Fundamental Stock picks
- Thread starter hopkins
- Start date
Regarding Kale consultants, the company deals is softwares pertaining to Airline industry. Of late the company's performance is quite good as there is steady rise in topline as well as bottomline. My estimates for the current year's eps is around 5-7. A midcap or small cap IT company may get maximum P/E of around 15, barring exceptional companies like Geodesic and Financial Technology. So the price may range between 75-105. The current market price is already ruling at higher band of the limit. Thus I see very little upside on this stock from this level. However, u cannot predict market exactly at any given point of time. So if nothing extraordinary happens, my view is that the stock is fairly prices.
The second stock was Royal orchid hotels which unfortunately I do not track at all. However, hotel business is booming and is highly dependent on economic activities.
The third stock Torrent Power SEC is a real gem as I see a lot of value to be unlocked on this couter over the next few years. The torrent group want to bring all its power companies under one umbrella and is planning to further increase its capacities. Torrent Power SEC at Rs.600 is relatively undervalued but we cannot see this stock on standalone basis as it is going to be merged with other torrent group companies and the new company will undergo a complete image makeover both financially and operationally. Thus it is better to wait and watch for some time and see the real strenght of the new company thus formed. My gut feeling is that Torrent power will certainly be a very investment bet over a long period of time.
Since I invest only for a period ranging 3-6 months, none of the stock discussed come under my investment radar.
The second stock was Royal orchid hotels which unfortunately I do not track at all. However, hotel business is booming and is highly dependent on economic activities.
The third stock Torrent Power SEC is a real gem as I see a lot of value to be unlocked on this couter over the next few years. The torrent group want to bring all its power companies under one umbrella and is planning to further increase its capacities. Torrent Power SEC at Rs.600 is relatively undervalued but we cannot see this stock on standalone basis as it is going to be merged with other torrent group companies and the new company will undergo a complete image makeover both financially and operationally. Thus it is better to wait and watch for some time and see the real strenght of the new company thus formed. My gut feeling is that Torrent power will certainly be a very investment bet over a long period of time.
Since I invest only for a period ranging 3-6 months, none of the stock discussed come under my investment radar.
Zee tele in now under momentum. Most of the brokers are quite bullish on this counter. After restructuring Zee is expected to perform well. Though it is quite difficult to put any target on this kind of stock, I feel your purchase price is not bad. However, the near term and long term targets cannot be quantified at this stage due to unacertainability of the financial benefits Zee would derive after restructuring and after hiking the price of some of its services.
On financial side the stock looks a little bit stretched at 240 levels. If you are a conservative investor who do not want much risk and too much appreciation then my advice to u would be to switch ur investment from zee to something like sterlite opticals which is also under tremendous momentum but much much reasonably priced at Rs.160. My view is that sterlite opticals will benefit very much from the internet boom and in particular will drive immence benefits from exports from countries like china. On an equity base of Rs.28 crore, sterlite opticals will end up something like 25-40 crore profits this year, which gives it an eps of Rs.9.50 to 14 on annual basis. Thus at Rs.160 level it is quite reasonably price with scope of further appreciation. For next year we can expect an eps of around Rs.20 which could take the stock to Rs.300 something.
Further, one very bullish signal about this stock is that the promotors are making preferential allotment to themselves, which no promotors would do if he does not see any benefit in the near or long future. In fact the track records of the promoters is not very good as far as corporate government is concerned. So my feeling is that they are going to jack up the prices to their advantage. Anybody ready to take risk can use this opportunity to sail alongside the promoters and reap the benefits.
My disclosure about this stock: I have 100 share at Rs.165.
Please feel free to put in any criticism about my view if u do not agree with me. My only request is that u should also be as generous in explaining ur point of view as I am.
