Stock Red Flags

Red flag checklist for a stock. Use when the user asks about risks, warning signs, accounting concerns, governance issues, or whether something looks suspicious about a company.

daringanitch Updated

File contents

Run the full red flag screen:

ACCOUNTING

  • Revenue recognition changes in last 3 years?
  • Goodwill as % of total assets (>50% = concern)
  • Accounts receivable growing faster than revenue?
  • Gross margin declining while revenue grows?
  • Auditor change or material weakness disclosures?

GOVERNANCE

  • Dual-class share structure limiting shareholder rights?
  • Board independence <50%?
  • CEO also Chairman?
  • Related-party transactions disclosed?
  • Short interest >15%?

OPERATIONS

  • Customer concentration (>20% revenue from one customer)?
  • Key-man risk?
  • Any disclosed SEC investigations or DOJ inquiries?
  • Declining employee reviews (proxy for culture deterioration)?

Flag each as GREEN / YELLOW / RED with a one-line explanation.

Aggregate risk rating: Low / Medium / High / Avoid

daringanitch/claude-stock-analyst/tree/main/skills/stock-red-flags commit 0750ce64a2

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