Have some thoughts on screener tools lately. Many investors bind themselves with unnecessary rules like OPM > 20%, low debt, positive cash flows, high promoter holding etc. They filter stocks on screener with above parameters and buy already discovered business which may or may not generate returns.
SG mart on the other hand has razor thin margins of ~2% to begin with. To a casual investor scrolling screener it will look like trading at the lower end of the spectrum. In fact, razor thin margins is probably their biggest moat. No small or medium player can disrupt their business for the foreseeable future. On screener the promoter holding shows 36% which has declined from 75%. Again this would look like owner jumping ship but nothing can be further from the truth. If one looks at FY25 cash flow statements they will see a distressed business unable to generate cash and eating up available reserves. Screeners can generate all sorts of bias to an investor whose primary goal should be making money. Steel as commodity is a complex business which I swore to never touch but interestingly organized steel trading done by sg mart is a simple and easy to understand business (maybe the management makes it look easy).
To conclude almost all major indicators would scream red flags at sg mart on screener and one would walk away from the get go. While in reality this business has the potential to go 10x. Screeners as a tool to filter stock cannot be relied upon always.