Vedanta, Tata Steel, Hindalco and NMDC.

Hi All,

These four stocks are almost its 6 to 7 years low. Want to accumulate any one of them as mentioned by Basant Maheshwari that commodity stocks should be bought when its trading at lowest level. I don't want to accumulate all of them but only one among these, which one should I buy for 2-3 years .
Thanks

 

I was having Hindalco,Tata steel and Vedanta.Today only I have sold Vedanta and Hindalco at huge loss about 50%.I may sell Tata steel soon.In this also loss will be 50%.I had hold these for more than 8 years.It is true that we should buy commodity stocks at down turn.But it seems here case is different.Tata steel and Hindalco acquired business in foreign countries at peak of cycle at heavy price.They have now huge debt and bleeding acquired business which is twice the size of Indian operations.Vedanta has invested huge money in Orissa ,with raw material mines cancelled and it is unviable to run that capacity with imported raw material.So now Vedanta has now 70000 Crore debt,with green field orissa project almost gone for a song.Now here there are two advesre situation for all three.Adverse commodity cycle,which these compnies might have faced successfully if had not done these failed acts.Now they will have to face music from two sides,huge debt and unviable new or acquired operations.Who knows thse are next JP Associates ,Punj Llyod ,IVRCL in making.I had also seen this loss in JP ,IVRCL and Punj Llyod.So I thought it is better to book 50% loss in comparison to 90% incured in JP,IVRCL and Punj Llyod.Situation is tricky just not commodity cycle.

 

Thanks Meenakshi and Kharb for your nice explanation. Today only NMDC made life time low of 92 rs. I also thought its better bet as debt free and cash on the book also good dividend yield. When there will be turn around this will do better for example look into Shipping corporation was at 28 even though it has debt now at 75 and NMDC has not debt, cash on the book, good dividend yield only factor is growth which sometime will happen when commodity cycle will turn.