Sakuma Exports - A potential Multibagger?

Hi,

I was looking at the Sakuma Exports scrip. I think the company is highly undervalued. The business has m-cap of around 60 cr and the FY-15 consolidated topline of 1800 cr! The company's business is described as follows (taken from their official website):

Sakuma Exports is in the business of Exporting commodities and merchandise from India. Company commenced operations toward the end of Financial Year 1999-2000 as a partnership firm with exporting Pulses. Over the years Company developed exports of various agro based commodities and merchandise. The Company is engaged in exports of various commodities like Red Split Lentils, Onions, Peanuts, Peanuts in shell, Brass items, Sugar, Wheat Flour, Soya Bean Meal, Rape Seed Meal, Chilly, Jaggary, Watermelon, Sesame, Seeds, Maize, Sun Flower Meal, Rice, Chick Peas, Yellow Split Lentel, Seasame Seed Meal, Castor Seed Meal, Castor, etc.

Company exports in around 75 countries.


It has a dividend yield of 2.5% and P/E of around 7.5. Book value is 47/- and company has been grown their topline and bottomline EPS consistently. The debt is a bit on the higher side, but that is also manageable. Have a look at their stats in Money control in terms of their performance over the years. Purely on the basis of valuation, I think its a multibagger in the making.

Thoughts/comments appreciated!

 

Dont just look for cheap stocks !!! Look for cheap stocks with some value . Sakuma Exports , i dont think the management is good enough . I cant really understand what the company is focussing and whats the future !!! So be carefull with this stock !!

 

What makes you think that the management is not good enough? Is there any case of fraud on them? They have been growing their business at a decent pace. What part of their business looks dubious to you? (Btw, I am not defending the stock or the company, I am just curious to know so don't take it any other way plz ).

 

Well they are going at decent pace but what's the future of this business?

 

Very rightly said. People forget the power of compounding and investing in quality stock. Here is a snapshot of Sakuma

 

Nice snapshot of the numbers @MoneyWorks4ME thanks!

 

Missed out on Sakuma train. When I bought at 35, I sold it at 50. Now its UC at 97. Sigh!

 

Its the same story with everyone. Have a couple myself


Gennex labs - april 2015 @2.3/- sold at 5.4/- and stock peaked at 8.4 earlier this month. Consistent selling the last few days. Now at 7.01/-

Tanla Solutions - Sept 2015 @ 23.35 and sold in oct @ 29.9. Stocked peaked at 39.05 earlier this month and currently at 37.65

 

Bought at 26 and 35 .... still holding a few..

 

I missed out on jumbo gains from Force Motors and Symphony Coolers (600% gains)

 

I missed out the "kitex" bus. At 8 rs in 2008 i thought it is a penny stock which won't grow.
Still sad that i did not buy that...

 

I think force motors ( whilst i remain invested at 1100-1200 levels) is overpriced. The rerating trigger was bmw deal which i believe isnt a game changer and warranting the meteoric rise seen in the stock.

 

@ dineshkapoor27 can we consider entering now @ current price.

 

@raamuk I have added some today. I think its more because it has a lot of interest now and should go up 10-20% more from here, I think. But fundamentally, I think it is now at 12 PE so the valuation comfort is a bit low. I will try to hold around 15-20 PE and then sell it. Its a bit risky right now, but you can still add (like I have added a bit) but make sure that the exposure is not too much. Good luck!

 

Had a few pointers emanating from a very cursory look

- effective tax rate seems abnormally low : is this due to any tax excemptions on export earnings?
- march 2015 profit bouancy on the back of other income
- very low OPM
- Lower interest cost despite increased borrowing ( march 15 vs 14)
- operating cashflow negative??

 

Sachin primarily the stock ipad undervalued. Recently government gave exemptionts for export houses to improve exports. The opm is low, but stock was too undervalued when wrote here. The profits have been increasing and there's low equity in retail market.

 

the opening line has your answer - MCap as % of Sales
do remember it is a trading company, take a look at MMTC, STC India

would you believe that at the turn of the century or +- 2 years - Adani Exports was once the biggest ForEx earner for India!

 

would you believe that at the turn of the century or +- 2 years - Adani Exports was once the biggest ForEx earner for India![/QUOTE]
What happened to adani exports? is it still alive? @BombayBoy

 

it is alive and kicking under the new name Adani Enterprises Ltd.

 

Just wanted to point out that Sakuma has corrected a bit at around 63, and one of its main exports is sugar which is in shortage now in terms of supply. So Sakuma might see some margin expansion or some offloading of inventories at higher prices. Might be an interesting bet now, with sugar prices expected to rise.