Archive for September, 2014

Shree Hari Chemicals – Multibagger Analysis

September 26, 2014

Company URL: http://www.shchemicals.com/

Screener URL: http://www.screener.in/company/?q=524336

CMP: 170.00

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes. image

Durable Competitive Advantage

Moderate.  Growing company. image

Future Growth Drivers

Moderate. image

Conservative Debt (long term debt < 3 Net Profit)

Good. image

Debt Equity Ratio, Current Ratio

0. Very Good. image

Return on Equity must be Above Average

ROE 94% image

Low CAPEX required to maintain current operations

Moderate. image

Management is holding / buying the stock

Promoter Holding 45%.  Management Increasing holdings for past 3 years. image

Price is Under Valued (< intrinsic value)

Yes. image

Stock Price is consolidating (now)

Not. image

Stock Price is growing in past years along with EPS growth

Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE 1.2 (Trailing) PB: 2 (Good) image

Cash Flow Positive, Net Profit % greater than 8%

Yes. image

Paying Dividends, Tax

Yes.  Past years have some differences but. image

EPS Growth Rate

100% for past 2 years. image

Jump in Trailing Result EPS

Yes. image

Jump in Quarterly Result EPS

Yes. image

Expected Gain in 5 Years

Taking standard growth of 30%, and if persisting,  the company can provide 15-20 times returns. image 

Price Movement Graph, 52 Week High & Low

52 week high is very high compared with 52 week low.  (certain investors will hesitate to buy the stock) image

Volume Analysis

Less than 15 thousand. Good. image

Power of Brand

Moderate.  Growing company. image

Corporate Governance, Reputation of Leaders

Moderate. image

Fraud reported

Not in current search. image

Declaration

Based on the strong EPS growth and Quality value parameters, Management confidence, we declare the stock as a Multibagger.

image_thumb1

Allocation

1-2% of your portfolio.

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.

Tata Metaliks – Multibagger Analysis

September 25, 2014

Established in the year 1990, Tata Metaliks began its commercial operations in 1994. Growing from strength to strength over the last two decades, the Company today has emerged as one of the biggest pig iron manufacturing and selling companies of India, with an annual production capacity of 345,000 tonnes.

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Company URL: http://www.tatametaliks.com/

Screener URL: http://www.screener.in/company/?q=513434

Moneyworks4me URL:

CMP: 102.70

Warning

This is a turned around company with past quarters with losses and most recent 2 quarters shows positive turnarounds.  Company reserve also turned negative.

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Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Flat as it is a Turnaround company. image
Durable Competitive Advantage

India’s largest pig iron producer.

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Future Growth Drivers Few challenges exists. image
Conservative Debt (long term debt < 3 Net Profit) Not. image
Debt Equity Ratio -2.22 (Horrible)  image
Return on Equity must be Above Average Not. image
Low CAPEX required to maintain current operations Moderate. image
Management is holding / buying the stock 50% holding. Flat. image
Price is Under Valued (< intrinsic value) Not. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Moderate.  Company turned profitable in recent past. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE 3.5 (Good); PB –0.3 (Bad) image
Cash Flow Positive, Net Profit % greater than 8% Yes. Not. image
Paying Dividends, Tax Not. Not. image
EPS Growth Rate 100  image
Latest Quarter EPS Growth 100% above. (turnaround story) image
Expected Gain in 10 Years If the turnaround story persists, there is 20% growth forecast able making 1-15 times returns.  image
Price Movement Graph, 52 Week High & Low 52wh is 145 & 52wl is 33  image
Volume Analysis Moderate in volume  image
Power of Brand Yes. Part of Tata Steel.  image
Corporate Governance, Reputation of Leaders Yes.  image
Fraud reported Not in current search.  image

 Declaration

As you can see the above value parameters does not say it as multibagger.

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Considering its recent quarter turnaround, it could possibly become a multibagger.  Investors with high-risk appetite with strict-diversification can try this.

