Pressman Advertising is a multibagger gem: Aceinvestortrader
Pressman Advertising Ltd, an unknown micro-cap with a market capitalisation of only Rs. 77 crore, shot into the limelight when aceinvestortrader, the famous anonymous blogger, recommended a buy.
The logic was quite convincing:
“Whereas unique and peerless businesses normally trade at astronomical high double digits or even triple digit valuations, we have this wonderful high dividend paying cash cow small cap available at extremely cheap valuations of around less than 13 PE,” aceinvestortrader said.
“The stock is rock solid in adverse conditions primarily because of its debt-free status and high dividend yield. Furthermore, the stock is held on to the lower levels of breakout and once it crosses 33 with good volumes, it will mark another strong breakout,” the anonymous blogger said.
Naturally, novices rushed to grab the stock.
“Dear Aceji, Thanks a lot. Bought @ 36,” a reader said.
The stock surged like a rocket to the ATH of Rs. 82, fulfilling aceinvestortrader’s prophecy that the stock will be a multibagger.
SEBI’s investigation unravels circular trading scam
Usually, micro-cap stocks are subject to manipulation by unscrupulous operators.
Pressman Advertising is no exception to the rule.
SEBI’s sleuths, who maintain 24×7 vigilance on Dalal Street, noted that there was unnatural volume in the stock.
In a flash, they confronted Praveen Kumar Agarwal HUF, an alleged operator, and claimed that he, with a group of 28 other entities, had entered into reversal of trades i.e. shares purchased/ sold on market were transferred back through off market within next 2 working days (i.e. T+2 days).
Praveen Kumar Agarwal HUF did not take kindly to the intrusion by SEBI into his game plan.
“The allegation in SCN that our dealing in scrip of PAL is fraudulent in nature and we are alleged to be in violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 is incongruous and unsustainable. Therefore, we vehemently deny the alleged violation / contravention of the provisions,” he argued in a somewhat belligerent tone.
Hon’ble Satya Ranjan Prasad, the Adjudicating Officer at SEBI is quite seasoned and well versed with the modus operandi of the operators.
He pored into the trade log in NSE and off-market transfer data and meticulously built a fool-proof case against the alleged operators.
“No genuine investor will carry out such trades as it will only create a false and misleading appearance of trading in terms of artificial volumes in the scrip which is prohibited under the provisions of PFUTP Regulations. I further note that such reversal of trades is not an isolated occurrence in the present matter, but the same has been carried out altogether by the Group Entities repeatedly,” Hon’ble Prasad held.
“Vide the aforesaid modus operandi i.e. combination of on-market and off-market transactions within 2-working days, the Noticee alongwith the other Group Entities effectively reversed trades cumulating to 33,45,795 shares which is 70.96% of the total market volume in PAL scrip in NSE,” he added.
At the end, Praveen Kumar Agarwal HUF was levied a penalty of Rs. 6 lakh for indulging in the aforesaid nefarious activity of circular trading.
Vijay Kedia & Basant Maheshwari have warned of risks of “Bhangaar”/ “Chakri” stocks
Vijay Kedia & Basant Maheshwari have been running a crusade to warn novices of the perils of investing in alleged “Bhangaar” and “Chakri” stocks.
“There are largecap, Midcap, smallcap. There is also a "BHANGAAR CAP". 5000+ out of 6000 fit in that. They show up only in good times. Be careful,” Vijay Kedia warned.
“Stay away from such Bhangaar caps. Else you will regret soon,” he added in a stern tone.
There r largecap,Midcap,smallcap.There is also a "BHANGAAR CAP". 5000+ out of 6000 fit in that.They show up only in good times. Be careful.
— Vijay Kedia (@VijayKedia1) December 9, 2015
Stay away from such Bhangaar caps. Else you will regret soon. https://t.co/hffAEmjRcs
— Vijay Kedia (@VijayKedia1) September 8, 2016
His advice was welcomed by many of his followers.
@VijayKedia1 looks like you rang alarm at very right time. Hopefully many will be benefited by this. Vijayji thanks for this (Y)
— Vivek Kochar (@vivekochar) December 9, 2015
The first responsibility of a wonderful person like you ,is to define reality (About BHANGAAR CAP) !! Thank you sir ?
— Ajay Baxi (@ajay_baxi) August 9, 2017
Sir, Another BHANGAARCAP, really investors struggled come out from the stock.
50 to 2.29 (-95%). Thanks for your suggestions pic.twitter.com/AAp1IpT2fD
— Anil Sura (@anilsura9) October 25, 2017
However, some were defiant.
@VijayKedia1 You are sounding too negative these days. My bhangaar cap has gained 100% in few days. Trilogic digital.
— सत्य (@satya61229) December 9, 2015
Basant Maheshwari has also been aggressively attacking alleged “Kachra, crap and chakri” stocks and warning investors not to touch such stocks even with a barge pole.
Kachra, crap and chakri stocks are are like terminally ill cancer patients having multiple organ failure. Just because you are emotionally connected to your purchase price does not mean that you will get it back. And stocks are NOT family members. Yaha dawa kaam ayegi na Dua !
— Basant Maheshwari (@BMTheEquityDesk) March 6, 2018
Someone throws a name; the stock starts to dance; the public joins the party; once everyone’s bought, the music stops; there are no new buyers; the stock, devoid of fundamentals starts to fall; the protagonist disappears temporarily – then appears to throw another Chakri. REPEAT https://t.co/09l07iQfxE
— Basant Maheshwari (@BMTheEquityDesk) March 11, 2018
Even Porinju Veliyath conceded defeat against shenanigans of chor promoters
Porinju Veliyath is famed for his razor-sharp mind.
He has so far thrived on ‘chor’ stocks and made a fortune by outwitting ‘chor’ promoters.
However, recently, the chor promoters got the better of him and he had to concede defeat.
“My Strategy Of Betting Big On Chor Companies Has Backfired,” Porinju admitted in a somewhat mournful tone.
I have bet big on improving corporate governance in a structurally changing Indian economy; the strategy looks backfired as of now. Too early to write off India; I am still optimistic on #ChangingIndia
— Porinju Veliyath (@porinju) June 28, 2018
“Many chor promoters still find loopholes,” he conceded.
A Rule-Based Economy cannot be built overnight! Change is a painful and time-consuming process. It is true that many chor promoters still find loopholes during the transition period.
— Porinju Veliyath (@porinju) June 28, 2018
So far, in our obsession for multibagger gains, we have ignored the wise counsel of Vijay Kedia, Basant Maheshwari and Porinju Veliyath and loaded our portfolios will all sorts of dubious stocks. This has led us to suffer incalculable losses. It is high time we reform our ways and come clean and walk the straight and narrow path of investing only in high-quality stocks!