Warren Buffett Quotes

Tuesday, August 19, 2014

MARKSANS PHARMA - BOOK PARTIAL PROFIT

Marksans Pharma recommended @ Rs.4 about one year back ( Recommendation Link HERE ).Currently this stock is trading above Rs.50 , a return of more than 12 times during this period . At current rate ,  company's market cap is around Rs.2000 Cr . Purely on valuation basis , - for an average risk taker -  recommending to take some profit at current level .

Saturday, August 16, 2014

POLYPLEX CORPORATION LTD - BEGINNING OF A NEW CYCLE ?






"The best thing that happens to us is when a great company gets into temporary trouble...We want to buy them when they're on the operating table."



I believe , the above quote by Warren Buffett is apt for Polyplex Corporation at this point of time.This company needs no  Introduction to  senior investors and it was a favorite stock of  FII's,Mutual Funds ..etc during 2008-2011 period and  its stock price traded above four figure mark during  2010.This company  lost its glory thereafter due to reasons beyond the control of promoters and now in a recovery path . Let us look into its past - present and future.

  The company  



Polyplex corporation is an India based multinational  company  manufacturing plastic films (PET, BOPP & CPP)  used for packaging, electrical and other industrial applications .Company having manufacturing facilities in   six countries  viz - Netherlands. China. USA. Turkey. Thailand. and   India . Company is the  world's 4th largest producer of thin polyester film and one of the few fully integrated companies in the entire world. Products manufactured by Polyplex selling in more than 80 countries.Major portion of  company’s products are used for manufacturing  flexible  packaging materials for  food and FMCG items. Having said , Polyplex is a global company operating through various subsidiaries . One of its subsidiary in Thailand named ‘Polyplex Thailand’ is a listed company in Stock Exchange of Thailand (SET).Company is geographically well diversified . 28 % of total sales coming from India ,26% from Europe ,18 % from North America ,17 % from South East Asia and balance from Rest of the world.Till 2012 ,company’s performance was robust backed by good demand and better realisation.Citing the good demand scenario during 2009-10 , on a global level ,many companies started to add large capacities and started commercial production by 2012-13 .This resulted in oversupply of the products and at the same time the peak of global recession adversely affected the demand scenario.Due to this reason,Polyplex reported loss on a consolidated level in last Financial year.

The Road Ahead

Good consolidation happened in this industry in past few years .As per the management of Polyplex, major major  players in this industry is only completing the already started projects ( if any ) and   not thinking about  any major expansion in near future.   On the other side demand condition is improving worldwide . In India itself ,BOPP film production reported more than 25 % growth in June 2014 over the same month in the previous year.Worldwide the trend is almost similar  . Price of company’s  products  also showing firm trend. For the past many years company was mainly concentrating in thin pet films(thickness below 50 micron) and now  started the production of thick films which is  used in many industrial segments other than packaging like photovoltaic and flat screen panel for TV’s and Computer monitors .In addition to thin and thick grade PET films ,company’s  Bottle Grade PET Resins plant at Turkey at an advanced stage of completion.Bottle grade PET finding applications in packaging of Soft Drinks, Carbonated water,Mineral water ..etc and there is lot of growth potential in these sectors.

Valuation and Recommendation

 

As mentioned at the beginning ,Polyplex is a vertically integrated global player with a turnover of more than Rs.3200 Cr  with geographical presence in all major markets.This large company is currently trading at a market capitalisation of just Rs.695 Cr  . The real irony is , Polyplex’s listed subsidiary  ( Listed in Thailand Stock Exchange)  trading at a market cap of Rs.1500 Cr (INR) .On a consolidated basis debt of Polyplex is close to Rs.1421 Cr which mainly raised for capacity expansion and the benefits of  this expansion is just starting to reflect . On the other hand , company holding a cash and Bank Balance of Rs.900 Cr and its total reserve is close to Rs.2000 Cr .Debt equity ratio is 0.86 . Company’s book value is more than Rs.600 where it is currently trading close to 1/3 of its book value.Company is managed by a group of highly professional ,ethical and investor friendly management .Before the issues set in, its dividend pay out was 70-80 % annually and rewarded share holders with bonus. Promoters holding close to 47 % stake without any pledge and other large investors and mutual funds holding another 31 % .This business is a cyclical one and I believe ,some early signs of a revival in this business is visible now. As a fully integrated global major ,Polyplex will be one of the biggest beneficiary of emerging trend . Now company reported its latest June quarter result where its top-line increased from Rs.694 Cr to Rs.855 Cr . On net level company reported a  profit of Rs.27 Cr against a loss of Rs.9 Cr . As Warren Buffett mentioned ,it is a good company passed through some tough times in recent past .I believe , for long term investors it is the right time to enter in it @ CMP of Rs.216.Stock listed in both exchanges.