Allocation

1-2% of portfolio.

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.

Mahindra Lifespace Developers – Multibagger Analysis

September 23, 2014

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Mahindra Lifespaces has been at the forefront of transforming urban landscapes by creating sustainable communities and is India’s first Green Homes developer. With this philosophy deeply engrained, we espouse Green Design and Healthy Living as the foundations of all our projects. One of the first companies to receive the Platinum rated green homes pre-certification from IGBC, today all the residential projects are pre-certified green buildings by IGBC.

The Company’s pan-India presence and the development of India’s first integrated business city have all contributed to Mahindra Lifespaces being recognised as a developer with a pioneering spirit internationally and in India.

Mahindra Lifespace Developers Ltd, the real estate development business of the $16.5 billion Mahindra Group, is a leader in sustainable urbanization, through the creation of residential and integrated large format development across India. Mahindra Lifespaces has a footprint of over 7.3 million sq ft of completed projects and over 11.3 million sq ft of ongoing and forthcoming projects. The company has pioneered the concept of an integrated business city through ‘Mahindra World City’ developments in Chennai and Jaipur. These developments cover 4,375 acres and house over 100 reputed global companies, providing an integrated environment for Life, Living and Livelihood. The company’s residential footprint spans across Mumbai, Pune, Delhi NCR, Nagpur, Hyderabad, Chennai and is poised to venture into Bengaluru.

Company URL: http://www.mahindralifespaces.com/

Screener URL: http://www.screener.in/company/?q=532313&con=1

CMP: 550.00

Fundamental Study: LINK 1 LINK 2

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes. image

Durable Competitive Advantage

Green Development.  Brand.  Yes. image

Future Growth Drivers

Urbanization, 2 Year expected Real Estate Boom in India. image

Conservative Debt (long term debt < 3 Net Profit)

Yes. image

Debt Equity Ratio, Current Ratio

Debt Equity Ratio is 0.9 which is higher.  Current ratio is good. image

Return on Equity must be Above Average

ROE is 8% only. image

Low CAPEX required to maintain current operations

Not. image

Management is holding / buying the stock

Promoter holding is 50%.  Decreased holdings from past 2 years. image

Price is Under Valued (< intrinsic value)

Considering recent jumps in quarterly results, Yes. image

Stock Price is consolidating (now)

Yes. image

Stock Price is growing in past years along with EPS growth

Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE 28 (bad), PB 1.8 which are good.  Projected PE is < 10 for trailing year. image

Cash Flow Positive, Net Profit % greater than 8%

No. Yes. image

Paying Dividends, Tax

Yes. image

EPS Growth Rate

10%, –30%, 120% image

Jump in Trailing Results

Yes image

Quarterly Results Growing

Yes.  Huge jump in quarterly profit & EPS – watch for sale of projects.  This may be seasonal only & not consistent. image

Expected Gain in 2 Years

Taking standard growth level of 50% for next 2 years, we expect stock to triple. image

Price Movement Graph, 52 Week High & Low

Good. image

Volume Analysis

Good around 15k. image

Power of Brand

Yes. Part of Mahindra group of companies. image

Corporate Governance, Reputation of Leaders

Yes. image

Fraud reported

Not in current search. image

Declaration

The stock is multibagger.

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Allocation

3-4% of your portfolio.

Warning

We expect Indian Real Estate to go boom in next 2 years & bust there after.  Good to hold for 2 years & exit the stock for re-enter at bottom after 4 years.  Please add your studies too.

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.

FC Analyst Sell Updates

September 22, 2014

Please find the sell updates on recommendations:

  1. Sold Bajaj Finserv due to sluggish quarterly performance.  Gain 100% YoY.
  2. Sold Mahindra Finance on reason sluggish quarterly performance.  Gain 30% YoY.
  3. Sold Muthoot Capital Services on reason sluggish quarterly performance.  Gain 90% YoY.

