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September 14, 2014

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Flex Foods – Multibagger Analysis

by Futurecaps Advisor

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.

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Price is Under Valued (< intrinsic value)

Yes.  image

Stock Price is consolidating (now)

Not.  4x difference between high & low.  

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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.  

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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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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.

Read more from Multibaggers
3 Comments Post a comment
  1. Bhavin Mehta
    Sep 14 2014

    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.

    Reply
    • Sep 15 2014

      Yes Bhavin. Let us hold until 2 year bull run end Or any permanent problem with company ensuring q-o-q eps.

      Thanks.

      Reply
  2. Sep 30 2014

    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

    Reply

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