On financial side the stock looks a little bit stretched at 240 levels. If you are a conservative investor who do not want much risk and too much appreciation then my advice to u would be to switch ur investment from zee to something like sterlite opticals which is also under tremendous momentum but much much reasonably priced at Rs.160. My view is that sterlite opticals will benefit very much from the internet boom and in particular will drive immence benefits from exports from countries like china. On an equity base of Rs.28 crore, sterlite opticals will end up something like 25-40 crore profits this year, which gives it an eps of Rs.9.50 to 14 on annual basis. Thus at Rs.160 level it is quite reasonably price with scope of further appreciation. For next year we can expect an eps of around Rs.20 which could take the stock to Rs.300 something.
Further, one very bullish signal about this stock is that the promotors are making preferential allotment to themselves, which no promotors would do if he does not see any benefit in the near or long future. In fact the track records of the promoters is not very good as far as corporate government is concerned. So my feeling is that they are going to jack up the prices to their advantage. Anybody ready to take risk can use this opportunity to sail alongside the promoters and reap the benefits.
My disclosure about this stock: I have 100 share at Rs.165.
Please feel free to put in any criticism about my view if u do not agree with me. My only request is that u should also be as generous in explaining ur point of view as I am.
Zen Technology
Anybody who missed my call on UB engineering and Alps Industries can buy zen technology below 170 for more than 50 per cent returns. I am going out of station for some time now so I cannot post alll the details now but I will give all the fundamental reasons for buying this stock like I did in my previous calls once I come back.
Anybody who missed my call on UB engineering and Alps Industries can buy zen technology below 170 for more than 50 per cent returns. I am going out of station for some time now so I cannot post alll the details now but I will give all the fundamental reasons for buying this stock like I did in my previous calls once I come back.
Some days back I have given a buy call on Zen technologies below Rs.170. Now the stock has fallen to Rs.147 in this crazy market. But friends dont panic. Here are the reasons why I recommended zen and why it should not be sold even in this market.
1. Zen is not like other small software shares which do small work given by big players, rather its a very innovative company operating in the software development in defence sector. As everybody knows defence sector is one of the most quality conscious sector in the country or for that matter in the whole world. There cannot be any compromise on the product and services required by the armed forces. It requries a lot of approvals and skills to be a qualified defence sector supplier. Thus there cannot be any doubt over the capability of the company.
2. The company has shown very good quarterly results this quarter giving an EPS of almost 10.
3. The Prime minister has recently indicated that the forces will move towards latest high tech weapons and systems for greater reliability. The defence budget is bound to increase every year irrespective of the state of markets and the weapons, systems and technologies adopted by the forces will always see replacement of the older technology by the newer one. Zen operates in this very sector.
4. The entire market fall was induces by " Metal meltdown at LME" Just think what this company has to do with those metals and metal prices. Actually software stocks are a safe bet in this market.
5. Karvy has placed a price target of Rs.419 on this counter. This company has almost 18 percent FII holding. There must have been some logic in the recommendation of karvy and presence of FII in such a small company.
So my advice is that dont sell just for selling. Keep this script, its certainly a good bet.
1. Zen is not like other small software shares which do small work given by big players, rather its a very innovative company operating in the software development in defence sector. As everybody knows defence sector is one of the most quality conscious sector in the country or for that matter in the whole world. There cannot be any compromise on the product and services required by the armed forces. It requries a lot of approvals and skills to be a qualified defence sector supplier. Thus there cannot be any doubt over the capability of the company.
2. The company has shown very good quarterly results this quarter giving an EPS of almost 10.
3. The Prime minister has recently indicated that the forces will move towards latest high tech weapons and systems for greater reliability. The defence budget is bound to increase every year irrespective of the state of markets and the weapons, systems and technologies adopted by the forces will always see replacement of the older technology by the newer one. Zen operates in this very sector.
4. The entire market fall was induces by " Metal meltdown at LME" Just think what this company has to do with those metals and metal prices. Actually software stocks are a safe bet in this market.
5. Karvy has placed a price target of Rs.419 on this counter. This company has almost 18 percent FII holding. There must have been some logic in the recommendation of karvy and presence of FII in such a small company.
So my advice is that dont sell just for selling. Keep this script, its certainly a good bet.
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