As these stocks were held over 1 year from recommendation date, no capital gain tax applies on profits. (please verify your buy date)  We moved the capital to better performing-promising stocks for time being.

Note: Accelya Kale Solutions liquidated in past month with 100% profits.  Will  update you when we can reenter this counter.

Above is our view on selling the stocks.  Please take your decisions accordingly.

Anuh Pharma – Multibagger Analysis

September 17, 2014

One of the leading manufacturers of Active Pharmaceutical Ingredients (API’s). Registered in 1960, the company has grown several folds and earned recognition besides gaining the trust of a strong customer base. Today it is one of the largest producers of macrolides in the country.image

Company URL: http://www.anuhpharma.com/

Screener URL: http://www.screener.in/company/?q=506260

CMP: 316

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes. image

Durable Competitive Advantage

Claims as largest produce of macrolides in the country. image

Future Growth Drivers

Moderate. image

Conservative Debt (long term debt < 3 Net Profit)

Yes. image

Debt Equity Ratio, Current Ratio

0. Impressive. image

Return on Equity must be Above Average

21%. image

Low CAPEX required to maintain current operations

Moderate. image

Management is holding / buying the stock

65%. Slightly increasing over years. image

Price is Under Valued (< intrinsic value)

Moderate. image

Stock Price is consolidating (now)

Yes. image

Stock Price is growing in past years along with EPS growth

Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE 15, PB 3 image

Cash Flow Positive, Net Profit % greater than 8%

Yes. Yes. image

Paying Dividends, Tax

Yes. Yes. image

EPS Growth Rate

30% in latest year. image

Jump in Trailing Results

Yes. image

Quarterly Results Growing

Yes. 50% above. image

Expected Gain in 5 Years

Considering the growth of 40% as standard, the company should give 8-10 times in 5 years. image

Price Movement Graph, 52 Week High & Low

3x difference only. image

Volume Analysis

Low volume. Good. image

Power of Brand

Moderate. image

Corporate Governance, Reputation of Leaders

Yes.  image

Fraud reported

Not in current search.  image

Declaration

Considering the above qualities, we declare the stock as a potential  multibagger.

image_thumb1

Allocation

2-3% of your portfolio.

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.

Ruby Mills – Multibagger Analysis

September 16, 2014

Screener URL: http://www.screener.in/company/?q=503169

CMP: 303

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes. But not steady.  Should be a 2 year hold multibagger. image

Durable Competitive Advantage

Moderate.  Cotton Business prospects are dull in our view. image

Future Growth Drivers

For next 2 years it should be good. image

Conservative Debt (long term debt < 3 Net Profit)

Not. image

Debt Equity Ratio, Current Ratio

High Debt.  CR good. image

Return on Equity must be Above Average

17%. image

Low CAPEX required to maintain current operations

Good. image

Management is holding / buying the stock

75% good. image

Price is Under Valued (< intrinsic value)

Yes. image

Stock Price is consolidating (now)

Yes. image

Stock Price is growing in past years along with EPS growth

Not. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE 4, PB 0.9 image

Cash Flow Positive, Net Profit % greater than 8%

Yes. image

Paying Dividends, Tax

Yes image

EPS Growth Rate

30% in past & trailing. image

Jump in Trailing Results

Yes image

Quarterly Results Growing

Yes image

Expected Gain in 5 Years

For 5 years we cannot comment as the growth is not steady.  For 2 years it should give 2-4X returns. image

Price Movement Graph, 52 Week High & Low

Not Bad. image

Volume Analysis

Low Volume which is Good. image

Power of Brand

Not impressive brand. image

Corporate Governance, Reputation of Leaders

Okay. image

Fraud reported

Not in current search. image

Declaration

Even though there is trailing, quarterly EPS jumps, the company growth is not steady, high debt & so on.   Hence we are not confident to declare it as multibagger.

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Traders are like Albert Einstein!

