovating new products or capturing new markets (Again not saying they won’t - but the leverage is an inherent discouragement).
Hatsun would have been my first choice had it not been for the leverage.