How Could You Miss A “Deep Moat” Stock Backed By All The Stock Market Gurus?

In my piece of 4th November 2014, I drew attention to the fact that MCX has the unique privilege of being backed by a large number of ace investors such as Rakesh Jhunjhunwala, Radhakishan Damani, Prof. Shivanand Mankekar, Kenneth Andrade & Prashant Jain. Each of the stalwarts has entrusted a huge chunk of his wealth to the stock.

I also pointed out that Rakesh Jhunjhunwala has equated MCX to what CRISIL was in 1999. He calls MCX “unique” and in an “unassailable” position.

The same sentiment is expressed by Ravi Dharamshi of ValueQuest. He recommended a buy on the basis that MCX has huge operating leverage because the costs are fixed and the scalability is huge. Ravi Dharamshi reiterated this advice in his latest interview.

Since that fateful day, three months ago, MCX is up 41%. Today, the stock surged nearly 13%.

Luckily, it is never too late to make amends.

HDFC Sec has issued an initiating coverage research report in which it has called MCX a “crouching tiger” meaning that huge gains are still due from the stock.

HDFC Sec has also issued a ‘company update report’ in which it states that it maintains its “high-conviction positive stance” on MCX on account of (1) significant business operating leverage (2) potential for non-linear growth driven by conducive policy framework.

Edelweiss has also issued a buy report in which it states that MCX is “Fortifying its pole position”. The report points out that the exchange model’s inherent strengths, Reins in strong hands (Kotak) and structural growth levers in place make it a buy.

Of course, MCX does have a number of risks associated to it which are enumerated in the research reports. We need to carefully mull over the data and take an independent informed decision about what needs to be done.