Nucleus Software Exports Ltd. – Multibagger Analysis

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.

image

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

Screener URL: http://www.screener.in/company/531209

CMP: 232.00

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. But not too impressive. image
Durable Competitive Advantage Moderate. image
Future Growth Drivers Next 2 years an IT boom should happen.  This could benefit the company. image
Conservative Debt (long term debt < 3 Net Profit) Yes. image
Debt Equity Ratio, Current Ratio 0 (Very Good) image
Return on Equity must be Above Average 17 (Good) image
Low CAPEX required to maintain current operations Not. image
Management is holding / buying the stock Promoter holding 57%.   No increase in past 3 years. 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 Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE 11 (average); PB 2 (average) image
Cash Flow Positive, Net Profit % greater than 8% Yes. NP% is 20%. image
Paying Dividends, Tax Yes. Yes. image
EPS Growth Rate 50% for immediate past year & 30% from previous. image
Jump in Trailing Result EPS Moderate. image
Jump in Quarterly Result EPS Flat. image
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) image
Price Movement Graph, 52 Week High & Low 270/80 image
Volume Analysis High Volume image
Power of Brand Moderate. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Not in current search. image

Declaration

Considering the recent past EPS jumps & overall good expectation on IT market, we declare it as a 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.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Blog at WordPress.com.

Up ↑

%d bloggers like this: