@akbarkhan Thanks for clarifying, I originally misunderstood what you had said. I also agree that many brokerages use this to show a higher growth.
Posts in category Value Pickr
P. I. Industries Ltd. – A Unique Business Model can make it a Great Play on Agri & CSM Space (11-12-2015)
I think this is good news . We know how promoters of cos like page continued to sell and price continued to go up - this will also help increase the free float and help in indices like msci ? Now a new window of speculative thought has opened up - will they sell out one day ? perhaps to a mnc like dupont ?
Anchor rate of corporate earnings growth (11-12-2015)
@diffsoft I fully agree with what you say. I was only suggesting that it could be the way the institutions calculate and get a higher growth rate. Not saying this or that method is correct.
Is there any good on-line library to borrow books related to investing (11-12-2015)
It is always expensive to buy books related to investing. i have seen books recommended by sanjay bakshi , vishal kandelwal, and many other.
And these books are not available on normal book renting websites.
So i was thinking if any of you guys know about borrowing the book
Anchor rate of corporate earnings growth (11-12-2015)
Very true. I see merit in what you say.
Like your work, I used to think with all this data. But I have moved on as I have got it wrong most times with these approximations.
Somewhere I read an academic paper - Best market returns happened in countries like Finland and Switzerland in the 80s when the economy was not growing fast. Reason attributed- In a stable slow growing economy, capital allocation was easier. Misallocation and experiments were minimized. Management didn't waste money on so called innovation, but promptly paid it back to the shareholders saying "Thanks".
Estimating growth rates is very difficult. You can have a range of outcomes. Market growth doesn't guarantee company's growth, to start with. Companies with increasing moat (~ increasing RoE) can claim at least existing growth rates. In bull markets, we try to estimate and invariably overpay for growth. In bear markets, we focus on value (with minimal growth projections) and get it right. Even though growth and value are connected at the hip, very few get it right focusing on growth estimates.
The only exact thing is the price you pay. Everything else is an approximation.
Anchor rate of corporate earnings growth (11-12-2015)
@hsriram - I get your point that a value investor needs to focus on the intrinsic value. But arriving at the intrinsic value often requires us to make some growth assumptions. So what growth assumptions should we make?
Looking at the growth assumptions that is touted around, I wanted to validate. Sure someone, somewhere, sometime will always be growing at a scorching pace; someone at a slower pace. So if I were to ask myself a question - suppose I throw a dart on the ticker board, what growth rate should I guess for the stock the dart hit? That led me to the question of anchor rate of growth.
You may ask well, just take the GDP growth rate. But as I conclude in my article, GDP growth rate has been poor, very poor, in explaining earnings growth. Maybe take sector growth, but they keep changing very now and then and hence not as reliable as I would like. Who fore saw negative growth for motorcycles a few years ago?
P. I. Industries Ltd. – A Unique Business Model can make it a Great Play on Agri & CSM Space (11-12-2015)
Here we go the information shared with exchanges -
PI Promoter stake sale.pdf (152.8 KB)
Edit:
Ok, now we know the reason behind the volatility.
- Personally, I'm a wee bit disappointed that Promoter has chosen to sell at a discount to market price. The price is 610 as per @manish962's post above.
- While we should respect promoter's personal ambitions and requirements as they are the ones who worked hard and made the company what it is today, I however also would like to derive that promoters would have felt that rapid growth phase might be over and future might be a stable, long term growth phase of 18-20%, so would have timed the stake sale accordingly. I believe Salil was also alluding to this 18-20% growth in multiple interviews recently.
- Fully agree with @hitesh2710 that focus will shift back to business and it's as business usual and the business fundamentals won't change.
P. I. Industries Ltd. – A Unique Business Model can make it a Great Play on Agri & CSM Space (11-12-2015)
I think without making conjectures, lets wait for definite news to come through.
And then watch the reaction.
All these things dont change the fundamentals of the company at all. So as I said before once these events are through, focus would again shift back to business.
P. I. Industries Ltd. – A Unique Business Model can make it a Great Play on Agri & CSM Space (11-12-2015)
they sold around 6% stake in the company