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Friday, November 16, 2012

Jayant Agro Organics: Alarming Oct DGFT Export numbers

DGFT (Director General of Foreign Trade) apex body of Govt of India has released Oct 2012 export numbers and the numbers for Jayant are "Shocking" When we compare the Oct 2012 export numbers with Oct 2011 data in Oct 2012 Jayant has exported just 21.88% of Last year's export numbers.
Oct 2012 FOB Data: 33.21Cr
Oct 2011 FOB Data: 151.75Cr

The other observations is that last year most of the FOB data consisted of low value add castor oil which can be determined by low FOB/CIF ratio.Also low value castor oil is sold under "Vishesh Krishi Upaj Yojna"
In 2012 the majority of FOB data consist of Castor oil Derivatives which can be deterined by the high FOB/CIF ratio. High value castor oil derivatives are also sold under "Focus Product Scheme"

The question that comes to our mind is.. is there some problem with the production.. why has the export numbers fallen so dramatically?..  We still have another 2 months of data to observe before the next quarter results are out.. 

The large stake buying by promoters in Feb-March 2012 indicates things were great till March 2012.. so this drop in exports according to me is a problem that can be fixed.. Its quite possible that exports are being done through another registered company. Lets keep our fingeres crossed.

Link to Oct 2012 Data in DGFT mumbai
Link to Oct 2011 Data in DGFT mumbai

Wednesday, November 14, 2012

How are We doing Diwali 2012

Wishing all investors and readers a Healthy and Prosperous New Year!.. Let us start with the review of our performance.

First stock recommended as a buy was Venky's in May 2009. In all 28 stocks have been recommended and the average holding period of stocks is 794.71 Days (2yrs 2months and 5 days)

- On absolute basis we have earned a return on 10.78%.
- On annualized basis we have earned a return of 4.95% each year

Dividend reinvested the numbers look much better.
- On absolute basis stocks have returned 16.18% 
- On annualized basis stocks have returned 7.43% each year

Considering only recommended "Best Buy" stocks (dividend reinvested.)
- On absolute basis "Recommended Best Buy" stocks have earned 17.87%
- On annualized basis "Recommended Best Buy" stocks have earned 7.35% each year

Only dividend paying stocks the returns would have been much better (dividend reinvested)
- On absolute basis dividend paying stocks have earned:- 36.94%
- On annual basis dividend paying stocks have earned:- 16.51% each year.

A hypothetical condition.. if we had some how invested only in Profit making stocks(dividend reinvested).
- On absolute basis "Only Winners" stocks would have earned:- 63.25%
- On annualized basis "Only Winners" stocks would have earned:- 28.60% each year

A hypothetical condition ... if we had somehow invested only in "Loss Making" stocks
- On absolute basis "Only Loosers" stocks would have earned:- -ve30.90%
- On annualized basis "Only Loosers" stocks would have earned: - -ve 14.42 % each year.

Interestingly .. out of recommended 28 stocks 50% ie.14 stocks are reporting profit and 50% 14 stocks are making losses.. The Law of averages are catching up!!. but losses are -ve30.9% while profits are 63.25%.

Take Away:-  Looking at all the info..the best investment strategy is to do stock selection but invest in dividend paying stocks only.

Outlook :- I was listening to all the market pundits in TV channel..  it seems everyone is pretty positive about markets... Looking deeper it seems stock selection is the important point.. and there are bull markets and bear markets in sectors. Fundamental value investing with local consumption is the theme.

Personally I am not so optimistic.. and think this is the new "Normal" "Peak Energy" is the underlying reason.. Energy is no longer cheap which will encourage people to pick and choose what they want to do and what they dont want to do. A lot of industries will be much smaller in the future.. and hence we need to be very selective. BASEL III, ecologically responsive, Peak oil, minimalistic, Green .. all point to less consumption..

Property prices are sure to drop from these levels.. Gold is only for a complete breakdown of financial systems.. Stocks if properly selected is worth investing at these levels.. Personally I feel GAEL,Jayant NHPC and Tata Comm are all future ready stocks.

=happy investing