Flex Foods – Multibagger Analysis

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/523672

CMP: 88

Fundamental Analysis: LINK 1 LINK 2

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. image
Durable Competitive Advantage Moderate on this factor. image
Future Growth Drivers Good growth expected for Indian Food industry. image
Conservative Debt (Current liabilities < 3 X Net Profit) Yes. image
Debt Equity Ratio 0.44 which is slightly high. image
Return on Equity must be Above Average ROE is 18.92 which is above 15 image
Low CAPEX required to maintain current operations Moderate capex required. image
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. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE: 8.78 , PB 1.7 (ok); image
Cash Flow Positive, Net Profit % greater than 8% Cash flow is positive.  Net Profit % is around 16%. image
Paying Dividends, Tax Yes image
EPS Growth Rate 40% as 3 year average. image
Jump in Trailing Results Yes. image
Quarterly Results Growing Yes. 100% growth in EPS qoq image
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. image
52

Week High & Low

88.95 / 21.85  (Already 4 bagging done) image
Volume Analysis 52000 which is slightly high image
Power of Brand Yes. It is part of UFlex group. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Not in current search. image

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.

3 thoughts on “Flex Foods – Multibagger Analysis

Add yours

  1. Good to see this post as I am holding flex foods from 55Rs levels. Now I will not think about profit booking unless something bad happens with the company.

  2. feloow investors,
    The chairman was convicted and jailed for 4 years in 2010. Politically connected guy (SP). The tax payout is low as 75% turnover is supposedly exports. So, there is a probability for a satyam or a geodesic. Only assuring thing is dividend payout in the earlier years. If the dividend payout is not in proportion with earning growth, its definite RED light. last year dividend payout is not a good sign. keep a close watch

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