SUDAR & YBRANT

Hi,
Sudar Industries and Lycos Internet (Ybrant Digital) have been troubling e for quite sometime now due to the constant fall with no bottom in sight.
Both have decent fundamentals and ratios. Just dont know the cause of the constant fall.

What do you guys do? Average on a fall OR hold with strict Stop-Loss? Alternatively, do people here practice pyramiding? If so, then in what ratio?

 

Re: SUDAR & YBRANT

Bump

 

I had Ybrant and sold with heavy loss. If you are not very long term investors then you may ultimately sell it as loss. I got into it recently thinking it will start upmove and give me heavy gain.
I was not very content with it seeing is Balance sheet. Still I bought it. That can be said that I became greedy.

See, In 2012, it has raised 3 times of equity. But its result (Net Profit) fallen from there. It should have multiplied 3 times. You yourself see the net profit and equity in 2012 and after that.

Another things, I read on their site is that they are looking for more acquisitions, etc. Why? Acquisitions are generally proved wrong. Most of the time / most of the time means more than 50% , acquisitions fails. So, big risk of money going waste. Company should have created worth from its own resources.

Its cash flow is not steady. So, risk is high that whether it can gain cash in future or not. No clear vision.

After telling all this, I also feel that current valuation is fine and not costly. It should gain. This believe was one reason to enter here but its money eating habit and sharp falling made me sell.

Now, you decide. You can comment on my post or add more for me to read.

 

Both look good at first sight but are clear candidates of rejection (even for long term investors).

Did you check the cash flow of Sudar? Forget about the company, forget about other investors, I am wondering how management is even managing to feed their own family without cash.

Real source of their survival is Equity and Loans. Don't get carried away by their P&L or Balance sheet.

In simple words:-
Would you want to marry a person who is already under debt burden and have NO CASH even to buy you an ice cream but has tall buildings and factories? If Yes, then go ahead and buy more. If No, then don't even look at such stocks. Choice is yours.

 

https://rakesh-jhunjhunwala.in/forum/index.php?topic=138.0

 

Sir you are right acquisitions may fail but to be specefic the area in which lycos is working needs existing setup for faster realisation of revenue and moreover setting up a new venture in a new place is altogether a challenging task and requires a lot of capex. Also if all of its acquisitions add up to both its top and bottom line plus is continuouly increasing its margins there is no harm in it then.
Just for an example, the whole Tata group is made from acquisitions,check it for yourself (Tetley,JLR,etc.)
Also the company is very skeptical is choosing the target and is not agressive at all.
Its been still looking up to setup or acquire in India.
Lets see where it takes us.