Journey of a Stockaholic: Destiny, Fate or Choice?

GUEST POST BY RAJU LILLANEY

2011-12-18T06:41:00.000-08:00

Reasons for the decline in Share Markets. ( Nifty at 4650 )

1. Political Instability

2. Corruption ( Govt. afraid to take any decision about reforms )

3. Euro Zone Problems and recession expected.

4. No FII inflow because of adverse currency movements.

5. Contraction in IIP and earnings of companies

6. Fiscal deficit

Buying opportunities for following reasons.

1. Moderation in inflation leading to decrease in interest rates by RBI in the coming months.

2. New FII's will find investing in equities attractive due to Rupee depreciation.

3. FDI problem may be solved in the next few months

OBEROI REALTY

2011-10-22T18:17:00.000-07:00

Oberoi Realty has increased its Net Profit Before Tax from around Rs.28 Cr in Mar'10 to more than Rs. 244 Cr. in Mar'11. Oberoi Realty has increased its Net Cash from Operating Activities from around Rs.129 Cr in Mar'10 to around Rs. 250 Cr. in Mar'11. Oberoi Realty has increased its Closing Cash & Cash Equivalents from around Rs.93 Cr in Mar'10 to around Rs. 1140 Cr. in Mar'11. If it continues to grow at the same pace it may have more than Rs.13k Cr. in cash by Mar'12. The market capitalization of Oberoi Realty is around Rs.8k Cr. as of now.

ORIENTAL BANK OF COMMERCE

2011-10-02T16:51:00.001-07:00

Oriental Bank of Commerce has increased its Net Profit Before Tax from around Rs.826 Cr in Mar'07 to more than Rs. 1k Cr. in Mar'11. Oriental Bank of Commerce has increased its Net Cash from Operating Activities from around Rs.1k Cr in Mar'07 to around Rs. 2k Cr. in Mar'11. Oriental Bank of Commerce has increased its Closing Cash & Cash Equivalents from around Rs.7k Cr in Mar'07 to around Rs. 19k Cr. in Mar'11. If it continues to grow at the same pace it may have more than Rs.51k Cr. in cash by Mar'15. The market capitalization of Oriental Bank of Commerce is less than Rs.9k Cr. as of now.

TITAN INDUSTRIES

2011-09-27T17:48:00.000-07:00

Titan Industries has increased its Net Profit Before Tax from around Rs.131 Cr in Mar'07 to around Rs. 599 Cr. in Mar'11. Titan Industries has increased its Net Cash from Operating Activities from around Rs.126 Cr in Mar'07 to around Rs. 1024 Cr. in Mar'11. Titan Industries has increased its Closing Cash & Cash Equivalents from around Rs.50 Cr in Mar'07 to around Rs. 1024 Cr. in Mar'11. If it continues to grow at the same pace it may have more than Rs.20k Cr. in cash by Mar'15. The market capitalization of Titan Industries is around Rs.19k Cr. as of now.

POWER FINANCE CORPORATION

2011-05-20T19:12:00.000-07:00

PFC is available at a price of around Rs.215 and has an EPS of around Rs 22 giving it a P/E of less than 10!

DB REALTY

2011-05-20T19:00:00.000-07:00

DB Realty has a price of around Rs.81 and EPS of around Rs.13 in the last 12 months which gives it a P/E Ratio of around 6! It has a book value of Rs.127 which gives it a P/B Ratio of less than 0.75!

RELIANCE COMMUNICATIONS LTD.

2011-05-19T19:26:00.000-07:00

Reliance Communications Ltd. has a market cap of around Rs.17k Crores and is available at a P/BV of less than 0.5! It had investments of around Rs.31k Crores as of March 2010 and has earned Rs.5 per share in the last 9 months. It is weak technically. Can reach Rs.100 in a years time. What do you think?

CENTRAL BANK OF INDIA

2011-05-18T20:01:00.001-07:00

Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. Central Bank of India is a group 'A' stock that hit a 52 week low recently and is available at a P/E of less than 5! The EPS is around Rs.30 per share and the price of the stock is around Rs. 120 per share. The stock can reach around Rs.150-200 in a year's time. What do you think?

PATNI COMPUTER SYSTEMS

2011-05-17T22:22:00.001-07:00

iGATE Patni heralds the beginning of a new era by bringing together two companies – iGATE and Patni. Patni is a group 'A' stock that hit a 52 week low today and is available at a P/E of less than 10! The EPS is around Rs.50 per share and the price of the stock is around Rs. 345 per share. The stock can reach around Rs.400-450 in a year's time. What do you think?

PIRAMAL HEALTHCARE LTD.

2011-05-17T05:34:00.000-07:00

Piramal Healthcare Ltd, a Piramal Group company, is a group 'A' stock that hit a 52 week low today and is available at a P/BV of less than 0.5! The Book Value is around Rs.856 per share and the market cap of the company is around Rs. 7000 crores. The company has Reserves & Surplus of over Rs.11000 crores. Investments are a little over Rs. 1000 crores. The company has net current assets of more than Rs.1000 crores. Promoters own more than 50% of the shares. The stock can reach around Rs.856 in a year's time. What do you think?

