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.

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

Screener URL: http://www.screener.in/company/?q=531209&con=1

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.

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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.

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