As value investors, we have always preferred Grahamite stocks, whereby the Market Capitalisation of the company is trading below its NCAV. However, while such companies are ideal investments, there are many caveats we have to take note of. One such criteria is sticking to the core business operations as will be explained in today's article using Lerado Group Holding as a case study. Business Operations Founded in 1988, Lerado Group designs, manufactures and distributes a wide range of infant and pre-school products including baby strollers, beds and playards, soft goods, high chairs, bouncers, infant car seats, battery-operated ride-on cars, as well as other accessories. Furthermore, the Group has also extended its business scope to the manufacturing and selling of infant and preschool products under its own brand of “Angel”. – Extracted from Lerado AR 2012 As seen from the above-mentioned extract, Lerado is a company that is principally engaged in infant products where the manufacture and distribution of juvenile and infant products contributes 84.4% of the revenue in 2012 and retail sale of juvenile and infant products contributes 2.6% of the revenue in 2012. However, in the years of 2013 and 2014, due to the change in business climate, management have sold off these two core business divisions, retail sales in 2013 and manufacturing and distribution in 2014. In 2013... More