INDIABULLS REAL ESTAE

2011-05-16T01:14:00.001-07:00

Indiabulls Real Estate is one of the largest real estate company in India with development projects spread across high-end office and commercial complexes, premium residential developments, mega townships, retail spaces, hotel and resorts, state of the art special economic zones and infrastructure development. This 'A' group stock hit a 52 week low recently and is available at a P/BV of less than one! The Book Value is around Rs. 160 per share and the market cap of the company is a little over Rs. 4000 crores. The company has Reserves & Surplus of over Rs. 8000 crores. Investments are a little over Rs. 6000 crores. The company has net current assets of more than 5000 crores. Public owns more than 75% of the shares. The stock seems to be a good buy between Rs.115 & Rs.117 for a target of around Rs.160 in a year's time. What do you think?

NEW IDEAS

2011-01-11T23:34:00.000-08:00

BALMER LAWRIE & COMPANY
Balmer Lawrie & Co. Ltd. has increased its Net Profit Before Tax from around Rs.106 Cr in Mar'07 to around Rs. 180 Cr. in Mar'11. Balmer Lawrie & Co. Ltd. has increased its Net Cash from Operating Activities from around Rs.82 Cr in Mar'07 to around Rs. 92 Cr. in Mar'11. Balmer Lawrie & Co. Ltd. has increased its Closing Cash & Cash Equivalents from around Rs.48 Cr in Mar'07 to around Rs. 266 Cr. in Mar'11. If it continues to grow at the same pace it may have more than Rs.1k Cr. in cash by Mar'15. The market capitalization of Balmer Lawrie & Co. Ltd. is less than Rs.1k Cr. as of now.

MOIL
At present, MOIL operates 10 mines, six located in the Nagpur and Bhandara districts of Maharashtra and four in the Balaghat district of Madhya Pradesh.MOIL is a group 'A' stock has an EPS of around Rs.27 per share and the price of the stock is around Rs. 370 per share. The stock can reach around Rs.450 in a year's time. What do you think?

BANKS

2010-11-22T21:47:00.000-08:00

CORPORATION BANK
Corporation Bank has increased its Net Profit Before Tax from around Rs.704 Cr in Mar'07 to more than Rs. 1727 Cr. in Mar'11. Corporation Bank has increased its Closing Cash & Cash Equivalents from around Rs.6k Cr in Mar'07 to around Rs. 14k Cr. in Mar'11. If it continues to grow at the same pace it may have more than Rs.32k Cr. in cash by Mar'15. The market capitalization of Corporation Bank is around Rs.6k Cr. as of now which is less than the cash on its books!

BANK OF BARODA
Bank of Baroda has increased its Net Profit Before Tax from around Rs.1654 Cr in Mar'07 to more than Rs. 5650 Cr. in Mar'11. Bank of Baroda has increased its Net Cash from Operating Activities from around Rs.5153 Cr in Mar'07 to around Rs. 11778 Cr. in Mar'11. Bank of Baroda has increased its Closing Cash & Cash Equivalents from around Rs.18280 Cr in Mar'07 to around Rs. 49934 Cr. in Mar'11. If it continues to grow at the same pace it may have more than Rs.100000 Cr. in cash by Mar'15. The market capitalization of Bank of Baroda is around Rs.30285 Cr. as of now which is less than the cash on its books!

Whitney Tilson Huge Crash Coming

2010-07-07T12:24:00.000-07:00

Fag Bearings India Ltd.

2010-04-29T08:30:00.000-07:00

Financial Snapshot
==================
Fag Bearings India Ltd. has a Mkt. Cap of around Rs.957 crores. It has earnings per share of around Rs.34 for the last 12 months and at the current market price of around Rs. 575-580 has a P/E of around 16 which gives a return of more than 6%.

Ratios
======
Fag Bearings India Ltd. has been growing its Net Worth at atleast 14% per year from December 2000. It has no debt.

P&L
===
Sales have grown from around Rs.207 crores to around Rs.801 crores from December 2000 to December 2009.Profits have grown from around Rs.12 crores to around Rs.65 crores from December 2000 to December 2009.

Balance Sheet
=============
Fag Bearings India Ltd. has a Net Worth of around Rs.461 crores as of December 2009. It has Investments of around Rs.0.32 crores as of December 2009. It has a Cash And Bank of around Rs.173 crores as of December 2009. It has Net Curr. Assets of around Rs.312 crores as of December 2009.

Cash flow
=========
Fag Bearings India Ltd. has increased its cash from around Rs.7 crores to around Rs.173 crores from December 2005 to December 2009.

Oil India Ltd.

2010-04-29T08:12:00.000-07:00

Financial Snapshot
=============
Oil India Ltd. has a Mkt. Cap of around Rs.26981 crores. Its has earnings per share of around Rs.93 for the last 12 months and at the current market price of around Rs. 1120 has a P/E of around 11-12 which gives a return of more than 8%.

