wearmanyhats

I run the stock screener every so often when checking for deals, and have been watching one issue periodically:  Firstplus Financial Group (FPFX).  Today I lingered on the financials and started to notice some things that made my ears perk. 

First, there is a dividend being paid.  That normally would denote something positive happening in a company.  Then, the company is reporting a quarterly profit, compared to the last three quarters.  That seemed good.  I looked at charts, I looked at financial statements, I looked at insider trading, which is where I found a good amount.  Could it be, I wondered, that Firstplus is just getting through some hard times?  Are they regrouping, starting over?  Is there something going on we should all know about?

And then I looked at a little section on Morningstar.com called “company profile.”  It said, “Firstplus currently does not have any operations.”  Ooops!  Glad I looked around!

But then I got to wondering, why would insiders be buying the stock?  And why hasn’t it been delisted if there aren’t any operations?  And how could a company still be selling stock if it didn’t have operations?  All of this puzzling led me to the company website, a place I normally don’t go.

Now, folks in the investor relations department can say what they will about checking out a website, but I find most information will be slanted toward buying the stock.  I would think most investor relations personnel are there to promote the stock, not make it look bad. So I don’t spend much time at the company website unless I have a really good reason.

It seems that Firstplus is still on the pink sheets, and is appointing new people to its board of directors.  It has a subsidiary that it oversees, so there is life somewhere.  I had remembered that there had been a Chapter 11 at one time for Firstplus.  Now it seems to be emerging from that problem, or at least there are stirrings.

It is too early for Firstplus to be invested in unless you have a few thousand laying around that you don’t know what to do with.  But if you do have that kind of money laying around just waiting to throw away, you certainly can send it to me.  I’ll at least give you good stock advice.  There’s no telling what you will get from Firstplus’ holdings. 

All joking aside, the research I did reminded me how dilligent a stock picker must be.  If I hadn’t checked that one little paragraph, I might have just picked up a thousand dollars  worth, and put myself into a very risky situation.  There will be a lot of these shadows of former stocks lingering around the stock screeners.  We must remember that now, more than ever, due dilligence is critical.

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