Link to Company Website HERE

Link to Polyplex Thailand  HERE

Disc: It is safe to assume that I have vested interest in Polyplex


Tuesday, August 12, 2014

ALPHAGEO INDIA , ARROW COATED PRODUCTS - RESULT UPDATES


 ALPHAGEO INDIA LTD




This stock recommended @ Rs.38 about 10 months back which is currently trading  @ Rs.338 . Company reported June quarter numbers as follows :



Recommendation Link HERE


ARROW COATED PRODUCTS 

This stock recommended @ Rs.12 about one year back which is currently trading around Rs.138 .Today company declared its standalone June  quarter result . Since majority of its business coming through subsidiaries , no meaning in reaching conclusions based only on published result. Company normally declaring consolidated result only on full year basis.

Recommendation Link HERE




Sunday, August 10, 2014

MOLD-TEK PACKAGING , GUJ.BOROSIL , ASIAN GRANITO , EXCEL INDUSTRIES - RESULT UPDATES

MOLD-TEK PACKAGING

This stock recommended last week @ Rs.78 which is currently trading around Rs.106. Company reported latest June quarter result as follows:



GUJARAT BOROSIL LTD


This stock recommended  @ Rs.8 which is currently trading around Rs.26. Company reported latest June quarter result as follows:







ASIAN GRANITO LTD

This stock recommended  @ Rs.49 which is currently trading around Rs.73. Company reported latest June quarter result as follows:





EXCEL INDUSTRIES LTD

This stock recommended  @ Rs.127 which is currently trading around Rs.192. Company reported latest June quarter result as follows:






Long term investors can still HOLD all these stocks.





Saturday, August 9, 2014

WORTH READING - 2



   

       
Lot of new investors entering into stock market in every bull phase .But not even 1/10 of them surviving here after the following bear market . This is not due to the problem of market but the problem of investor . For majority of investors ,stock market is a place to make some quick bucks by testing their luck.They are considering stock market as a place to gamble and happy with the peanuts they can earn on a daily basis .But in reality - for a dedicated ,patient and disciplined investor – it is one of the best way to create wealth over a long period . For that, each investor should  develop and follow a system which is suitable based on their risk taking capacity and expectations from market. Many of the terminologies used in market itself is confusing for a new comer. Lot of methods to follow in market for selecting stocks for investment. First of all we must decide in which boat we are planning to travel. While someone selecting fundamental approach for stock selection some others following technical methods . Again some groups following  a value based approach  while the others selecting  growth oriented stocks. Above all of these factors common sense and ability to connect the happenings around us with the fortunes of companies and respond quickly with decisions is the  most important factor deciding success in stock market.Lot of  books are written by great investors based on fundamental and technical analysis .But it is not very easy to find a book  explaining stock selection based on practically viable methods using our common sense and at the same time without any heavy usage of technical terms and equations . This week , I am happy to introduce one such rare book written by  renowned Investor – Basant Maheshwari- who invented many multi baggers at  an earlier stage. This book named as – The thoughtful Investor- explaining his own strategies in very simple language .One most important point  is ,this book is written in the Indian background where most of the books in this subject published with western back ground which is not easy to understand for a beginner. This book is really helpful to find out the winning horse from the large number of listed companies .In the pastmany of my readers requested me to name some good books on Investment. Since I could find many similarities in this book with my view of stock selection ,I am very happy to introduce this book to you .Cost of this book is Rs.999 , but it is not a waste but worth much  more than that .

Online purchase and  details about this book HERE

Friday, August 8, 2014

PATELS AIRTEMP - IMPORTANT UPDATE

Patels Airtemp (India) Ltd is one stock recommended 3 months back around Rs.55 which currently trading around Rs.80. Those who carefully read the latest annual report may surprised to see that on page No .6 company indicated the pending order book as  Rs.136 Lakhs  against an order book of Rs.40 Cr last year. As a share holder ,  I  contacted with the concerned department of company and they clarified that the same was a typographic error . Let us hope  new corrected AR will be uploaded within few days in BSE and Company website . Requesting my readers to avoid any panic selling due to this misunderstanding . I believe ,company is in a firm wicket and better days  ahead for it.

Link to Original Recommendation HERE

Thursday, August 7, 2014

CAPITAL FIRST / M M FORGINGS - UPDATE

 CAPITAL FIRST LTD

This stock recommended just one month back @ Rs.210 which hits its 52 week high today @ Rs.271. Yesterday company reported good numbers for June quarter .Still recommending to HOLD it for long term.

Recommendation Link HERE

  M M FORGINGS LTD

This stock recommended on June 28,2014  @ Rs.187 which hits its 52 week high today @ Rs.284 Yesterday company reported  substantial improvement  in its June quarter numbers .Still recommending to HOLD it for long term.