Ratios
====
Oil India Ltd. has been growing its Net Worth at atleast 14% per year from March 2000. It has a low debt equity ratio(0.01).

P&L
===
Sales have grown from around Rs.1k crores to around Rs.7k crores from March 2000 to March 2009.Profits have grown from around Rs.400 crores to around Rs.2k crores from March 2000 to March 2009.

Balance Sheet
==========
Oil India Ltd. has a Net Worth of around Rs.9k crores as of March 2009. It has Investments of around Rs.488 crores as of March 2009. It has a Cash And Bank of around Rs.6k crores as of March 2009. It has Net Curr. Assets of around Rs.4k crores as of March 2009.

Cash flow
=======
Oil India Ltd. has increased its cash from around Rs.41 crores to around Rs.6k crores from March 2005 to March 2009.

Renaissance Jewellery Ltd.

2010-03-18T12:55:00.000-07:00

Sales have grown from around Rs.122 Cr to around Rs.669 Cr from 2003 to 2009. Profits have grown from around Rs.3 Cr to around Rs.20 Cr from 2003 to 2009.

Renaissance Jewellery Ltd. has been earning a return of at least 9% on its net worth per year from 2003 to 2009. It has earnings per share of around Rs.15 in the last 12 months.

Renaissance Jewellery Ltd has a cash and bank balance of around Rs.21 Cr. It has investments of around Rs.50 Cr. It has a Net Worth of around Rs.211 Cr. It has a market capitalization of around Rs.167 Cr which is less than its Net Worth!

At a market price of around Rs.87 and earnings+dividends of around Rs.16.5 the initial rate of return is around 18 percent! The value of the company according to me should be at least Rs.100-150.

Renaissance Jewellery Ltd. is a Jewellery company and has a Debt Equity Ratio of 0.64. Competitors are Rajesh Exports and Gitanjali Gems.

Renaissance Jewellery Ltd. has grown its cash from Rs.1.67 Cr to Rs.20.96 Cr. during the period 2003 to 2009. This translates into a compounding rate of greater than 75%!

Assuming that Renaissance Jewellery Ltd. continues to grow its cash at 40% and taking a discounting rate of 8% the cash flow would be something like below for the next few years.

27.17 + 35.22 + 45.66 + 59.18 + 76.72 = Rs. 243.95 Cr which is greater than current market cap of the company!

Renaissance Jewellery Ltd has Net Current Assets worth Rs.267 Cr which is greater than its current market cap!

FDC Ltd.

2010-01-18T04:19:00.000-08:00

Sales have grown from around Rs.1k million to around Rs.5k million from 2000 to 2009. Profits have grown from around Rs.235 million to around Rs.834 million from 2000 to 2009.

FDC Ltd. has been earning a return of at least 17% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.4 in the last 12 months.

FDC Ltd. has a cash and bank balance of around Rs.97 million. It has investments of around Rs.1k million. It has a net worth of around Rs.4k million. It has a market capitalization of around Rs.13k million.

At a market price of around Rs.69 and earnings+dividends of around Rs.5.5 the initial rate of return is around 8 percent. The value of the company according to me should be at least Rs.75-77.

FDC Ltd. is a Pharmaceutical company and has a Debt Equity Ratio of 0.01. Competitors are Sun Pharma, Cipla, Ranbaxy Labs, Dr. Reddy's Labs and Glaxosmithkline.

Glodyne Technoserv Ltd.

2009-11-04T21:07:00.001-08:00

Sales have grown from around Rs.82 million to around Rs.4k million from 2000 to 2009. Profits have grown from around Rs.2 million to around Rs.700 million from 2000 to 2009.

Glodyne Technoserv Ltd. has been earning a return of at least 22% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.37 in the last 12 months.

Glodyne Technoserv Ltd. has a cash and bank balance of around Rs.10 million. It has investments of around Rs.362 million. It has a net worth of around Rs.1k million. It has a market capitalization of around Rs.7k million.

At a market price of around Rs.340 and earnings of around Rs.37 the initial rate of return is above 10 percent ! The value of the company according to me should be at least Rs.600.

Glodyne Technoserv Ltd. is a Software company and has a Debt Equity Ratio of 0.46. Competitors are MindTree, OnMObile Global, Sterling Int, Core Projects and FirstSource.

Hero Honda Motors Ltd.

2009-11-02T22:45:00.000-08:00

Sales have grown from around Rs.22k million to around Rs.123k million from 2000 to 2009. Profits have grown from around Rs.1k million to around Rs.12k million from 2000 to 2009.

Hero Honda Motors Ltd. has been earning a return of at least 32% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.90 in the last 12 months.

Hero Honda Motors Ltd. has a cash and bank balance of around Rs.2k million. It has investments of around Rs.33k million. It has a net worth of around Rs.38k million. It has a market capitalization of around Rs.312k million.

At a market price of around Rs.1530 and earnings of around Rs.90 the initial rate of return is around 5 percent which we can easily get in an FD ! The value of the company according to me should be at least Rs.2700.

Hero Honda Motors Ltd. is an Auto company and has a Debt Equity Ratio of 0.02. Competitors are Bajaj Auto, TVS Motor, Mah Scooters, Kintec Eng and Scooters India.

