Ambika Cotton Mills is a micro-cap (Rs. 412 crore) stock that would have never come to our attention had it not been for the fact that ace stock pickers are buying truckloads of it.
ValueQuest India Moat Fund Ltd is a name we are familiar with. In my piece on Poddar Developers, I have explained how Prof. Sanjay Bakshi is connected with the said fund.
Yesterday, ValueQuest India Moat Fund scooped up 40000 shares of Ambika Cotton Mills at Rs. 699 each, laying out an investment of Rs. 2.79 crore.
One of Ambika Cotton’s existing investors is Kenneth Andrade’s IDFC Equity Opportunity Fund which holds 3,96,000 shares.
Interestingly, Eicher Goodearth Pvt Limited, the investment arm of Eicher Motors Ltd, also bought 45217 shares of Ambika Cotton yesterday.
There is no better way to understand Ambika Cotton’s past, present and future than to read the blog post by Vijay Malik. The post is striking for its meticulous attention to detail and clarity of expression.
After a comprehensive analysis of the financial, business, valuation and management parameters, Vijay Malik opines that Ambika Cotton provides “an opportunity of investing in a conservatively financed consistent growth story with healthy profitability margins at attractive prices”. He adds that Ambika Cotton “also offers a healthy margin of safety for its shareholders” and that it has a “competent management that believes in company’s future and cares about shareholder’s interests”.
We must compliment Vijay Malik for his brilliant analysis of Ambika Cotton. He stands to make quite a hefty gain given that heavy-duty and savvy investors are now interested in the stock.