Three numbers we check every Friday
A five-minute routine that catches more problems than any earnings model.
This issue is free for everyone. It is the routine we recommend to new subscribers before they read a single research note.
Most investors do too much analysis at the wrong moment: right after a stock moves. The better habit is a small, fixed routine at a fixed time, so that the analysis is not contaminated by the price.
One: gross margin, in dollars
Not the percentage — the dollars. A company can hold a margin percentage while both revenue and gross profit shrink, simply by shrinking. Dollars reveal whether the machine is getting bigger.
Two: share count
Diluted shares, year over year. If it climbs faster than revenue, the growth is being bought with your ownership. This single line has saved us from more attractive-sounding stories than any other.
Three: the cash conversion of one large customer
Receivables days for the biggest customer cohort. When a business is extending terms to keep growth looking good, this number moves first — well before any management commentary admits a problem.
That is the whole routine. It is not clever, and it does not predict anything. It just makes you the person who notices.