Navneet Publication (India) Ltd.

2009-10-01T23:35:00.000-07:00

Sales have grown from around Rs.1k million to around Rs.5k million from 2000 to 2009. Profits have grown from around Rs.280 million to around Rs.589 million from 2000 to 2009.

Navneet Publication (India) Ltd. has been earning a return of at least 18% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.7 in the last 12 months.

Navneet Publication (India) Ltd. has a cash and bank balance of around Rs.63 million. It has investments of around Rs.140 million. It has a net worth of around Rs.2k million. It has a market capitalization of around Rs.3k million.

At a market price of around Rs.39.15 and earnings of around Rs.7 the initial rate of return is greater than 18 per cent ! The value of the company according to me should be at least Rs.70.

Navneet Publication (India) Ltd. is a Printing & Stationery company and has a Debt Equity Ratio of 0.25.

VST Industries Ltd.

2009-10-01T23:26:00.000-07:00

Sales have grown from around Rs.3143 million to around Rs.3710 million from 2000 to 2009. Profits have grown from around Rs.156 million to around Rs.618 million from 2000 to 2009.

VST Industries Ltd. has been earning a return of at least 21% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.40 in the last 12 months.

VST Industries Ltd. has a cash and bank balance of around Rs.137 million. It has investments of around Rs.1k million. It has a net worth of around Rs.2k million. It has a market capitalization of around Rs.6k million.

At a market price of around Rs.448.55 and earnings of around Rs.40 the initial rate of return is around 9 per cent ! The value of the company according to me should be at least Rs.800.

VST Industries Ltd. is a Tobacco company and has no debt.

eClerx Services Ltd.

2009-10-01T23:09:00.000-07:00

Sales have grown from around Rs.205 million to around Rs.1k million from 2003 to 2009. Profits have grown from around Rs.6 million to around Rs.606 million from 2003 to 2009.

eClerx Services Ltd. has been earning a return of at least 33% on its net worth per year from 2003 to 2009. It has earnings per share of around Rs.29 in the last 12 months.

eClerx Services Ltd. has a cash and bank balance of around Rs.189 million. It has net current assets of around Rs.469 million. It has investments of around Rs.984 million. It has a net worth of around Rs.1k million. It has a market capitalization of around Rs.7k million.

At a market price of around Rs.373.10 and earnings of around Rs.29 the initial rate of return is around 8 per cent ! The value of the company according to me should be at least Rs.600.

eClerx Services Ltd. is a Medium/Small Software company and has no debt. Competitors are OnMobile Global, Sterling International, MindTree, Core Projects and Firstsource Solutions.

Infosys Technologies Ltd.

2009-10-01T22:34:00.000-07:00

Sales have grown from around Rs.8k million to around Rs.202k million from 2000 to 2009. Profits have grown from around Rs.297 million to around Rs.13k million from 2000 to 2009.

Infosys Technologies Ltd. has been earning a return of at least 32% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.105 in the last 12 months.

Infosys Technologies Ltd. has a cash and bank balance of around Rs.90k million. It has net current assets of around Rs.123k million. It has investments of around Rs.10k million. It has a net worth of around Rs.178k million. It has a market capitalization of around Rs.1339k million.

At a market price of around Rs.2336.75 and earnings of around Rs.105 the initial rate of return is around 4 per cent which can be easily obtained in a fixed deposit ! The value of the company according to me should be at least Rs.3000.

Infosys Technologies Ltd. is a software company and has no debt. Competitors are TCS, Wipro, HCL Tech,Oracle Financial and Mphasis.

Tata Elxsi Ltd.

2009-10-01T22:20:00.000-07:00

Sales have grown from around Rs.1k million to around Rs.4k million from 2000 to 2009. Profits have grown from around Rs.46 million to around Rs.217 million from 2000 to 2009.

Tata Elxsi Ltd. has been earning a return of at least 20% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs.18 in the last 12 months.

Tata Elxsi Ltd. has a cash and bank balance of around Rs.223 million. It has net current assets of around Rs.659 million. It has investments of around Rs.2 million. It has a net worth of around Rs.1k million. It has a market capitalization of around Rs.5k million.

At a market price of around Rs.180.35 and earnings of around Rs.18 the initial rate of return is more than 9 per cent ! The value of the company according to me should be atleast Rs.200.

Tata Elxsi Ltd. is a software company and has a Debt Equity Ratio of 0.09. Competitors are Infosys, TCS, Wipro, HCL Tech and Oracle Financial.

Ind Swift Ltd.

2009-09-15T09:26:00.000-07:00

Sales have grown from around Rs. 735 million to around Rs.5000 million from 2000 to 2008. Profits have grown from around Rs.52 million to around Rs.311 million from 2000 to 2008.

Ind Swift Ltd. has been earning a return of at least 15% on its net worth per year from 2000 to 2008. It has earnings per share of around Rs.9 in the last 12 months.

