HG Holdings, Inc.

Where It Passes

Where It Falls Short

• Cash Flow0% pass✓ 1✗ 6▾

  No clean pass — all 6 investors flag at least one cash flow criterion

  Free Cash Flow Proxy$-0.1M

  ✗BuffettPositive and growing

  Operating Cash Flow$0.9M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=1.73%, ROA=3.02%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)19.8x

  ✗Dreman< 8x

  Positive Operating Cash Flow frequency8/17 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
• Efficiency0% pass✓ 1✗ 10▾

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

  Current Ratio

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)

  ✗Buffett> 10%

  ROIC - WACC

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.27x -> 0.29x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

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

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Profitability6% pass✓ 7✗ 28▾

  15 of 16 flag STLY's profitability — Graham, Buffett, Lynch +12 more

  Net income / market capitalization+9.58%; #710/6340 (top 11.2%)

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

  Positive EPS (10 years)6/18 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)7/18 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)-1.8% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-0.1M

  ✗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

  ROE3.8%

  ✗Lynch> 15%

  EBIT / Enterprise Value

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=None, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets3.02%

  ✓PiotroskiROA > 0

  ROA Change YoY-0.57% -> 3.02% (delta: +3.58%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=1.73%, ROA=3.02%

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY94.8% -> 96.7%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-0.5%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity3.8%

  ✗Dreman> 12%

  Margin of SafetyP/FFO=10.7x

  ✓PabraiP/FFO < 15

  Return on Equity0.1% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-3300.0% (IV=$0.10 vs Price=$3.40)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency7/17 years positive

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

  Operating Income / Revenue

  ✗Ackman>= 15%

  Net Income / Shareholders Equity3.8%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trend

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

  Gross profit / total assets+26.64%; #1613/3702 (top 43.6%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+3.80%; #2583/5226 (top 49.4%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0426; #2362/5884 (top 40.1%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years4/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag STLY's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest Coverage

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

  Total Debt / Equity

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities

  ✗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 Levels

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

  Interest Coverage & Debt/EBITDA

  ✗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
• Growth13% pass✓ 2✗ 11▾

  7 of 8 flag STLY's growth — Graham, Lynch, Dreman +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 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 Frequency7/17 years positive

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

  3yr Median Revenue Growth3.6%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗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 trend

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

  5-year Revenue CAGR

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Verdicts17% pass✓ 2✗ 10▾

  Split decision: 10 FAIL · 4 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (1/7)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)•GreenblattNot ranked•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (1/10)✓MungerPASS (2/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (0/6)✗MarksFAIL (2/5)✗AckmanFAIL (3/9)✓TempletonPASS (4/8)✗SleepFAIL (1/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Valuation models33% pass✓ 1✗ 2▾

  Models split on STLY at $3.40 — fair values range $0.10–$8.46

  Graham fair value$8.46

  ✓Graham+59.8% margin vs $3.40

  Dreman fair value$0.10

  ✗Dreman-3300.0% margin vs $3.40

  Pabrai fair value$2.75

  ✗Pabrai-23.6% margin vs $3.40
• Valuation46% pass✓ 14✗ 11▾

  7 of 13 flag STLY's valuation — Lynch, Greenblatt, Dreman +4 more

  Net income / market capitalization+9.58%; #710/6340 (top 11.2%)

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

  Price / FFO per Share10.7x

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

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=None, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / (CFO / Shares)19.8x

  ✗Dreman< 8x

  Valuation ReasonablenessP/E=8.7x, OE Yield=9.4%

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

  P/FFO or FFO YieldP/FFO=10.7x, FFO Yield=9.5%

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

  P/B or P/E vs. Historical AverageP/E=8.7x, P/B=0.4x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-3300.0% (IV=$0.10 vs Price=$3.40)

  ✗Marks>= 20% below intrinsic value

  Price / EPS8.7x

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

  Price vs. Trailing Low100% of trailing low ($3.40)

  ✓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+2.5209; #545/6449 (top 8.5%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS8.7x

  ✓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 Share0.50x

  ✓SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

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

  Revenue / market capitalization+0.9435; #1828/5247 (top 34.8%)

  ✗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-26.09%; #4250/6202 (top 68.5%)

  ✗OshaughnessyTop 10% of eligible cross-section