When looking for a company to buy, I try to find some of the following characteristics:
- A stock that has fallen out of favor with investors
- A stock that has a major catalyst on the horizon
- A company that has signaled that they are close to a bottom in their business
- A compelling valuation
- A stock that is supported by assets that create a "floor" on the stock
- Insider buying
It's hard to find all six of these characteristics in one stock, but in Ruby Tuesday (RT) you get all of them. This company, due to years of underperformance, has fallen out of favor with investors. My favorite catalyst, a management change, has recently taken place. The...