September 15, 2014

The core purpose of stock market is to meet companies with investors where:

  • Companies can raise money
  • Investors can earn from appreciation, dividends

Stock exchanges found another game over it known as:

  • Trading

This is just working over the price-movements.  Good for exchange and government as they:

  • Extract brokerage
  • Margin fee
  • Service taxes
  • Capital gain taxes

Unfortunately, 99% traders took in the wrong way of multiplying wealth.  They expect 100 to 1000% returns in a trade leveraging high & with no money management skills.

Albert Einstein

These traders feel themselves like Albert Einstein as the trader-world immerse them with lot of ideas:

  • Moving Averages
  • Exponential Moving Averages
  • Candle Sticks
  • Relative Strength Index

They explore it with great passion & their passion would have turned destructive, once they realize that:

  • 99% Traders won’t make wealth in trading
  • Trading is one of the brain-storming job where the investor works hard to destruct wealth
  • Technical signal works wrong with External news
  • To make 1 rupee in 1 hour they have to be smarter than the 99% rest
  • Trading is not passive job. It requires time, energy & infrastructure.  If one takes a whole year of trading profit, they could have made double the money by going for a regular job. 🙂
  • The tips providers sell tips for living, instead of trading-compounding 1000% every month and becoming rich person in the world
  • Big money wins requires big money losers on the other end

Trading is not the core purpose of market. It is the manifestation to squeeze money from amateur-investors who do not wanted to take the hard ship of analyzing company, holding long term to multiply money.

A Note

We have seen successful traders though.  They use big money, active time, sophisticated software & solid money management skills.  But, they are not becoming super-rich like Warren Buffet. They trade for living.  If we see their yearly-guaranteed returns, it is much less than the fundamental way of investing comparing the active-dull-6-hour-trading they have to perform.

Madhav Marbles – Multibagger Analysis

September 14, 2014

Incorporated in the year 1989 as a 100% Export Oriented Unit, Madhav Marble & Granite Ltd. is a leading processor and exporter of premium quality granite and marble.

The company operates its Granite Division from South India(Salem, Tamil Nadu). The Region known for its rich reserves of metamorphosed granite. In conformity with its commitment to excellence, the company has installed the most sophisticated and environment-friendly granite processing machinery imported from Italy

image.

Company URL: http://www.madhavmarbles.com/

Screener URL:  http://www.screener.in/company/?q=515093

CMP: 40.00

Warning:

Madhav Marbles & Aro Granite have similar valuations.  Past 3 years shows Peak-Low-Peak trend.  We expect these sector companies to show high growth in next 2 years.  Once after that the stock should be exited.  Not long term multibagger.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. image
Durable Competitive Advantage Moderate.  Other better players exists. image
Future Growth Drivers Infrastructure growth of India should benefit this company. image
Conservative Debt (long term debt < 3 Net Profit) Yes. image
Debt Equity Ratio It is 0. image
Return on Equity must be Above Average ROE is around 6.  Very low. image
Low CAPEX required to maintain current operations Yes. image
Management is holding / buying the stock Promoter holding is 40%.  There is a slight decrease in holdings from past 3 years. image
Price is Under Valued (< intrinsic value) Yes. image
Stock Price is consolidating (now) Not. image
Stock Price is growing in past years along with EPS growth Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE 5, PB 0.25 (Very Good) image
Cash Flow Positive, Net Profit % greater than 8% Yes. Yes. image
Paying Dividends, Tax Yes. Dividend Yield is 3% image
EPS Growth Rate 50% on average. image
Jump in Trailing Results Yes. 15%. image
Quarterly Results Growing Yes. 50%. image
Expected Gain in 5Years Considering the growth of 30% and PE resizing to 10 it can provide 5-8 times returns in 5 years image
Price Movement Graph, 52 Week High & Low 40, 13 image
Volume Analysis Less than 10 thousand. Good. image
Power of Brand Yes. image
Corporate Governance, Reputation of Leaders Not.  Some shadows exists. image
Fraud reported Some fraud traces exists LINK 1 LINK 2 image

Declaration

Here by we declare that Madhav Marbales have Multibagger qualities.  But considering few bad reports, it is a High Risky Multibagger.  Need thorough analysis before investing.

