BrightSpire Capital, Inc.

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 5✗ 30▾

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

  Net income / market capitalization+4.77%; #1755/6340 (top 27.7%)

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

  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)3/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-4.2%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)21.0% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗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 CAGR

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

  ROE2.2%

  ✗Lynch> 15%

  EBIT / Enterprise Value2.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=2.5%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-0.87%

  ✗PiotroskiROA > 0

  ROA Change YoY-3.54% -> -0.87% (delta: +2.67%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=2.05%, ROA=-0.87%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-18.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity2.2%

  ✗Dreman> 12%

  Margin of SafetyP/FFO=99.9x

  ✗PabraiP/FFO < 15

  Return on Equity-5.7% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency3/10 years positive

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

  Operating Income / Revenue21.0%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity2.2%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend38.1% (2023) -> 21.0% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue flat/down, operating margin 38.1% -> 21.0%

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

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+2.16%; #2749/5226 (top 52.6%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0150; #1153/5884 (top 19.6%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years3/10 years positive

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

  All 12 investors flag BRSP's debt & leverage

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 2.63, IC: 2.9x

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

  Total Debt / Equity2.98

  ✗Lynch< 0.33

  Cash - Long-term Debt$-2.6B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change66.91% -> 69.27%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities

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

  Total Debt / Shareholders' Equity2.98

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

  Debt Levels2.98

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

  Interest Coverage & Debt/EBITDAIC=2.9x, D/EBITDA=23.4x

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

  Total Debt / Shareholders Equity2.98

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-2.9822; #3931/4210 (top 93.4%)

  ✗AsnessTop 30% of eligible cross-section
• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  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 CAGR

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

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency3/10 years positive

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

  3yr Median Revenue Growth-7.9%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 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 trendrevenue flat/down, operating margin 38.1% -> 21.0%

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

  5-year Revenue CAGR2.6%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✗ 11▾

  All 8 investors flag BRSP's efficiency

  Current Ratio

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)1.4%

  ✗Buffett> 10%

  ROIC - WACC-8.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.10x -> 0.09x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5

  Return on Invested Capital1.6%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=3.1%; FY2024: ROIC=0.4%; FY2025: ROIC=1.6%

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

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

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 1.6%)

  ✗SleepROIC > 12% in a majority of years
• Valuation8% pass✓ 8✗ 17▾

  12 of 13 flag BRSP's valuation — Graham, Lynch, Greenblatt +9 more

  Net income / market capitalization+4.77%; #1755/6340 (top 27.7%)

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

  Price / FFO per Share99.9x

  ✗Graham<= 15x✗Dreman< 12x✗Ackman<= 25

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value2.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=2.5%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / (CFO / Shares)5.6x

  ✓Dreman< 8x

  Valuation ReasonablenessOE Yield=1.3%

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

  P/FFO or FFO YieldP/FFO=99.9x, FFO Yield=1.0%

  ✗PabraiP/FFO < 15 or FFO Yield > 10%

  P/B or P/E vs. Historical AverageP/B=0.4x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / EPS

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

  Price vs. Trailing Low100% of trailing low ($3.21)

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

  Price / Book Value per Share0.4x

  ✓Templeton< 1.5x✓SchlossP/B <= 0.80x (app cutoff)

  Positive book equity / market capitalization+2.2066; #618/6449 (top 9.6%)

  ✓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 Share0.43x

  ✓SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-42.9%

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

  Revenue / market capitalization+0.8476; #1962/5247 (top 37.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-44.85%; #4977/6202 (top 80.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts14% pass✓ 2✗ 12▾

  Split decision: 12 FAIL · 2 PASS · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/7)✗BuffettFAIL (0/9)✗LynchFAIL (1/7)•GreenblattNot ranked✓PiotroskiPASS (F-Score 4)✗DremanFAIL (2/10)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (3/9)✓TempletonPASS (4/8)✗SleepFAIL (2/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Cash Flow50% pass✓ 4✗ 3▾

  3 of 6 pass — Buffett, Neff and Oshaughnessy object

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Operating Cash Flow$73.0M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=2.05%, ROA=-0.87%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)5.6x

  ✓Dreman< 8x

  Positive Operating Cash Flow frequency9/10 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

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

  (Operating cash flow - capex) / market capitalization

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

  Models split on BRSP at $3.21 — fair values range $0.67–$5.12

  Greenblatt fair value$5.12

  ✓Greenblatt+37.3% margin vs $3.21

  Pabrai fair value$0.67

  ✗Pabrai-379.1% margin vs $3.21