FUTURE MULTI BAGGER COMPANY ANALYSIS

No I don't think it was to me.But many truths are universal,I dont practice my knowledge to full extent.

 

My intention is very clear we always learn from our experiences and also other' s experience also ..
So many times i told that Maters also make mistakes in their investment , they discussed those points also ...
in 2008 crash Rakesh ji also did same mistake , he said he neglect to put Stop Loss of his investments and he loose 1500 Cr. for that he said in a interview ,
I also like value investment , but on my own method ...

Fundamental analysis is very much required before going to by a stock no doubt , but warren buffet said on next day after buying that stock delisted from stock exchange or we going to keep it for 10 years he said ...it may not suitable to all but he said his rule , you may use or not use according to your risk apatite .....

fundamental analysis never discuss your risk reward ratios and it will give only accounts of that company ...and performance of that company ..but it may not continue in future same growth ...that is our risk and in middle so many companies compition and government taxes and global economy , technology and raw material cost management skills etc ... influencing that stock in future ... and very very long term investment i dont believe with my experience , i like short term to medium term investment model , i want to try for those stocks like ...evredy , suven , tvs motor like short to medium term investment with multibaggars only ....

it may not suitable to all ....
Experience is our teacher (always i believe this )....

 

Any view on below company??

KLRF LTD (BSE 507598 FV RS.10)

Company : Kovilpatti Lakshmi Roller Flour Mills, as KLRF with its brand as "Kuthuvilakku" came into existence way back in 1964 with the establishment of 46,800 MT of wheat flour at Gangaikondan in Tamil Nadu, near the southern tip of the Indian subcontinent. The various business of the company is as below :

Flour Mill Division : This is the flagship Division with licensed and Installed capacity of : 74,000 MT per annum working at 70% capacity (thus leaving scope for further scalability). KLRF has commissioned a traditional stone mill and transformed itself into well known manufacture of branded whole meal Atta which has more fibre, minerals, vitamins and rich in aroma. The company now has product portfolio of entire range of flour, which meets the demand across users such as Bakeries, Parotta Makers, Hoteliers, Sweet & Confectioneries Manufacturers and domestic end users. The company is pioneer in tapping high margin retail segment by launching half kg, 1 kg pack of various attas it manufactures, which is well accepted by the consumers due to its consistent quality, well recognized brand at affordable price. Company has Brands as : Kuthuvilakku, Kera Brand, Alamaram Brand for various basket of products.

Textile Division : In 1982, the company expanded into textiles business by the name of KLRF Textiles, a 30000 spindle unit and 1344 rotors, after further expansion it became one of the leading yarn manufacturer and exporter in the country. The division scored operating loss of 3 crore, this is mainly due to fall in yarn prices due to global slowdown and less off take from China.

Sheet Metal Division : KLRF SHEET METAL INDUSTRIES was established in October 1978. Initially this unit has been installed to cater the needs of M/S. LAKSHMI MACHINE WORKS. KLRF SHEET METAL INDUSTRIES is engaged in a diversified business like, ferrous castings, flour milling, textile spinning, sheet metal fabrication, plantation and flour milling machinery manufacturing, rice color sorting machine manufacturing and trading of electrical and Industrial goods.. KLRF SHEET METAL INDUSTRIES is also acting as a trading agent of Probat Werke of Germany ( for their entire range of Coffee Roasting machines ) and M/s. Mahlkonig , Germany ( for their entire range of Coffee Grinding machines ). KLRF SHEET METAL INDUSTRIES has got all the facilities required for sheet metal fabrication under one roof.

Windmill Division : Wind Mill Division at Aralvoimozhi Village in Kanyakumari District, Pazhavoor Village and Dhanukkarkulam Vilalge in Tirunelveli District, Tamil Nadu with a capacity of 6.25 MW. The entire power generated by the windmills is captively consumed. All the windmills are well maintained and the performance is satisfactory.

Engineering (Foundry / Casting) Division : The company has Foundry division with licensed and installed capacity of 10,800 MT per Year, which is running at 90% capacity and contributing 30% of turnover.

Investment Rationale : During 1st Half of FY16, the company achieved turnover of Rs 106 Cr, on which it earned net profit of Rs 5 crore, resulting EPS of Rs 10 per share in first six months only. In 2nd half FY16, company can double the turnover and net profit, which will result in EPS of Rs 20 per share for entire FY16. (In FY15 The turnover of the company in FY15 as 222 Cr, on which EBIDTA of 12.67 Cr was earned. Food Division earned EBIDTA of 9.3 Cr (56292 MT) accounting 59% of turnover, Textile division has incurred EBIDTA of -2.31 CR and Engineering Division has earned EBIDTA of 5.68 Cr.)

The management is optimistic on Food Division of the company due to consistent demand and favorable availability of quality wheat. Due to continuous losses and considering uncertainty in the sector, the management has decided to close down 2 units of textile division & 1 unit of sheet metal division, for which the approval has been obtained from shareholders. This will help company to wipe out loss and proceeds from sale will help the company reduce the debts. While in engineering division increased production as achieved due to availability of dedicated power supply. Increased production and improved performance is expected in FY16.

