Weekly 10-K: Supreme Industries 10-K [2015/5/29]

Supreme Industries came to my investment screen. Let's see if it is worth doing additional due diligence. This is not an investment recommendation. This post contains the notes that I took while reading a 10-K. The purpose is to show how I process 10-Ks and how I think about investments.

Please do your own due diligence.

Notes:

1. 40 year in business. Produces commercial truck bodies, trolleys,

2, Reinstated dividends. This is good.

3. Increasing backlog and cash.

4. Creates trucks within 4-8 weeks after the receipt of orders Fiber panel is light weight and durable, lowering operating costs.

5. There is intense competition with local firms. Business is cyclical and seasonal. I can see large body shops competing with Supreme.

6. Supply chain risk due to Chassis from GM and Ford.

7. Violation of noncompliance to environmental laws and potential product defect claim.

8. Idle facilities...

9. Firm has high insider ownership and low leverage.

10. No imminent red flags in the numbers.


Assessment:

It is an competitive industry and it does not seem to have a moat. Insiders own 25% of the firm and leverage is low so there is no imminent bust.

Given that there is no moat and that no catalyst could occur unless there is a major improvement in the business cycle, Supreme Industries is a pass.




*from Floating Forests