Ind Swift Ltd. has a cash and bank balance of around Rs.230 million. It has net current assets of around Rs.2000 million. It has investments of around Rs.283 million. It has a net worth of around Rs.1000 million. It has a market capitalization of around Rs.1000 million.

At a market price of around Rs.28 and earnings of around Rs.9 the initial rate of return is greater than 30 per cent ! The value of the company according to me should be around Rs.90.

Ind Swift Ltd. is a Pharmaceutical company and has a Debt Equity Ratio of 2.2. Competitors are Sun Pharma, Cipla, Ranbaxy Labs, Dr Reddys Labs and Glaxosmithkline.

PAST, PRESENT, FUTURE AND MORE

2009-08-19T19:05:00.000-07:00

Given below is a list of things to check before investing in a company.

PAST

1.What has been the growth in the company’s sales?

2.What has been the growth in the company’s profits?

3.What has been the growth in the company’s earnings?

4.What has been the least rate of return on net worth in the last 8-10 years?

5.How much has been the company’s earnings per share in the last 12 months?

PRESENT

1. How much cash and bank balance does the company have?

2. How much net current assets does the company have?

3. How much investments does the company have?

4. What is the company’s net worth?

5. What is the company’s market capitalization?

FUTURE

1. What will be the Initial Rate of Return that I will get if I buy the company?

2. What is the value of the company according to most conservative estimates?

1.What does the company do?

2.What is the economics of the business?

3.How is the Management?

4.Who are the competitors?

5.What is the current rate of interest in a bank, fixed deposit, NSC, PPF etc.?

6.What is the current rate of inflation?

7.What is the tax rate on various investments?

Procter and Gamble

2009-07-01T12:20:00.000-07:00

Sales have grown from around Rs.4k million to around Rs.6k million from 2000 to 2008. Profits have grown from around Rs.750 million to around Rs.1000 million from 2000 to 2008.

Procter and Gamble has been earning a return of at least 28% on its net worth per year from 2000 to 2008. It has earnings per share of around Rs. 52 in the last 12 months.

Procter and Gamble has a cash and bank balance of around Rs. 1000 million. It has net current assets of around Rs. 2000 million. It has a net worth of around Rs. 3000 million. It has a market capitalization of around Rs. 39000 million.

At a market price of around Rs. 1200 and earnings of around Rs. 52 the initial rate of return is less than 5 per cent which we could easily get in a fixed deposit! However the value of the company according to me should be around Rs.1500 considering its good long term and short term record.

Procter and Gamble makes Personal Care products and has no debt. Competitors are HUL, Dabur India, Colgate, Godrej Industries and Godrej Consumer.

Punj Lloyd Ltd.

2009-05-07T05:55:00.000-07:00

1.Has average debt but good interest cover and current ratio.
2.Cheap at current market price of ~126(EPS of ~12.5). Can be bought by people for speculative purposes as it does not have an impressive long term record.

Exide Industries

2009-05-07T05:48:00.000-07:00

1.Has low debt, good interest cover and average current ratio.
2.Has been growing at a rate of greater than 10% since 2000.
3.Expensive at current market price of ~50(EPS of ~3.5) but can be bought by people with a long term view of 8-10 years since all cars need batteries!

Syndicate Bank

2009-05-07T05:43:00.001-07:00

Sales have grown from around Rs.26k million to around Rs.99k million from 2000 to 2009. Profits have grown from around Rs.2k million to around Rs.9k million from 2000 to 2009.

Syndicate Bank has been earning a return of at least 19% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs. 20 in the last 12 months.

Syndicate Bank has a cash and bank balance of around Rs.144k million. It has net current assets of around Rs.918k million. It has investments of around Rs. 305k million. It has a net worth of around Rs.50k million. It has a market capitalization of around Rs.46k million.

At a market price of around Rs.88.90 and earnings of around Rs. 20 the rate of return is more than 20 per cent ! The value of the company according to me should be around Rs.200.

Syndicate Bank is a Public Sector Bank and has a Debt Equity Ratio of 25.22. Competitors are SBI, PNB, Bank of India, Bank of Baroda and Canara Bank.

Marico

2009-05-07T05:35:00.000-07:00

Sales have grown from around Rs. 6000 million to around Rs. 19000 million from 2000 to 2009. Profits have grown from Rs. 300 million to Rs. 1000 million from 2000 to 2009.

Marico has been earning a return of at least 25% on its net worth per year from 2000 to 2009. Marico has earnings per share of around Rs. 3.5 in the last 12 months.

Marico has a cash and bank balance of Rs. 249 million. It has net current assets of around Rs. 4000 million. It has investments of around Rs. 1000 million. It has a net worth of around Rs. 3000 million. It has a market capitalization of around Rs. 50000 million.

At a market price of around Rs. 87 and earnings of around Rs. 3.5 the rate of return is approximately 4.5% which is less than that of a fixed deposit which gets more than 4.5% currently. The company seems to be fairly priced at around Rs.87-88.

Marico makes Personal Care products like Parachute Oil which is a very well known brand. It has a Debt Equity Ratio of 0.84. Competitors are HUL, Dabur India, Colgate, Godrej Consumer and Godrej Ind.