Valuation : The share of this more than 50 year old company with Fv of Rs 10 paid up and tiny equity of Rs 5 Cr only, having book value of Rs 46 and having TTM sales of 195 Cr & management holding of 51%, with recession proof business of Branded Food and high potential Foundry/Casting Heavy Engineering business, which is already making good profit alongwith ROE and ROCE of 14 & 11 percent and OPM margin of 13% is available at market cap of only 30 crore which is very cheap looking at the potential earning power of the company, as company has closed down its loss making division and proceeds of which is utilized to reduce debt, which again will improve the profit, which is already 6CR in last 3 quarters (Rs 12 EPS per Share). The current PE of 6 and market cap of 35 crore is very attractive as peers are trading at a PE of 20 and Mcap to Sales of 4, thus this turned around company can achieve EPS of close to Rs 30 TO 35 per share in net couple of years, if it can trade at PE of even 10 can give immense scope of appreciation in the long term.

 

@Mrkharb , @ Mr darth @Sashtriji@Fun_da_Mentalist @ other seniors -In this context , it will help more if wisdom gained in successful long term( 10 years and more) investments & trading investments is explained more elaborately ,by citing examples , with involved thought process. ..

 

RMSC
We wont let you escape with just a 'like'. Comeon share your experience. I'll pen something for sure

 

These are very good guidelines that you have given. Thanks for sharing Sir.

 

Actually experience is gained from failures and not success.

After every loss we must analyse: -
What were we thinking while we were buying that share at that price. Why was our logic flawed? How did we react (buy, hold or sell?) when share price started falling? Was our reaction justified? What did we learn from this failure? How did this experience help us later on?

I think we should share our failures. Other members must be supportive or else no one will share their failures and the experience they gained form it. If we can learn from each others experiences then we can surely make huge profits and avoid losses.

 

You may explore Rexnord Electrical,Keerthi Industry

 

Hi,

First I am not a trader..... the only charts I have ever understood are either the line/bar/pie charts learned when studying maths in school ,the one's that are included in ppt presentations at work and what the ECG throws out. I know that it must remain volatile ( up and down) and not a flat line .......

Long term investment : well i have been investing for long but longterm investments :

Oh i dont think i have invested in anything with a long term perspective ( except probably my dream home, kid education and upbringing and family).

Forget 10+ yr, when i buy a stock probably i dont even have a 5+yr view. Its more like a 18-24 month view. I thought this clearly emerged from an earlier post of mine to RMSC thread.... Wherein I picked only a few points of successful investing he listed.

For me, Success in investing has come from not just by investing good, but also purchasing of stocks basis just common sense, not ignoring and taking advantage of the ever emerging trends / signals (ofcourse still light years away from timing the markets right), taking out profits periodically, making mistakes, never regreting ones decisions and eventually listening to only oneself. Also always punt a little : once you are able to afford it.

Investing with a 18-24 month view: Does it mean my weighted tenor of holdings comprising my portfolio is low? Probably not. Stocks have remained in my portfolio for 10yr +, probably even 15+yr : but date of purchase I very much doubt goes beyond a few years ie churn even consistent performers but without replacing them. So taking out profits periodically and not ignoring and taking advantage of the ever emerging trends / signals

Knowing your investment goals, prioritising them too, honestly defining your risk apetite and sticking to it and not leveraging ever has been key too. So if I give you an example : my dream house led me to head overseas but with a clear returning back timeline ... On return when i found myself falling short : did not give in to the temptation of equities ( and it was bang in last bull run and despite being told i was being a fool not to invest in stocks). Two colleagues of mine were even able to buy 2BHK houses in Chembur an eastern suburb in Mumbai. For me it was crystal clear prioritisation : house first and which required adjusting my risk profile : capital protection vs even a low risk of loosing the corpus built for the house. I probably lost out ... Could be owning an additional house in Mumbai but i dont regret. This is pretty obvious by the very fact that I have shared it.

Use of common sense, being perceptive of small things or changes or trends around us. My buys like Gillete, Eicher, Britannia, Colgate, Maruti, Hero to name a few are basis just this simple trait and have multiplied many times over.

Enough of this discourse..... But before ending I must clarify I am not a senior member and must warn you that i am one with no market knowledge. My views could thus be like the Zimbabwe currency for you - pretty worthless. But who cares, for what matters is that they have helped me build a pretty and sizable portfolio.

Cheers

 

Don't know about your portfolio of stocks but your portfolio if fake ids on this forum has definitely become sizeable. Now 5. That's quite an achievement. Keep it up. You are definitely a top contender for the "spammer of the year" award.

 

when you invested in these stocks? at what price

 

Good points. Common sense is best approach at all times. Warren Buffett says investment is about temperament and attitude and not intelligence.

 

You are humbly requested not to initiate yet another controversy. If you dont like any post, kindly ignore it. Let us use this forum for learning

 

What is massage you would like to share with us as wisdom gained from your long experience , which we can use?

 

If China and Global Economy slow down in future .... which sectors are give some safety in our portfolio

i Think

1. Pharma & Health services
2.Consumer Products (FMCG)
3.Paints
4.Auto mobiles 2 wheeler
5.Banking Private

please discuss in this subject .....

 

100% Agreed. These are secular growth stocks. It is best to go for secular growth stocks IMHO because they are not dependent on factors beyond control. Pharma stocks are best IMHO with little FDA risk.

 

We can add sanitaryware stocks like Kajaria, Cera, HSIL and also real estate and housing finance cos to list because they are not dependent on China and Global economy IMHO.

 

Excellent suggestion sir ...sanitary ware stocks are very good stocks ...
and also we have to find domestic sales stocks also ...