On 29th August 2012, Punjab National Bank (PNB) hit its 52 week low of Rs. 665. Nobody was willing to touch the stock with a barge pole.
But S. P. Tulsian, the master stock picker, knew that the best time to buy stocks is when they are down and out. And everybody knows that PNB is a stock with excellent fundamentals and management. Yet nobody was willing to stick his neck out.
S. P. Tulsian’s confidence came from the fact that though PNB had fared badly in that Quarter owing to the steep rise in NPAs, it has the highest net interest margin (NIM) for the June quarter amongst all the public sector banks (3.6%). Also, PNB is the second largest public sector bank, after State Bank of India, with 5,700 branches.
S. P. Tulsian’s analysis and calculation was also excellent. He pointed out that PNB’s book value then was Rs 815 and an EPS of Rs 110 EPS was expected in remaining three quarters. If one reduced the expected dividend payout of Rs 25, the book value would be Rs 900 as on March 31, 2013 as compared to the then book value of Rs 815.
The result: The PNB stock was then quoting at a mouth-watering price to book of 0.75. “We have not seen this kind of price to book for the larger PSU banks” S. P. Tulsian exclaimed. Other Banks like Bank of Baroda (BoB) and Canara Bank were quoting at a much higher PBV he said.
So, S. P. Tulsian sent out a strong Buy call and promised investors that they would see a price of Rs. 800 in four to five months.
Well, this is the kind of foresight and masterly analysis that makes fortunes. At today’s CMP of Rs. 912 (after the 10% spurt) investors who heeded S. P. Tulsian’s recommendation are looking at a gorgeous 37% return in just 5 months which means an annualized return of 89%.
And the good times may just be starting for PNB and the other PSU Banks. So, if you still haven’t invested in them, it’s time to wake up from your slumber and take a long and hard look.
yes “he”( name no stated ) has some gud calls. but i had subscribed to his service…………….
among tv stars ( i never follow those who come in tv , they go from one channel to channel and get payment having never invested in stocks majority of them. professing from roof top)
pn vijy is gud according to me and i used to read his column in economic times even while he was in citi bank in early 80s and see his body language and profile . fir is the best impression
what about future of king fisher? please advise
Grauer and Weil may test 3 digit mark, says SP Tulsian, sptulsian.com.
Tulsian told CNBC-TV18, “Grauer and Weil is providing metal finishing and surface treatment as also the industrial paint. This company has five plants one at Chembur, Vapi, Dadra, Himachal Pradesh and Jammu & Kashmir have been recently started. If you see its core business, they have a topline of close to about Rs 300 crore with EPS of about Rs 6-6.5 and cash EPS of Rs 10.�
He further added, �The company has maybe in last couple of years has monetized or rather developed their land at Kandivali and made it a lifestyle entertainment and multiplex shopping complex on the lines of Phoenix Mills infact it is called as a Phoenix Mill of Suburban. That is called Growell 101 and it is a 7.5 lakh sq ft; 3 lakh sq ft area has been added recently. So the rental income of that also will flow in maybe in FY12 or maybe in FY13 onwards. If you see the company had acquired in last year, the Bombay Paints which is located at Chembur and that company got merged into this company due to which equity increased by about 50% from 14-14.5 crore to 22.5 crore and I won�t be surprised to see again getting that Chembur property developed and maybe called Growell 771.