TV18

2009-04-02T07:11:00.000-07:00

1.Has high debt,low interest cover and current ratio.
2.It is selling @ mcap of approx Rs. 8625.18 million which is less than its investment portfolio of Rs. 9019.19 million.

Rajesh Exports

2009-04-01T13:30:00.001-07:00

Rajesh Exports had cash of more than 6k Cr as of March 2010. Its current market Cap is less than 3k Cr. Looks weak technically. Is this a bargain ?

Ackruti City

2009-04-01T03:50:00.001-07:00

Sales have grown from around Rs.397 million to above Rs.4k million from 2002 to 2009. Profits have grown from around Rs.142 million to around Rs.2k million from 2002 to 2009.

Ackruti City Ltd. has been earning a return of at least 15% on its net worth per year from 2002 to 2009. It has loss per share of around Rs.10 in the last 12 months.

Ackruti City Ltd. has a cash and bank balance of around Rs.47 million. It has investments of above Rs.4k million. It has a net worth of above Rs.10k million. It has a market capitalization of around Rs.37k million.

At a market price of above Rs.500 and losses of around Rs.37 per share the initial rate of return is NEGATIVE !

Ackruti City Ltd. is a Real Estate company and has a Debt Equity Ratio of 0.97. Competitors are DLF, HDIL, Indiabulls Real Estate, Anant Raj Ind and Sunteck Realty.

Nectar Lifesciences Ltd.

2009-04-01T03:42:00.000-07:00

1. Good long term record - Has been growing its N/W @ around 10% per year for the last 8-10 years.

2. Sensible price - Has an EPS of around 5 for the last 12 months and a price of less than 15 which gives a decent return.

3.Has high debt but good interest cover.

Opto Circuits

2009-03-30T14:31:00.000-07:00

1. Good long term record - Has been growing its N/W @ around. 20% per year for the last 8-10 years
2. Sensible price - Has an EPS of around 8.5 for the last 12 months and a price of less than 100 which gives a decent return.
3.Has very little debt.

Country Club

2009-03-04T05:55:00.000-08:00

Sales have grown from around Rs. 100 million to around Rs. 3000 million from 2000 to 2008. Profits have grown from around Rs. 7 million to around Rs. 600 million from 2000 to 2008.

Country Club has a cash and bank balance of around Rs. 2000 million. It has net current assets of around Rs. 3000 million. It has investments of around Rs. 300 million. It has a net worth of around Rs. 6000 million. It has a market capitalization of around Rs. 1500 million. So Country Club’s market capitalization is less than the cash and net current assets (working capital) it has!

The company has a value of at least Rs. 25.

Country Club is in the Hotels business. It has a Debt Equity Ratio of 0.14. Competitors are Indian Hotels, EIH, Mahindra Holidays, Jaypee Hotels and Hotel Leela.

Titagarh Wagons Ltd.

2009-02-11T07:53:00.000-08:00

It is avaliable at around Rs. 243. It has a good record of ROE for the past few years(from 2003).

Indiabulls Securities

2009-02-04T08:16:00.000-08:00

The company has announced a buyback upto Rs.33. The company has a DEBT EQUITY of 1.04 and is avaliable at around Rs. 23. It has a good record of ROE for the past few years(from 2003).

Siemens

2009-02-03T05:41:00.000-08:00

Siemens has a good long term record of return on equity/networth of approx 20%. It has an EPS of approx Rs. 20. It has no debt.

Wipro

2009-01-31T23:00:00.000-08:00

Growth : 20%
EPS : 20
Value : 400
Price : 235
B/V : 79

Container Corporation of India

2009-01-31T22:57:00.000-08:00

Sales have grown from around Rs. 8000 million to around Rs. 33000 million from 2000 to 2008. Profits have grown from around Rs. 1000 million to around Rs. 7000 million from 2000 to 2008.

Container Corporation has been earning a return of at least 20% on its net worth per year from 2000 to 2008. Container Corporation has earnings per share of around Rs. 60 in the last 12 months.

Container Corporation has a cash and bank balance of around Rs. 15000 million. It has net current assets of around Rs. 11000 million. It has investments of around Rs. 1000 million. It has a net worth of around Rs. 31000 million. It has a market capitalization of around Rs. 150000 million.

At a market price of around Rs. 1200 and earnings of around Rs. 60 the rate of return is approximately 5% which is less than that of a fixed deposit which gets more than 5% currently. The company seems to be fairly priced at around Rs.1200.

Container Corporation is in the Transport business. It has no debt. Competitors are Jet Airways, Allcargo Global, Kingfisher Air, Transport Corp and SpiceJet.

Havells India

2009-01-31T22:50:00.000-08:00

Sales have grown from around Rs. 900 million to around Rs.22000 million from 2000 to 2009. Profits have grown from around Rs.30 million to around Rs.1000 million from 2000 to 2009.

Havells has been earning a return of at least 15% on its net worth per year from 2000 to 2009. Havells has earnings per share of around Rs. 25 in the last 12 months.

