BRASKEM SA

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 3✗ 32▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)3/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)4/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)10.0%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-1.4% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-1.6B

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)3.17

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR21.1%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROEN/A (negative equity)

  ✗Lynch> 15%

  EBIT / Enterprise Value-2.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-2.7%, ROC=-3.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-11.14%

  ✗PiotroskiROA > 0

  ROA Change YoY-4.99% -> -11.14% (delta: -6.15%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=2.40%, ROA=-11.14%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY4.3% -> 7.7%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-22.9%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity

  ✗Dreman> 12%

  Margin of Safety

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity19.5% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency4/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-1.4%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend4.4% (2022) -> -1.4% (2024)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 11.8% -> 7.7%, operating margin 4.4% -> -1.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-717.64%; #5998/6340 (top 94.6%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+5.90%; #3060/3702 (top 82.7%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0918; #3365/5884 (top 57.2%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR21.1% over 4 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years3/6 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Debt & Leverage0% pass✗ 15▾

  All 12 investors flag BAK's debt & leverage

  LT Debt vs Net Current AssetsLT Debt $8.2B vs NCA $1.4B

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: N/A (negative equity), IC: -0.2x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / EquityN/A (negative equity)

  ✗Lynch< 0.33

  Cash - Long-term Debt$-5.8B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change43.83% -> 50.16%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.31

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt LevelsN/A (non-positive equity)

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-0.2x, D/EBITDA=13.8x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Valuation0% pass✓ 3✗ 25▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-2.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-2.7%, ROC=-3.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)1.3x

  ✓Dreman< 8x

  Price / Book Value per ShareN/A (negative BVPS)

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-321.3%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-84.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical Average

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low100% of trailing low ($1.13)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-717.64%; #5998/6340 (top 94.6%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization-3.0316; #6172/6449 (top 95.7%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-163.6%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+49.0753; #122/5247 (top 2.3%)

  ✓OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-84.06%; #4017/4519 (top 88.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-70.11%; #5663/6202 (top 91.3%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth13% pass✓ 4✗ 9▾

  7 of 8 flag BAK's growth — Graham, Lynch, Marks +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR21.1%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -14.2% vs Rev: -13.9%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$-0.16 (2016) -> $3.16 (2021)

  ✓DremanPositive over recent years

  EPS CAGR21.1% CAGR over 4 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency4/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-13.9%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency1/2 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 11.8% -> 7.7%, operating margin 4.4% -> -1.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-0.8%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR21.1% over 4 years

  ✗Neff7%-20% annualized
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag BAK's efficiency — Graham, Greenblatt, Piotroski +4 more

  Current Ratio1.31

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)10.2%

  ✓Buffett> 10%

  ROIC - WACC+0.2%

  ✓BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-3.0%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.53 -> 1.31

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.77x -> 0.76x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.31

  ✗Dreman> 1.5

  Return on Invested Capital-1.8%

  ✗Munger> 15%

  ROIC (high and growing)FY2022: ROIC=unavailable; FY2023: ROIC=-4.8%; FY2024: ROIC=-1.8%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)1/4 years above 12% (latest -1.8%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts13% pass✓ 2✗ 14▾

  Split decision: 13 FAIL · 2 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (2/9)✗LynchFAIL (2/7)✗GreenblattRank #1941✓PiotroskiPASS (F-Score 4)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (1/5)✗AckmanFAIL (1/9)✗TempletonFAIL (3/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (1/7)✗OshaughnessyFAIL (Rank #949/963 (Top 98.5%))
• Cash Flow40% pass✓ 5✗ 7▾

  6 of 10 flag BAK's cash flow — Buffett, Lynch, Pabrai +3 more

  Free Cash Flow Proxy$-1.6B

  ✗BuffettPositive and growing

  FCF Positive and Growing$-214.6M

  ✗LynchPositive and growing

  Operating Cash Flow$394.1M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=2.40%, ROA=-11.14%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)1.3x

  ✓Dreman< 8x

  P/E or FCF YieldFCF Yield=-84.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive7/10 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-42.1%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency9/10 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-214.6M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-84.06%; #4017/4519 (top 88.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models50% pass✓ 1✗ 1▾

  Models split on BAK at $1.13 — fair values range $0.34–$7.41

  Greenblatt fair value$0.34

  ✗Greenblatt-232.4% margin vs $1.13

  Marks fair value$7.41

  ✓Marks+84.8% margin vs $1.13