This tool is very basic, rudimentary and qualitative tool only. Giving only 'Pass' or 'Fail' to each parameter is not going to give a crisper and clearer picture. How parameters like 'Company started by promoters' and 'dent on promoters' (just to take an example) would be defined and a pass/fail criteria would be applied. Better would be to list a set of criteria into three parts : 1. Quality of earning (profitability analysis); 2. Quality of Balance Sheet (leveraging, use of assets, etc.) and 3. Type of industry.
These three broad parameters with some sub parameters would give you a very detailed analysis for a stock.
Posts in category Value Pickr
Stock Anaysis Tool (09-09-2015)
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (09-09-2015)
There are many moving variables here. Let me try to list some of them here. This may not be exhaustive, kindly add to this list:
- Sugarcane acreage & production- this is further affected by FRP/SAP, Cane arrears, prices of alternative crops, monsoon
- Ehtanol mixing- Dependent on govt policy largely. Indirectly also affected by crude oil prices (lower crude oil prices reduces willingness of the OMCs to increase ethanol mixture)
- Global prices- If the prices globally firm up, it can be an outlet for the excess sugar stocks of Indan mills. Global markets have excess supply of 5.5-6 MN tonnes as of last season. India accounts for almost half of this. The global market is largely dependent on Brazil as it is the largest producer in the world. To that extent production in Brazil is a key variable. Production in Brazil begins in April/May. As per this article of 2014 the farmers and mills in Brazil are under stress and they expect the production and crushing to be lower this year. Also the brazilian Real is a key variable. The same has depreciated over the last year or so, further depressing the sugar prices.
- Govt measures of interest free loans/buying buffer quantity, import duty etc- some of these are more temporary measures which will not have an impact on sugar prices which is the key variable to look at/predict in my view.
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (09-09-2015)
Nice discussion here.
I have been reading up on sugar cycle in India and it seems that this season also there will a bumper production
http://www.agrimoney.com/news/indias-sugar-output-in-2015-16-to-stay-near-record-levels--8258.html
The main issue with the sector has been that the cane prices are still remunerative for the farmers to deter them from production, notwithstanding arrears from the mills.
The below is an excerpt from one of the sugar companies con-call
When do you see the cane acreage in India coming down? This is becausein the last four years we have not seen a significant decrease in the cane acreage beside the sugar industry going through a bad phase.
There is only one sign to look for. The historical sugar cycle has been based on cane arrears. Whenever arrears have exploded, you had the willingness of a farmer to move from sugar cane to other crops. If you look at the figure that I had mentioned on the call i.e on 31st of January 11,000 crore of cane arrears which will expand to
20,000 crore by the end of the sugar season is an astronomical number. That is the number at which one will see people moving away from sugar cane on an all India basis. Every State has different ramifications because different State Governments view cane price arrears in different manners. So that is the first sign to look at. The next thing of course is to look at the competing crops. Traditionally and I am speaking generally for the Country, the competing crops would be rice, paddy, and wheat. Now the prices of paddy and wheat have also suffered over the last couple of years. The moment you see any upswing in those prices, you will have farmers that will willing shift from Sugarcane to other crops
Maharashtra Scooters : Value of Listed Investments Make it a great value pick? (09-09-2015)
Thank you all for your inputs.
Just an update, I bought some shares of Maharashtra Scooters.
STEL Holdings also looks compelling in terms of value, but am resisting buying because it has never pays any dividend, I wonder why?
Thanks!
Maharashtra Scooters : Value of Listed Investments Make it a great value pick? (09-09-2015)
Similar story STEL Holdings ( Market Cap is 40 crores versus 380crores on investments )
Source:
http://smallcapvaluefind.blogspot.in/2015/05/stel-holdings-will-it-changes-fortunes.html
POKARNA LTD ( Stock opportunities ) (08-09-2015)
Alpesh, the Caesarstone price that you are suggesting includes Fabrication and Installation also. $10 per sqrft is the plain raw material cost of the Quartz stone out of factory to a dealer. I saw $10 /sqrft for a plain exporter is on the higher side, it averages anywhere between $7-$9.
Now, the nature of business model between CaesarStone and Quantra is different. CaesarStone has built a retail brand, they have their own fabricators, their margins are high. Its an opportunity for Quantra. If the management is capable, gradually they could develop similar business model and expand margins and market.
Right now they sell it a dealer, dealer sells it to fabricators. And some dealers have their own fabricators and few sell it to retailers directly. Most dont even quote a price to retailer. I did some market research, a dealer of Quantra sells it at $25/Sqrft in west coast USA. Ofcourse different color and different quality costs different.
Ramana’s portfolio (08-09-2015)
@pressy79t Most of my picks are due to my positive personal experience or from Valuepickr.
The first thing I usually do when I know about a company is - to do search on the company for any fraudulent, unethical or questionable deeds of the management. If I am not satisfied I don't do further research on the company.
Then I read interviews by the management and MD & A from AR for better understanding of the company and how gets impacted by macro economy. I also speak to friends if there any rumours which don't get published in news papers. Porters 5 forces framework also helps me a lot to understand the moat. Any red flags, I would stop further work.
Then I look at growth numbers, return ratios, cash flows, etc. I do check P/E, but it is not a show stopper. If I find any issues I will dig further. If not, I add the company with a tracking position. If my opinion about the company does not change for the next few months, I will add more. When I strongly believe the management I try to give benefit of doubt. If I find any any serious issues later I will still come out of it.
I try not to have more companies from same industry from portfolio management perspective. When economic indicators are bad, I try to reduce my exposure to stock market. I have seen three major crashes from 1998. I am lucky to escape with good profits two times. Once, I got screwed as I got greedy and leveraged my portfolio for real estate investment.
I feel most of the things in life are simple to understand, we complicate them unnecessarily (Last week, I was trying to measure portfolio risk by calculating co-variance, correlation coefficients, etc. based on historical numbers when I know by practical exp. that correlation coefficients would be close to 1 during major uptrends and downtrends when most of the stocks tend to behave in a similar way).
This is how I do it. It may or may not work for you.
Suven Life Sciences – Embedded triggers (08-09-2015)
Credit rating agency, CARE has revised rating of Suven Life Sciences’ long term bank facilities worth Rs 102.97 crore to ‘A-’ from ‘BBB+’. The rating agency has also revised rating of company’s short term bank facilities worth Rs 22.50 crore to ‘A2+’ from ‘A3+’.The revision in the ratings assigned to the bank facilities of the company’s takes into account the equity infusion of around Rs 200 crore primarily for the purpose of funding the progression of the company’s New Chemical Entities (NCE) pipeline which has led to improved liquidity position and improved capital structure as on March 31, 2015.
Maharashtra Scooters : Value of Listed Investments Make it a great value pick? (08-09-2015)
When I began investing, I had read a report on Tata Investment Corporation. Investments in such companies are to be treated as investments in mutual funds. The only triggers for re-rating of such stocks is if the underlying companies get re-rated. The "holding company" discount is also quite huge and normally more than 50%. This has been my observation too.
REPCO home finance – another Gruh in the making? (08-09-2015)
Real Estate investments are not happening in Ahmedabad, Mumbai and Pune of late - especially in the 25 to 70 lac segment. While Gruh works in a different segment, the impact of slowdown in RE in these regions should be felt there too.
Having said that, the Seventh Pay commission and OROP could help infuse some money in the economy.