Havells has a cash and bank balance of around Rs. 1000 million. It has net current assets of around Rs. 1000 million. It has investments of around Rs. 3000 million. It has a net worth of around Rs. 9000 million. It has a market capitalization of around Rs. 19000 million.

At a market price of around Rs. 320 and earnings of around Rs. 25 the rate of return is approximately 8% which is equivalent to that of a fixed deposit currently. The value of the company accroding to me should be around Rs.400.

Havells makes Electric Equipment and is a very well known brand. It has a Debt Equity Ratio of 0.08. Competitors are ABB, Crompton Greaves, Techno Electric, HBL Power and Emco.

Jindal Steel & Power

2009-01-07T01:28:00.002-08:00

Sales have grown from around Rs. 3k million to around Rs.76k million from 2000 to 2009. Profits have grown from around Rs.600 million to around Rs.15000 million from 2000 to 2009.

Jindal Steel and Power has been earning a return of at least 18% on its net worth per year from 2000 to 2009. It has earnings per share of around Rs. 92 in the last 12 months.

Jindal Steel and Power has a cash and bank balance of around Rs. 3000 million. It has net current assets of around Rs. 10000 million. It has investments of around Rs. 12000 million. It has a net worth of around Rs. 54000 million. It has a market capitalization of around Rs. 90000 million.

At a market price of around Rs. 610 and earnings of around Rs. 16 the initial rate of return is less than 3 per cent which we could easily get in a savings account! The value of the company accroding to me should be around Rs.300.

Jindal Steel and Power makes Steel - Sponge Iron and has a Debt Equity Ratio of 0.92. Competitors are Monnet Ispat, Jai Balaji Ind, Adhunik Metalik, Orissa Sponge and Sarda Energy.

Satyam Computer Services

2009-01-04T23:33:00.000-08:00

Net Sales - 8137.28
Net Profit - 1715.74
Net Worth - 7357.64
Total Debt - 23.67
Net Current Assets - 6004.39
Market Cap - 11000.00
Price - 160.00
EPS - 30.91
P/E - 5.00
B/V - 109.17
Growth - 10.00

Bharat Electronics

2009-01-04T23:06:00.000-08:00

Net Sales - 4069.28
Net Profit - 766.95
Net Worth - 3233.13
Total Debt - 1.38
Net Current Assets - 2775.33
Market Cap - 6000.00
Price - 700.00
EPS - 93.01
P/E - 8.00
B/V - 404.14
Growth - 20.

What I learnt from the Value Investor: The Bargain or Low P/E Method.

2008-09-25T05:42:00.000-07:00

A book that I read about intelligent investing was written by a value investor. I will try to summarize below what I learnt about investing from this book.

The author says that we should understand the nature of markets and be disciplined while investing.We should neither get scared when the markets fall nor get too excited when the markets rise. We should not follow the herd. We should buy when others are selling in panic and sell when others are buying in anticipation of making a quick profit.

He said that we should invest in companies that are selling at a price which is less than its working capital. This means that we would be buying the company at a BARGAIN price since effectively we would be getting the fixed assets of the business for free! Not only would this provide a MARGIN OF SAFETY it would almost ensure preservation of capital and good chances for appreciation.

He also suggested that we could categorize stocks into various categories like

1. Cheap - Stocks having a P/E of less than 10.

2. Average - Stocks having a P/E between 10 and 20.

3. Expensive - Stocks having a P/E of more than 20.

He preferred to invest in stocks having a low P/E.

He suggested that we should buy stocks which have P/E less than 15 and P/BV less than 1.5.

He also suggested that we should sell the stock when it did not meet the above criteria.

He also suggested that we should hold a stock for at least 2-3 years.

I have currently invested in companies using the above method and noticed that it is a good method

to manage risk and prevent huge losses which I have incurred using other investing methods!

What I learnt from the mutual fund manager: The P/E vs. Growth Method.

2008-09-23T23:47:00.000-07:00

The first 2 books that I read about investing were written by a mutual fund manager. I will try to summarize below what I learnt about investing from these 2 books.

He said that we should invest in stocks that we know about. So a software professional should invest in IT stocks, doctors in pharmaceuticals and so on. The advantage of investing in such a manner is that if there are any changes in a particular industry the people involved with that industry are the first to know about it long before the markets realize it and factor it in the prices. For example, if there is a slowdown in the IT industry the employees are probably the first ones to realize it when the companies start cost cutting measures like firing people, reducing onsite travel, etc. So it’s an advantage for a software professional to invest in an IT company since he/she can experience first hand the changes that are taking place in the industry.

Similarly a doctor knows which medicines sell the most and which pharmaceutical companies make these medicines. So it would be an advantage for a doctor to invest in such pharmaceutical companies rather than investing in IT stocks about which he knows little/nothing about.

He also suggested that we should categorize stocks into various categories like

1.Cyclical - Companies which have a boom and bust cycle every few years like real estate,cement,steel companies,etc.

2. Turn arounds - Companies currently showing a loss but which have good future prospects and likely to show a profit soon.

