Saksoft Ltd. – Multibagger Analysis
Saksoft is a leading provider of Information Management solutions to successful organizations around the world. We deliver success by helping clients to consolidate, organize and manage the vast volumes of data they collect.
Company URL: http://www.saksoft.com/
CMP: 102.50
Warren Buffett Checklist
| History of Consistently Increasing Sales, Earnings & Cash Flow | Yes. 30-50% growth every year. |  |
| Durable Competitive Advantage |
Yes. Their IM, Managed Services should bring branded & iterated returns. |
|
| Future Growth Drivers | Increased customers towards cloud & managed services should boost the income of the company. We expect tough times for the company around 2016-18 period, exit & re-invest advised during the period. | |
| Conservative Debt (long term debt < 3 Net Profit) | Yes. | |
| Return on Equity must be Above Average | Yes. Above 15% | |
| Low CAPEX required to maintain current operations | Moderate. Cash flow is negative. |  |
| Management is holding / buying the stock | Holding. 75% promoter holding which is impressive. | |
| Price is Under Valued (< intrinsic value) | Yes. | |
| Stock Price is consolidating (now) | Yes. | |
| Stock Price is growing in past years along with EPS growth | Not really. It might take few more years for the stock to come into lime light, provided there is same growth level. | |
Additional Futurecaps Checklist
| PE, PB Ratio | PE 6 Good PB 1.2 Good (Please note that some sites refer to Standalone PE at 17; while we are considering Consolidated PE & Financial values) | |
| Cash Flow Positive, Net Profit % greater than 8% | Not Positive. Net Profit almost around 8% | |
| Paying Dividends, Tax | Yes | |
| EPS Growth Rate | 40% average. But latest quarter is not impressive. |  |
| Expected Gain in 5 Years | 10. | |
| Power of Brand | Yes. | |
| Corporate Governance, Reputation of Leaders | Yes. | |
| Fraud reported | Nil. | |
Declaration
Here by we declare that Saksoft holds multi-bagger properties. But the recent quarter showing only 10% EPS growth & Latest PE ratio is high. We have to wait some more time to get clarity on this stock.
Disclaimer
Futurecaps recommends 20 to 25 multibaggers per year, we recommend 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. So we recommend the reader to put his/her own thoughts & invest wisely.
Super duper analysis. Please share your views on ABM Knowledgeware and Trigyn Technologies. Awaiting your valuable repply
Your earlier pick Orbit Exports has already become 2 bagger…!!
Thank You Bhavin!
ABM was a good value pick few years back, but I remember the valuations are not attractive for now.
Trigyn seems to be another good pick; but we have to run a screener on that.