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Allocation

1-2% of portfolio.

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.

Flex Foods – Multibagger Analysis

September 14, 2014

Flex Foods Ltd (FFL) is a part of Uflex Group involved in the business of packaging, information technology, communication, municipal solid waste & real estate with a total turnover of Rs 218.84 Billions (Dollar 474.19 Millions).
The Company is engaged in the business of agro based value added food products catering to the international markets mainly in Europe, USA, Canada & Middle East countries. The company started its commercial operations in 1992 by establishing an 100% EOU for vacuum freeze dried vegetables mainly mushroom and culinary herbs with a total processing capacity of 2000 MTs per annum. The Registered Office of the Flex Foods Limited (FFL) is situated at Lal Tappar Industrial Area, P.O. Resham Majri, Haridwar Road, Dehradun-248140 (Uttarakhand).

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Company URL: http://www.flexfoodsltd.com/

Screener URL: http://www.screener.in/company/?q=523672

CMP: 88

Fundamental Analysis: LINK 1 LINK 2

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes.

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Durable Competitive Advantage

Moderate on this factor.  

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Future Growth Drivers

Good growth expected for Indian Food industry.

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Conservative Debt (Current liabilities < 3 X Net Profit)

Yes.

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Debt Equity Ratio

0.44 which is slightly high.

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Return on Equity must be Above Average

ROE is 18.92 which is above 15

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Low CAPEX required to maintain current operations

Moderate capex required.  

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Management is holding / buying the stock

59% holding and it is flat for past 3 years.

image

Price is Under Valued (< intrinsic value)

Yes.  image

Stock Price is consolidating (now)

Not.  4x difference between high & low.  

image

Stock Price is growing in past years along with EPS growth

Yes.

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Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE: 8.78 , PB 1.7 (ok);

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Cash Flow Positive, Net Profit % greater than 8%

Cash flow is positive.  Net Profit % is around 16%.

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Paying Dividends, Tax

Yes

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EPS Growth Rate

40% as 3 year average.

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Jump in Trailing Results

Yes.  

image

Quarterly Results Growing

Yes. 100% growth in EPS qoq

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Expected Gain in 5 Years

Considering standard growth of 30% and PE resizing to 35 (peer-standard) the company should give 12-15 times returns in 5 years.  

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52

Week High & Low

88.95 / 21.85  (Already 4 bagging done)

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Volume Analysis

52000 which is slightly high

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Power of Brand

Yes. It is part of UFlex group.

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Corporate Governance, Reputation of Leaders

Yes.

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Fraud reported

Not in current search.

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Declaration

Here by we declare that Flex Foods is a mutt bagger stock.

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Allocation

2-3% of current portfolio.

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.

Update on Sell Strategy

September 14, 2014

When do we sell?

Our core idea is to buy & hold for long term there by benefit from capital appreciation & dividend yield.  But, following are the case under which force us to sell.

  1. When the stock is not performing well.  We check for consecutive quarterly results to decide on selling.
  2. When market bull run is going to over.  It is better to sell all stocks at this point else a bear run (recession) will destroy 80% of the yield

Now you can decide on:

  1. Whether to hold on a loss stock there by loosing all the profit earned.
  2. Replace a low performing stock (10% yield) with a high performing stock (50% yield)

Eg: A Reliance Communication investor started at Rs. 100 and watched till it grow up to Rs. 800 in 2008.  There after the company started making loss and had to see the  bottom price of Rs. 50.  This is absolutely foolishness.  We have to keep watch on the underlying performance of the stock.  Performance is the basis of price hike or collapse.

Similar cases are with Suzlon Energy, Unitech etc.

Let me know if you have any queries on this.

Futurecaps Chief Adviser.