Alerted everyone. Now stock up at 8% days high.
Posts in category Value Pickr
Shivalik Bimetal Controls Ltd (SBCL) (24-08-2023)
Guys, I find there have been too many non-value additive posts in this thread, especially after the promoter stock sale transaction. Please note the textbook rule for promoter transactions is – promoter buying is always a positive, but promoter selling is not necessarily a negative. One has to go behind the reasons why the promoter has sold and then judge.
A few days after the sale Shivalik promoters have issued a press release and explained their reasoning behind the sale. Take it or leave it, but do not clutter the thread with your own views which matter little. Such posts waste reader’s time, make it difficult for someone to follow the business and reduce the overall quality of the discussion. Please refrain from such actions.
Infosys Limited – Are we getting a discount or no? (24-08-2023)
Absolutely fair point.
I wonder when the management was ready to pay up to Rs 1850, what was the intrinsic value as per them and also what growth, discount assumptions they used.
Screener.in: The destination for Intelligent Screening & Reporting in India (24-08-2023)
Piotroski Score is different in Screener and Trendlyne for some companies
Like
Emami Ltd
Globus Spirits Ltd
Greaves Cotton Ltd
JINDALSAW
Lincoln Pharmaceuticals Ltd
Man Infraconstruction
Nava Ltd
Salzer Electronics Ltd
Sasken Technologies Ltd
Zydus Wellness Ltd
?
Simple Investing (24-08-2023)
As mentioned would share my Trent story so far…
Trent – A company with perennial super high valuations, difficult to catch…but excellent DNA
Around 2005 when I landed on my first job, I did not even know what a Dmat account is, what are shares or even what is investment. Untill next 4-5 years, did not even do a simple FD and spent all I had or money simply lying in savings account.
Trent was around Rs 50 during this time (hovering 30-90 during extreme bull and bear of 2005 to 2010)
Later got married, still had not seen much of Westside nor Star bazaar and neither knew existence of a silently growing retail giant…2012 to 2014
Trent was around Rs 100 during this time
All this time right from 2005 till 2012…the only giant in retail I knew of was Big Bazaar, Pantaloons, Brand Factory, even Central…so it was mostly the Big Bazaar group.
What brought my attention to Trent?
Surprisingly when I think back, it did not start with typical Peter Lynch theory that I admire and even follow – Buy what you see…Here it was more of Track what you read…why I say track is because all the way from 2014 till 2020 – I only tracked Trent!!!
It reminded me of one conversation I had with a close Gujarati friend who happened to be a qualified CA and active stock trader…He used to target stocks with deep value only, the kinds with hidden assets and undiscovered value and used to do really well in those unknown names…One day I mentioned about Trent to him in 2015 when it was still trading at PE of 100+ if I am not wrong. To my surprise he said to just go for it if I had been tracking it since an year…he somehow knew my extreme conservative style back then and my thought process also and hence the advice to take the plunge…
Trent was at Rs 100 back then…I did not take the plunge…
From 2015-16 onwards, I started to see the rise in business & presence of Westside & Star Bazaars…So, after seeing the business progress all the way from 2016 till 2019, it seems finally Track what you read became Buy what you see…if I am not wrong, I took first tracking position in 2019 … thats also because from 2015 – 2019 when Track what you read started transforming to buy what you see…the stock was not giving me any chance to buy as it galloped from 100 to 700+ peak just before Covid crash. I might have taken a tracking position at Rs 500 in 2019.
During the crash, I was very well read about the business, had seen the impacts of their strategy first hand… so made purchases from 2020-2022 at levels of mostly Rs 500 till Rs 1000. Average may be somewhere in between.
What I liked about Trent?
- Tata Group – Long term vision & Ethics
- Noel Tata – Chairman of Trent had a clear differentiated strategy of profitable expansion and not mindless expansion. Probably that’s why the stock was languishing at Rs 50 till 100 for such long time. Those who understood this long term strategy well must have loaded it back then and rest like me, who kind of understood but not confident & immature, would have tracked. Larger souls would have simply bought Page Industries instead.
- Private Label focus without compromising on the quality of Private Labels. (Costco & other such US giants who focused on private labels survived retail cycles better)
- Not only ZARA partnership but the ZARA (or eventually even better) of India – Inventory management in fashion is incomparable.
- Near 2008-09, when many big retailers either perished or came close to perishing, Trent stick to its strategy and survived.
- During Covid crash, when there was a big if on future of brick & mortar retail – Trent wildly expanded!
- The power of unknown – With an excellent group like Tata, the power of unknown is probably on our stride rather than a risk. I would have never known the stupendous rise of Zudio. I am too small to judge that. I can but only trust the group. So, while not denying that unknown is and will always be a risk in investing but in case of Trent, only because of Tata group, it worked favorably so far…
Disc: Invested & Biased. Not a buy/sell recommendation. Post only for academic purposes and learning. I can be wrong in all my assessments. Not eligible to give any advice.
Prakash Pipes and Fittings (PPFL) – Not just Pipes (24-08-2023)
Screener is not updated i guess. Here is the notification given to the exchanges:
Have been receiving these updates frequently in last one or so month.
Kalpesh’s Portfolio (24-08-2023)
ADD-SHOP E-RETAIL
Promoter shareholding changes
March 2019 – 62.99%
Number of equity shares – 64,74,125
Equity capital – 6.47cr
March 2020 – 62.99%
Number of equity shares – 64,74,125
Equity capital – 6.47cr
March 2021 – 62.99%
Number of equity shares – 1,13,29,716
Equity capital – 11.33cr
Promoter shareholding – 71,45,660 same as previous year
Bonus issue of 48,55,591 shares fully paid up bonus equity shares on Friday, July 24,
2020, in the ratio of 3:4
March 2022 – 58.07%
Number of equity shares – 1,92,56,701
Equity capital – 19.26cr
Promoter sold 9.65Lakh shares.
