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Charles & Colvard: What Starting My Own Moissanite Jewelry Business Taught Me

Feb. 15, 2023 2:41 AM ETCharles & Colvard, Ltd. (CTHR)15 Comments
Kevin Mackie profile picture
Kevin Mackie


  • Charles & Colvard specializes in the production and sale of moissanite jewelry. Now, so do I. This has given me interesting insight into the company.
  • By my research, Charles & Colvard charges much more for moissanite jewelry than many other destinations, putting them at a price disadvantage.
  • They have serious inventory buildup issues, sitting on millions of dollars worth of stuff with millions more on the way under contractual raw material purchase agreements.
  • I would advise against buying Charles & Colvard in spite of what looks like a low valuation.
Diamond Ring With Silk Scarf

avagyanlevon/iStock via Getty Images

My stock screener led me to a new company a few months ago, a jewelry maker called Charles & Colvard (NASDAQ:CTHR). In an article published here on Seeking Alpha I deemed them worthy of investment due to a

This article was written by

Kevin Mackie profile picture
Value strategies resonate with me, and I don't relegate myself to any sector or industry. You could say I am an equal opportunity investor: if a company meets my investment criteria, I will buy. Big picture, I look for three main things in a stock before I consider it for investment: Does the company have a product or service that will be in demand in the future? Does the company have a demonstrated history of success and are they on solid financial footing today (i.e., a manageable debt load and strong cash flow generation)? Can I purchase their stock for a reasonable price? If I can verify each of these things, I then look at how that company deploys their free cash flow to enrich their shareholders. Capital allocation is key. Money needs to be spent on the right thing at the right time, meaning that debt reduction should be prioritized over a dividend in most instances. Annual reports are also important to find any red flags or factors that strengthen the case for investment. That is the skeleton of my process, and it has served me well thus far. I appreciate engaging in intelligent dialogue with the SA community and look forward to learning with other users.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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