Nucleus Software is a leading global IT products and solutions company that delivers consistent value to mission critical business processes of Banking and Financial Services sector. With a robust portfolio of IT products and solutions for the BFSI industry that has been delivering value consistently over the last 27 years, Nucleus Software is one of the pioneers who have successfully taken the India IT product story to the world map.
Company URL: http://www.nucleussoftware.com/
Screener URL: http://www.screener.in/company/531209
Warren Buffett Checklist
|History of Consistently Increasing Sales, Earnings & Cash Flow||Yes. But not too impressive.|
|Durable Competitive Advantage||Moderate.|
|Future Growth Drivers||Next 2 years an IT boom should happen. This could benefit the company.|
|Conservative Debt (long term debt < 3 Net Profit)||Yes.|
|Debt Equity Ratio, Current Ratio||0 (Very Good)|
|Return on Equity must be Above Average||17 (Good)|
|Low CAPEX required to maintain current operations||Not.|
|Management is holding / buying the stock||Promoter holding 57%. No increase in past 3 years.|
|Price is Under Valued (< intrinsic value)||Yes|
|Stock Price is consolidating (now)||Yes.|
|Stock Price is growing in past years along with EPS growth||Yes.|
Additional Futurecaps Checklist
|Consolidated PE, PB Ratio||PE 11 (average); PB 2 (average)|
|Cash Flow Positive, Net Profit % greater than 8%||Yes. NP% is 20%.|
|Paying Dividends, Tax||Yes. Yes.|
|EPS Growth Rate||50% for immediate past year & 30% from previous.|
|Jump in Trailing Result EPS||Moderate.|
|Jump in Quarterly Result EPS||Flat.|
|Expected Gain in 5 Years||If the 30% growth is maintainable the company should give 15-20X returns including PE-resizing. (Please note that in 2 years recession is forecasted, need to sell & reenter from bottom)|
|Price Movement Graph, 52 Week High & Low||270/80|
|Volume Analysis||High Volume|
|Power of Brand||Moderate.|
|Corporate Governance, Reputation of Leaders||Yes.|
|Fraud reported||Not in current search.|
Considering the recent past EPS jumps & overall good expectation on IT market, we declare it as a multibagger.
2-3% of your portfolio.
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.