Promoter shareholding – 1,11,82,356 shares
Bonus Issued – 7,926,985 equity shares of Rs. 10 each through bonus issue vide exchange ratio 7:10
March 2023 – 36.03%
Number of equity shares –2,83,10,000 shares (Approx)
Equity capital – 28.31cr
Promoter shareholding – 1,02,00,093 shares
Promoter sold 9,81,910 shares
Bonus Issued – None.
Warrants – Issue Convertible Warrants to Non-Promoters of the Company on Preferential basis (Approx. 89,53,299 warrants issued as per my calculations)
As per my understanding promoters tried to please shareholders by issuing bonus shares in FY21 & 22, business continuously demanding more outside money as they are growing more than their means, so they had to issue warrants in FY23. As warrants were to issue to non-promoters, promoters shareholding further gone down.
Promoters sold 19.46 Lakh shares in Feb-May 2022, in that period stock was trading at 17 to 20 PE, which was a good time to sell. So basically there are two possibilities I see,
- Promoters took advantage of high market valuations, but it seems unlikely as it was bulk deals and shares mostly purchased by Thobhani family, Kebbehali Panchilingaiahumesh & Mahendra Pratapsinh Khengar, Together these people bought around 17,41,578 shares which is equivalent to sale of promoters. They may to be friends & relatives of promoter.
- Promoter may need money for his children to start new business, as per recent development of resignations of all children’s and appointment of new CFO, something is now well. May be children are unhappy with father’s decisions, maybe they want to do separate business.
As promoter is now flooded with money, there are chances that he can take advantage of low market prices to increase shareholding, but as per today’s company update, I think more of his son want to start own business, so may be part of this money not coming back.
New shareholders ie. Thobhani family, Kebbehali Panchilingaiahumesh & Mahendra Pratapsinh Khengar now may have part in decision making of company which seems good development as promoters are not good in handling finance.
As promoter shareholding is very low, they will try to increase it or try not to decrease it further by dilution, so chances of more dilutions are less and mindless growth should also settle to comfortable 20-25% a year.
Note : Not sebi registered analyst, this information is for study purpose only.
Invested, may be biased.
Timex Group (TGIL) – time to take notice? (24-08-2023)
I had sent a long list of questions to the company. At the AGM yesterday the management answered some, side stepped some. Given below are some of the points noted down from the interaction (E & OE).
- Two thirds of the business comes from four brands – Timex, Gc, Guess and Versace (not fully sure the names are captured correctly)
- New product launches contributed 35 % of the revenue this year, more than 1000 new products were launched during the year
- Around 2.8 million watches were sold during the year
- Two thirds of the business comes from the trade channel i.e., retail stores.
- South & North contributes about 60 % of the business, then comes West followed by East. Top 10 cities contribute about 50 % of total business.
- Capacity utilization was almost 95 % and for the year, 2.8 million watches were sold. The largest was Timex analogue.
- OEM business is 16 % of the total business (This is Flipkart / Myntra I understand). We also do manufacturing for other Timex subsidiaries around the globe.
- Marketing expenses will be 9 to 10 % of revenue this year. We got Rs.75 crores worth of exposure due to IPL sponsorship.
- A Long-Term incentive plan was introduced this year – basically a performance linked bonus to some of the key employees
- On margins – Current margin is at 10 %, we do not give forward guidance. There is a 7 to 8 % delta between Timex’s own brands vs license due to customs duty etc.
- Company has started selling at Duty Free stores at airports, are also looking at mobile and electronic stores for smart watches
- Women watches are growing much faster than men’s watches
- No plan to enter new categories now besides watches
- Purchased Services expense of Rs. 15 crores – this pertains to temporary people hiring / DSA cost, mainly selling cost.
- Dividend will take a few years. First the retained losses which are now Rs 27 crores must be erased, then preference dividend needs to be paid off and only after that dividend can be paid to equity shareholders.
- Just Watches acquisition: They do not manufacture watches. By end October, we will take over all 16 stores, plus the website. We will run them on a FOFO model. Last year turnover was Rs.25 crores approx. It is an all-cash deal.
Overall, my impression is that the management is reluctant to share information with outsiders. This could be because unlike many other multinationals operating in India, TGIL’s parent is a closely held company and hence not mandated / used to sharing information with outsiders. Nevertheless, the new CEO seems to be doing well and one can still hope for improvement in future. Company performance has certainly improved, and stock continues to trade close to its ATH indicating investors are hopeful. I had reduced my exposure some time back but continue to hold on to the remaining for the time being.
Hitesh portfolio (24-08-2023)
Hitesh bhai, Thanks so much always for these fantastic practical insights that are never found in any book. Could you pls explain in detail on this scuttlebutt method of investing and how can one identify change in trend timely ?
Hitesh portfolio (24-08-2023)
@MorningStar Two vital fundamental changes happened in last qtr. are 1.Yuken Kogyo Co. Limited, the technical and financial collaborator of your company, has increased its stake in the company by 4.62% with a capital infusion of 62.90 crore in June 2023 (Chairman’s message AR) 2. Your company will now be setting up capacity to manufacture the complete range of products available in the group.This investment will fund the objective to manufacture for customers in India and also to capitalize on its competitiveness to manufacture for customers across the world. (MD’s message AR)
But multiple its trading at and past revenue records aren’t attractive enough as mentioned by Hiteshbhai