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September 16, 2014

Ruby Mills – Multibagger Analysis

by Futurecaps Advisor

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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