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Friday, December 25, 2009

Best Value Buy:

Current Best Value Buy according to me is "Gujarat Ambuja Exports" (Dec 25,2009) and here are the reasons.

CMP: 23, Market Capitalization: 317.52Cr
1. Company buyback in 2008 avg price 34.5 per share buyback worth 3.31Cr.
2. As per SEBI Guidelines buyback can be done with only 10% of free reserves so GAEL had 331Cr of free reserves in 2007-2008. current market cap is 317Cr
3. Promoters have been increasing stake by buying stock from the market.
4. Promoters have bought 1,98,256 shares from Jan 2009 to June 2009. Price range is 13 to 36 for the period Jan 2009 to June 2009.
5. Current Market Capitalization (317Cr) is close to all time lows for past 4 years (2006-2009 Avg Lowest Market Cap: 270.48Cr)

I would advise strong buy with 50% growth potential (Market Cap: 475Cr) from these levels in the next 6-12 months timeframe. 1-2 year target is 100% appreciation ie. 634Cr


Ravi said...

Dear ???up,
Had picked up at 5000@25+ on ur advice and another 5000 recently to average it to 22.6.
Intend pickin' up more on further dips...yes,a gr8 story unfolding.jumped ship from karuturi then,now from sicagen.Now on sical n karu's dipppin' added onto both.
What do you think of 25000evinix4.07--1.5L krishna life1.59--6000preci cont6.17 n 29000nila infra2.53??have faith in all these in addition.
Do not want to put it on MMB,lest I get smart ass answers fm quacks out there.

Anonymous said...


Evinix: Sell : company is in apparel accessories, Market Cap: 43.87Cr company has Macrh 2009 sales: 120Cr, Operating Profit: 22.1Cr, Taxes: 4Cr Net Profit: 12.83Cr Equity: 10.7Cr. Negatives No dividents, Cash flow negative Debt: 35.95 + Market Cap: 43.87 = 79.8Cr. It has good ROCE .. I think its the best of the lot (Krishna,Precision, NILA)
But personally I would still sell as the personal lifestyle segment is very competetive and one needs to have something unique to offer.. and some moat. Hindustan lever is having problems competing
with indian consumer durable companies.. so I dont think its the right space..

If you are still looking for consumer discretionary look for companies paying dividents..

Look at Superhouse (around 45 levels) Divident paying rs1.2
Market Cap: 51.5Cr 344Cr sales.
Debt 88Cr, Cash flow positive 32Cr March 2009, Return on Capital is a poor 11.3% and it has sister concerns in the same industry.. (they can show profits in one firm or the other)
but divident paying company for the past 4 years and is well established in leather (where india has some advantage due to fact that india has the largest cattle population in the world (thanks to all the milk we drink..)

GAEL, Pitti Laminations, Jayant agro are good investment destinations with GAEL,Pitti as best bet

others also not good investment..they could move but are speculative in nature.. with high risk/reward and no dividents..

=happy investing

Ravi said...

Thank you so much,dear???up.
Will try n follow thru.Had picked up evinix on Kalidas's comment.Anyways,these stocks have been picked up with speculation in mind...do expect a decent rally in the comin' months.Intend makin' a killing then and switch over thereafter.