When Prashant Jain rushed to the Wonderla Holidays counter, early in the morning, on the very first day of its listing, and grabbed a massive chunk of 10 lakh shares (6,89,000 + 3,11,000), we should have been alerted that something was going on. We ought to have grabbed our own share of the stock on that day.
Today, while the entire market was down, Wonderla Holidays surged 11.24% to Rs. 215, giving Prashant Jain a fabulous 32% gain over his purchase price of Rs. 164. What is incredible is that these gains have come in just about 15 days.
In hindsight, Wonderla Holidays should have been a no-brainer purchase for us. It has all the attributes that savvy investors look for in a winning stock. High ROE (31%), high entry barriers (difficult to replicate an amusement park requiring huge investment), pricing power, reputed & competent management (the promoters of V-Guard), niche segment, reasonable valuations (FY14 P/E of 17x), high growth trajectory etc, etc.
IIFL had in fact released two reports in which they had identified Wonderla Holidays’ salient points. In the first report (pdf), Bhavesh Gandhi of IIFL called Wonderla “a robust business model with inherently strong profitability at an attractive valuation”. Its valuations are also “compelling” he said. In the second report (pdf), Abhijit R. Akella emphasized that Wonderla was a unique business and that it’s IPO valuations are attractive and investors should invest in it.
Prashant Jain’s recent stock picks like AIA Engineering, Easun Royale, CESC, VST Tillers, MCX etc are all huge gainers. This clearly means we have to keep a hawk eye on him and be alert to grab the opportunities when they come our way.
Prashant Jain Bought 6% Stake of Praj Industries sold by Rakesh Jhunjhunwala. What’s cooking here?