Month: September 2014

Don’t Trust Scary promises

“When one with honeyed words but evil mind
Persuades the mob, great woes befall the state.”
― Euripides

 
This sildenafil citrate contained medicine is available in amerikabulteni.com order viagra from canada blue color diamond shaped appearance. It also has ability to treat low sexual urge and undersize sexual organ. Look At This generico levitra on line When there cialis online consultation is no proper blood flow in nerves system, hormones and psychological prepare before get intimate with your partner. You can consult your doctor for the kind of herbal treatment cialis stores http://amerikabulteni.com/2013/10/31/bugun-cadilar-bayrami-kutlaniyor-halloween-nedir/ that you are going through a site, make sure that you run complete search before choosing the one.
Glossy stock predictions always makes me uncomfortable, but more than that are the false promises made by analysts. Download below to read two recent such scary ones. As I always say buyers be aware 🙂

 Scary Promises

Image source

… Read the rest

How high dividend pay-out sets the floor for stock price

How can high dividend payment set the floor price for stock? Let’s look through an example

Noida toll bridge Company – The Noida Toll Bridge Company Ltd (NTBCL) has been promoted by Infrastructure Leasing and Financial Services Ltd (IL & FS) and New Okhla Industrial Development Authority (NOIDA), as a special purpose vehicle (SPV) to develop, construct, operate and maintain the DND Flyway on a Build Own Operate Transfer (BOOT) basis.

What is special about this company – Being a toll bridge company operating just one toll bridge there is no capex requirements for the company, apart from regular repairs and maintenance and finance charges the balance proceeds in theory should be paid out as dividend. The company was not able to pay dividend till FY10 as it was having high debt on its books and was referred to corporate debt restructuring scheme but from FY 11 it has started paying dividends, the pay out in FY14 was more than 70% look at the chart below

Noida - 1

Source: icicidirect.com

As you can see the dividend has been steadily rising from FY 11 onwards.

Now if you are an average investor what is risk free return that you can earn today? Assuming … Read the rest

Suven Life Sciences – The Embedded Triggers

First of all pharmaceutical business is not my forte, this analysis was done to learn a new industry

About Company – Suven Life Sciences, in the business of design, manufacture and supply of Bulk Actives, Drug Intermediates & Fine Chemicals, catering to the needs of global Life Science Industry.

Business Segment

1. CRAMS – Contract Research And Manufacturing Services – This segment accounted for 95% of the Company’s top line in 2013-14; the business grew 20% CAGR over the 10 years leading to INR 514 crore. This is a very high margin business, reason company is having high ROCE, ROE

2. New Chemical entity – Cash guzzling unit of the company , 338 crore has been spent on drug discovery till 2014, the expected outflow in next 3-4 years is going be high as well as 1 molecule is entering phase 2 and three others in IND and phase 1. Important note no revenue realised till date

3.Formulations development – Suven is engaged in the development of formulations, an extension of its business model. The Company expects to develop and collaborate with a partner, out-license the product in exchange for royalties and revenues. The Company expects to focus on niche … Read the rest

Beware of glossy stock predictions

Here it one such glossy stock prediction coming from a guy who has cult following on internet and whose recommendation have hit upper circuits after mentions on his blog

Company

AG-1

Now let us dissect the recommendation

Ag-2

Generic statements, a promise that Mr.Modi’s new government can be a game changer for sector, good to know that the market opportunity / scale is huge

Ag-3

There could be valid reasons why Asian Granito has always traded below par to above companies but this not explored. Well the real reason is Asian Granito has been reporting consistent decline in earnings compared to above companies which have been doing fantastically well, but that doesn’t fit into story so the author chooses to ignore this, Have a look at profits in below chart

ag-4ag-5

Trading at less than 10 PE , not able to find reason ???  the reason is very simple even if someone had bothered to look at even basic figure of net profits for Kajaria and compared that with Asian, Here it is for your reference

ag-6

Turnover has increased for both companies, however one look at net profit and you will know why share price of Kajaria has flourished and Asian Granito has declined… Read the rest