Fallen Angels

Can we all collectively track the Fallen Angels in this thread. For whatever reason.

Examples:

1) Motherson Sumi - Volkswagen Crisis
2) DCB bank - Aggressive growth controversy

Please add the stocks, you think have fallen, 30- 40 , 50 %.. and are very reasonable right now.
Also have the potential to bounce back.

 

In Sensex 30 companies " 19 companies " FII 's reduce their Stake , between July - September 2015 months
nearly - Rs. 18,000 Cr. cash withdrawn from market July - September 2015 this is total buy sell variation

Reduced in Companies %

1.Hindalco 3.42 %
2.Axis Bank 2.38 %
3.Gail 2.22 %
4.Vedanta 1 %
5.Dr.Reddy 1%
6.SBI 1 %
7.icici bank 1 %
8.TCS 1 %

Increased FII ' s stake in Sensex Companies %
1.ITC 5.24 %
2.CIPLA 4.22 %
3.SUN PAHRMA
4.BAJAJ AUTO
5.BHARTI AIRTEL
6.M & M

source :EENADU news paper

 

Vaibhav Global would qualify for this and so would Eros though in the case of the latter there is a hint of a scam. IPCA labs would also qualify.

 

BASF and Ambuja Cements?

 

Kaveri Seed Company is a beaten stock too

 

Jubilant Industries and Nucleus Software fell more than 30%

 

Your selection of IPCA is quite apt as problem is temporary & surmountable.

 

Any one interested in long term prospects of kaveri can go through the note i prepared on it https://oneupondalalstreet.wordpress.com/2015/10/28/kaveri-seeds-2/

 

Any views on Larsen after yesterday's fall

 

Stock is a candidate of many demergers in future,which is already planned. otherwise L&T is a mammothh company & pride of India but ,in my opinion,not worthy investment candidate.L&T represent country's infrastructure prospects.

 

May I add 2 more

Bharat Forge - fallen from 1300 and now at 860 range. Didnt crash.. but fell gradually because of north american sale number.

I feel very bullish about this stock, as it is a defense-make in india play.

Treehouse- fallen from 440 range now to 270 range. hitting new 52 weeks low - Because of promotor pledging and receivables issues.

Disclaimer - I hold both stocks. I intend to buy more bharat forge.

 

100% Agreed. Bharat Forge is very good quality stock. Excellent management ability.

 

Bharat Forge : may remain lacklustre the next few quarters. The dec quarter is expected to be the worst so scrip could correct further. Management remains optimstic that 2018 targets would still be met.

 

They are a solid company, but it is best for those who want to buy into this stock to understand the dynamics of this whole defence play. For example, Baba Kalyani is essentially saying that he will design and make defence products even without orders and then market that to the Defence in India. Given how defence procurement operates in India, they will run rings around Bharat Forge on pricing. What is going in favour of the company is the quality of the management and the fundamentals of the company. Actually, I would like them more if they did not have this fatal attraction to the Indian defence business

 

I would be interested to hear your views on the impact of political regulation and the royalties issue on this company and on the sector. Thank you.

 

Bosch @ sub 20,000/-

 

Hi,
Assuming you know what the whole case is and you are only interested in the impact it could have on kaveri. here are my views below.

1. If Monsanto wins the case against the govt the maximum that kaveri will have to pay in excess of what they have paid is 64 Cr. They have currently not made any provisions for it and that will reduce their current pat by 64cr The adjusted net profit will be ₹147 cr vs. a reported ₹221 cr and adjusted PAT margin of around 22% vs. 33%
TTM PE than becomes 16 times earnings from current close to 12.

However if monsanto lose kaveri might get a refund for excess royalty paid in the last two year which could be a one time income increase of close to 200cr.

The management in the con call seemed confident that if Monsanto wins then the govt will not have control over msp, so kaveri will be able to raise prices in future and maintain margins. Also the management believes that the govt is more likely to win the case.

In either case this will only have short term consequences. Kaveri has the cash balance to pay 64 cr and this will not have any material impact on the business going forward. I believe kaveri will do well over next 3 - 5 years irrespective of the outcome of the royalty case

 

Thank you. Are you comfortable in stating that going forward, the government will not cap retail prices in their increasing effort to woo farmers ? The other lingering doubt has always been - if the technology comes from Monsanto then what is the intellectual property inherent in Kaveri ? Is it then just a distribution play ?

 

@Fun_Da_Mentalist . thanks for your view.

When Baba Kalyani says, he will make products and market it, I dont suppose he will burn the entire cash and do it.
I assume that there will be some R and D, and making prototypes and show casing them.

However I do agree that this Defense ministry, procurement etc can be a headache.

Having said that, it is only the listed company which can be trusted in the defense play.
The other listed being Reliance(pipavav), which I dont trust.

Tata's and Mahindra's will also participate, but they will do through subsidiaries, so we cant invest there.

I will seriously think about your perspective and have a close watch on how it is going to play out.

 

Kaveri's management believes that govt either can control both or none they cant control MSP if they cant cap royalty. So that way the management believe they can maintain margins.

What monsanto gives to all seed companies is tech Boll guard II which is for cotton seeds and has high resisitnace to bollworm pests. This tech is patented under India and hence all seed companies have to pay royalty to Monsanto.

However this does not make cotton seeds a commodity business or only a distribution paly.The final yield still depends on how good the seeds are. Not every company who uses BGII have the same yield. kaveri has 90 different seeds in their portfolio. Kaveri has its own R&D team and are targeting new hybrid vegetable seed and High density planting which the company believes will bring revenue growth going forward.

Seeds only account to 5%-7% of the total cost but are the most important ingredient. So farmers are always willing to pay to for quality if they know yields are high.