Recommendation Link HERE





Wednesday, August 6, 2014

FIRST TIME INVESTOR'S GUIDE TO STOCK MARKET

Courtesy : ET

Valuation Parameters You Should Know


Knowing them will enable you to buy stocks at the right price.

PE RATIO: SHARE PRICE/EARNINGS PER SHARE

The price-to-earnings ratio is the most commonly used valuation parameter. A lower PE indicates either an attractively valued stock or one whose prospects are poor. You may compare the current PE of a stock with its own historical valuations (say, 5-year average), the industry average. the industry average, and the PE of a broad market index, such as the Sensex or S&P 500.

PE ratio can be of two types: forward and TTM (trailing 12 months). Forward PE is based on the earnings estimates provided by analysts. The advantage of using it is that stocks respond to the prospects of a stock. The risk is that earnings estimates often go wrong. TTM PE is based on past four quarters' earnings, so it can't be wrong. However, it is backward looking.

PB RATIO: PRICE/BOOK VALUE
The price to book value compares the price of a stock with its book value (value of shares originally issued, plus retained earnings). The book value is a proxy for the liquidation value of the company. It is a good measure for judging the valuations of asset-heavy companies. It is also well suited for banking and other financial services companies. It is not a good measure for asset-light, service firms.
EV/EBITDA: ENTERPRISE VALUE/EBITDA
This valuation ratio compares the enterprise value of a stock with its EBITDA (earnings before interest, tax, depreciation and amortisation), a measure of a stock's operating profits. The EPS gets affected by 'other income', which is income not derived from the company's operations, but from, say, sale of an asset. This can artificially inflate the EPS and bring down the PE. This doesn't happen with EBITDA. The latter is, hence, a better reflection of a company's earnings capability. EV or enterprise value measures a company's value. It is the sum of the market value of the firm and its longterm debt, minus its cash.
PEG RATIO: PE RATIO/EPS GROWTH RATE
Here you compare a company's PE ratio with its 3- or 5-year EPS growth rate. Sometimes, a company's PE may appear high compared to its own historical valuation or the industry average. This usually happens with high-growth companies. If you wait for its PE ratio to fall, it may never happen. The PEG ratio, by comparing the PE with the EPS growth rate, offers a justification for investing in such a stock. The PEG ratio should be be below 1. If it is less than 0.5, it is very attractive. 

Before You Invest

No quick gains 
 
At the very outset, investors must accept that the equity markets are not a route to quick riches. "Greed and speed are the worst enemies of sound investing," says investment analyst R Balakrishnan, a former mutual fund CEO. All direct investments in equities should be made with a time horizon of at least 3-5 years. If you ignore this tenet and adopt a high-churn strategy, you will soon come to grief. "You may get lucky on your first punt and make some quick money. Then, inevitably, you will buy something that will keep sinking," says Balakrishnan.

If the markets tank and the uneducated investor is left holding stocks of suspect quality, his corpus value erodes rapidly and does not recover for a long time, if ever. Many investors get so badly singed by their first such brush with the equity markets that they decide to stay away from stocks forever.


Educate yourself

Before you start investing directly in equities, make the effort to educate yourself. "If you won't invest time in educating yourself, then direct stock investing is not for you," says Balakrishnan. Learn the ropes of investing from an unbiased source with no conflict of interest. Says Dhawan: "Many brokerage houses today run short-term learning programmes on equity investing. Brokerages earn more when you transact more. Hence, they have a vested interest in teaching you investment strategies that involve a high churn," he says.

In our view, the approach with which you stand the best chance of making money is one based on fundamental analysis and buy-and-hold. Also, by reading investment classics, you may have the best chance of developing an approach that is time-tested.

Valuation Parameters You Should Know


Knowing them will enable you to buy stocks at the right price.

PE RATIO: SHARE PRICE/EARNINGS PER SHARE

The price-to-earnings ratio is the most commonly used valuation parameter. A lower PE indicates either an attractively valued stock or one whose prospects are poor. You may compare the current PE of a stock with its own historical valuations (say, 5-year average), the industry aver ..

Valuation Parameters You Should Know


Knowing them will enable you to buy stocks at the right price.

PE RATIO: SHARE PRICE/EARNINGS PER SHARE

The price-to-earnings ratio is the most commonly used valuation parameter. A lower PE indicates either an attractively valued stock or one whose prospects are poor. You may compare the current PE of a stock with its own historical valuations (say, 5-year average), the industry aver ..

Valuation Parameters You Should Know


Knowing them will enable you to buy stocks at the right price.

PE RATIO: SHARE PRICE/EARNINGS PER SHARE

The price-to-earnings ratio is the most commonly used valuation parameter. A lower PE indicates either an attractively valued stock or one whose prospects are poor. You may compare the current PE of a stock with its own historical valuations (say, 5-year average), the industry aver ..

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