Can Fin Homes >> Multibagger Analysis
In this article we would like to evaluate the Multibagger Potential of Can Fin Homes Ltd. The primary attraction is this Branded Institution is quoting below Book Value.
About: CFHL was promoted in 1987, the "International Year for Shelter for the Homeless" by Canara Bank in association with reputed financial institutions including HDFC and UTI. Now NHB is also an important equity holder in CFHL.
Let us start the job:
Warren Buffett Checklist
Additional Futurecaps Checklist
|PE, PB Ratio||PE around 5, PB around 0.7 which are really attractive.|
|Cash Flow Positive||Negative Net Cash Flow, but Operating Cash Flow is positive.|
|Paying Dividends, Tax||Yes.|
|EPS Growth Rate||10% to 20%, but the Trailing year should show higher rates.|
|Expected Gain in 10 Years||Considering EPS growth around 20%, the stock price should double every 4-5 years. For a 10 year period this could yield 4 times returns & a PE Peak around 12 should yield total of 8-10 times returns.|
|Power of Brand||Branding attracts more sales, more profit margins! Company have the trust & fame of CANARA BANK!|
|Corporate Governance, Reputation of Leaders||Company consistently behave well on corporate governance norms.|
The current past year results are yet to declare, it shown above 30% growth in Net Profit & yield higher EPS resulting in lower PE. We expect the new PE Ratio around 3-4.
Considering the under-valuation, growth rate, brand name, we declare Can Fin Homes as a potential multibagger.
Although it is a B Group stock, but being large cap we recommend the regular 5-10% allocation of your total yearly stock corpus.
Futurecaps recommends 20 to 25 multibaggers per year, We expect a 25% to 50% allocation of your savings in equity. The stocks recommended here are gone through Analysts of several years experience in stock market. Although they were successful in predicting future multibaggers, the overall stock market is a risky game. Filtering quality stocks from the total of 4000 companies should reduce the total risks. The past performance of the company might not sustain in future, but through proper diversification we are sure about multibagger-returns in the total portfolio. We recommend the reader to put his/her own thoughts, invest wisely taking responsibility by themselves.