3. Slow growers - Companies growing at a slow rate of 8-10% each year.

4. Fast growers - Companies growing at a fast rate of 20-25% each year.

5. Stalwarts - Companies with a long history who grow at a rate of 10-20% each year and which pay a regular dividend.

By categorizing stocks in this way we know the return that we can expect from the companies that we have invested in. He preferred to invest in fast growers and stalwarts.

He suggested that we should buy stocks which have P/E less than the Growth in EPS. For example if a stock had a P/E of 20 and its growth in EPS was 25%, we should invest in it.

He also suggested that we should track the company every 6 months and sell the stock only if its future prospects looked bad or of there was a better investment opportunity.

He also suggested that we should hold a stock for at least 2-3 years.

I invested using the above method but the mistake I made was that I concentrated on companies which had a P/E less than the Growth based on the latest quarterly results. These companies had very high P/E ratios and the growth rate was even larger (for a very short time!). But the most important lesson that I forgot was that the mutual fund manager had also mentioned that maintaining rates of growth greater than 25% is very difficult for a company to do on a regular basis and surely the prices of the companies that I had invested in came crashing down!

Trading/Investment Experiences

2008-09-16T21:49:00.000-07:00

As far as I can remember my father has always been interested in stocks. When I was young I failed to understand his fascination for analyzing companies and investing/trading in them. I, like the rest of our family which includes my mother and sister thought it was a sheer waste of time especially because we did not get to watch our choice of TV channels so that my father could see the latest news which could affect my father's portfolio!

I was always interested in spending as much time as possible with my friends after school/college.My friends on the other hand were very career oriented and wanted to pursue Science although I preferred Commerce as it would give me more time to spend with my friends after college. But they all joined Science and I followed them(herd mentality?). When we were in college doing Science all my friends wanted to join Engineering and I wanted to do B.Sc. Less effort, more time with friends being my reasoning. Eventually I got into Engineering and in the second year I realized that I really liked programming. I decided that I would make a career as a programmer.

By the time I passed out from Engineering the jobs had dried up due to the technology related stock market crash and I had to start my career in a call center. I lasted only 2.5 months as my heart still lay in programming. I left the call center and luckily got a job in an IT company. The company had a production department and I worked there and could not program for 1.5 years. Besides I had a salary which was half that my colleagues were earning and I think they were not 1/2 as good as me at programming because they did not like it in the first place. I was good at my work and had plenty of free time. This is when I first got interested in stocks as I wanted to earn more money. I started analyzing the performance of mutual funds from various websites and started investing in them and making extra money. Eventually I got into the software department of the company. I learned the software in 3 months and was able to get a better paying job in a big company which gave me double the salary that I was earning at that time.

Even though I was now earning a good salary my interest in stocks continued. I could buy stocks and make money but I was not satisfied. The reason was that I could buy a stock at Rs. x or at Rs. x+10 or at Rs. x-5 but I could not determine what was the correct price to pay for a stock. Why was it that the stock prices fluctuated so much? So I started reading books and joined a MBA course to learn more about how companies handle their finances and get acquainted with the financial jargon. At that time I only knew how to buy and sell stock. No research. Pure speculation. My father used to advise me and still does but I rarely listened to him because I like to learn from my own mistakes. But over the years after reading various books I have observed that he has reached similar conclusions that the authors reached in their lifetimes. I will share the investment methods of these authors in the following paragraphs.

The first 2 books that I read were written by a mutual fund manager. He said we should invest in stocks that we knew about. So a software professional should invest in IT stocks, doctors in pharmaceuticals and so on and so forth. He divided stocks into various categories like cyclical,turn around, slow growers, fast growers, etc. He suggested that we should buy stocks which have P/E less than the Growth in EPS. For example if a stock had a P/E of 20 and its growth in EPS was 25%, we should invest in it.

I invested/traded using the above technique but was still searching for a better method to value a stock.I came across a book in which the author suggested that we should buy stocks with low P/E (less than 10) which are at their lowest yearly prices and which were selling at a price less than the working capital of the company. Although I could find low P/E stocks I could rarely find stocks selling at less than their working capital. Also the stocks with low P/E did not offer such good returns although they preserved capital and did not cause huge losses.

I then came across a book in which the author suggested that the P/E of a stock is not that important. The only factor that is important is the future prospects of a company. If the future of a company looks good it is obvious that the market will accord it a higher P/E and that should not dissuade an individual from investing in it. He suggested that we should analyze the company's sales, profits, margins, future plans, management quality, etc. and decide if the company is worth investing in. He was of the view that if we select the right company we would never have to sell the stock and a higher price paid for the stock would eventually be recovered with the scope for outstanding returns.

The last book that I read suggests a combination of all the methods mentioned above and I am currently implementing it. The results seem good so far even though the Indian and Global markets have suffered huge losses after the bankruptcy of Lehman Bros.

That's how my journey of investing in stocks has been so far. But the question that I still can't answer is whether I was destined to like stocks (because of my father) or was it fate (bad paying job forcing me to look for an alternative to earn more money) or is it that I just made a choice (irrespective of my father's liking for stocks or the bad paying job)?