DAILY JOURNAL CORP

Cash-rich publisher/legal-software hybrid whose headline returns are inflated by a large marketable-securities portfolio.

Strengths

• Journal Technologies revenue grew 25% with operating income up sharply; segment now ~80% of revenue
• Fortress balance sheet: current ratio 13.9 (95th pct), $513M cash/investments, minimal operating leverage
• High reported ROA 20.5% (97th pct) and ROE 28.7% (83rd pct)

Risks

• Most net income comes from unrealized securities gains ($134M), not operations — returns overstate the business
• Traditional newspaper business in secular decline with operating losses; AI-disruption risk to Journal Technologies

Notable findings

• Material weakness0 million primarily resulting from increased accounting advisory and legal fees primarily associated with the remediation of material weaknesses in our internal controls
• Customer concentration~80% of revenue from one customer/distributor — Approximately 80% of our revenues during fiscal years 2025 and 2024 were derived from Journal Technologies
• Strong balance sheetStrong balance sheet — $514M cash & investments