Menon Bearings – Multibagger Analysis
Update: This stock really is Not a Multibagger up to date. Since the Valuation change it is No Longer a Multibagger in our view. You can check other stocks from our latest Multibaggers pack.
Futurecaps is a SEBI Registered Research Analyst providing Multibagger service to Indian Stock Market.
Menon Bearings Ltd. established in 1991, is one of the few companies in the continent having fully integrated manufacturing facilities under one roof, to produce a wide range of critical auto components like bi-metal Engine bearings, Bushes & Thrust Washers for light & heavy automobile engines, two wheeler engines as well as for compressors, refrigerators, air conditioners etc. MBL is Listed on the BSE ( Bombay Stock Exchange ) & is globally positioned with business activities spanning 24 countries around the globe. Exporting 35 % of its production capacity, with exports growth at more than 25 % per annum, the engineering capabilities at MBL enjoys strong brand equity among leading OEMs all over the world.
Company URL: http://www.menonbearings.in/
Warren Buffett Checklist
|History of Consistently Increasing Sales, Earnings & Cash Flow||Yes.|
|Durable Competitive Advantage||Moderate.|
|Future Growth Drivers||Good.|
|Conservative Debt (long term debt < 3 Net Profit)||Yes.|
|Debt Equity Ratio, Current Ratio||0.55|
|Return on Equity must be Above Average||18%|
|Low CAPEX required to maintain current operations||Moderate to High.|
|Management is holding / buying the stock||Promoter Holding 75%, Flat|
|Price is Under Valued (< intrinsic value)||Yes|
|Stock Price is consolidating (now)||Moderate.|
|Stock Price is growing in past years along with EPS growth||Yes.|
Additional Futurecaps Checklist
|Consolidated PE, PB Ratio||PE 18; PB 3|
|Cash Flow Positive, Net Profit % greater than 8%||Yes. Yes.|
|Paying Dividends, Tax||Yes|
|EPS Growth Rate||30% average.|
|Jump in Trailing Result EPS||Yes. 50%.|
|Jump in Quarterly Result EPS||Yes. 100%.|
|Expected Gain in 5 Years||8-10 times.|
|Price Movement Graph, 52 Week High & Low||132.00/28.00|
|Power of Brand||Moderate.|
|Corporate Governance, Reputation of Leaders||Yes.|
|Fraud reported||Not in current search.|
|Read Analysis Report for Future Plans, Capacity expansion||No serious expansion plans on card.. LINK|
Based on the value & growth factors, we declare the company as a moderate Multibagger. But as the PE is 18 we prefer to invest at lower levels.
2-3% of portfolio.
Futurecaps recommends 100 to 150 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.