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Monday, August 25, 2014

Jayant Agro:Chart Reading: Predicting the future

As the markets are rising there are a number of requests for price targets.. which got me looking at the charts for Jayant Agro.. 

PN: Charts are predicting the future based on past history of stock price movement.. These predictions will only stand true if it follows historical price movement..

Personally I feel this is a breakout year for Jayant and we could see the stock become a multibagger..
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I have taken the maximum possible range for my Exponential Moving Average i.e. 999
Since 200Day EMA is considered as 1 year.. (There are 52 weeks in a year,  considering only Monday-Friday= 260days ) minus the Holidays 60 days we get 200 Day EMA = 1 year..

So 999 Day is like 5 yrs (200 x 5 = 1000) 

So long term trend is 5 yrs and then I have taken the 200 day EMA for signalling...

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3 year term: If you see the chart the peaks and troughs considered are:
2005 low: 34.04 .. 2008 High 122.75 (360.60% increase in 3yr period)

2010 low: 62.29 .. 2012 High: 152.50 (244.82% increase in 3yr period)

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So the bull cycle starts when 200Day EMA crosses 999Day EMA from the bottom and lasts 3 yrs and we have 2 confirmed cycle in past 9 yrs..

Bear cycle starts when stock price falls below the 200Day EMA
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FALSE START: If you see there is a False start in the middle 2007.. where the stock price did not go below the 999Day EMA and resumed its journey back up again.. to a new 52 week high..

Similar "False Start" in 2011-12 period giving traders a chance to dip in twice!! in the 3 yrs period doubling your returns!!
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Conclusion: So the time period is 3 yrs.. Trigger is after the 200Day EMA crosses 999Day EMA .. till stock hits a new 52 week high (250-350% from base) and signals a sell when the 200Day EMA is broken.. 

Next cycle starts after the 200Day EMA falls below 999Day EMA and again  200Day EMA rises above  999 Day EMA. Next bull cycle start

Latest bull cycle started at 95.4 
Current Market Price:109.70
Current 200Day EMA: 102.65
Current 999Day EMA: 103.29
Target Price 250-360% from base of 95.40 = 238.40- 343.40
Time Period: 3 yrs starting June 2014 - till June 2017 

If you see the 999Day EMA(Green line)  its been continiously rising so even if on the outside the stock seems to be underperforming but the base 999Day EMA in past 10 yrs has increased from 34.04 to 95.04 which is extremely bullish for investors in Jayant Agro organics..

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PN: As soon as the trend is known to the general public ..the rules of the game are changed.. so its quite possible that the trend no longer stands the test of time.. Please do your own deep dive before investing.



21 comments:

Rajesh Narang said...

hi good analysis. Will buy . Am on MMB board as ARISE.

What'sUp Prahalad said...

Rajesh Narang ji:

could not locate ARISE in MMB.. but you do seem to be interested in Biotech..

have you looked at Advanced Cell Technology
http://www.advancedcell.com/

and Biotime
http://www.biotimeinc.com/

I think I might still have some ACTC stock.. in my junk box..
------------
Jayant is an exceptional stock.. and then we have this REACH Deadline of Feb 15,2015 which will increased demand for high molecular weight phthalates..(which are derived from castor oil..)

http://www.plasticisers.org/media/74/58/European-plasticisers-market-continues-major-shift-towards-high-phthalates

already there are quite a few players like nike, ford, toyota out there using phthalates..
http://www.sofila.eu/wp-content/uploads/2012/09/WSA-may-june-2012.pdf

=happy investing
whatsup-indianstockideas

Anonymous said...

Hi Whatsup ji

I am patiently waiting with my Jayant agro stock . I have 9000 at present.

thanks
Venkatesh

What'sUp Prahalad said...

venkatesh ji:

add another 1001 and enter the elite group of top 105 investors in Jayant Agro..

Jayant Agro deals in castor oil & its derivatives.. produces the largest range of castor oil derivatives..

Promoters also hold significant stake.. we are all invested in a great stock which is destined to be a 10bagger..
--------------
so buy another 1001 shares and become part of 105 investors who hold 82.43% of shares in Jayant Agro....

http://whatsup-indianstockideas.blogspot.in/2014/07/jayant-agro-organics-676-shareholders.html

Congrats and keep the faith!!

Anonymous said...

Sure . Just added my first quota of 5000 shares of nhpc. So need to wait for some funds to add jayant now. Thanks. Venkatesh

hhh said...

Hello Whats UP,

I m new to ur blog. I m a long term player and JAOL is interesting. I just saw that its turnover last fiscal halved to rs 600 crore from 1200 crore. How is that so ?

Regards

HK

What'sUp Prahalad said...

HK ji:

Jayant had a 100% subsidiary Ihsedu Agrochem.. Ihsedu Agro chem castor seed crushing facility is one of the largest in India. Located in Banaskantha district.
Banaskantha district is the largest castor growing district in Gujarat..
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till last year it was a 100% subsidiary but in Oct 2013 24.9% stake was sold to Arkema.. for 30cr
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My take is that before the stake sale exports were done through Ihsedu Agro chem or Jayant Agro..

but now all castor derivatives business is with Jayant Agro ...while low value add castor oil business is Ihsedu Agrochem..
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due to this categorization of business between Jayant and Ihsedu agrochem.. Volume (topline) has moved into Ihsedu agrochem.. while bottomline is with Jayant Agro (as derivatives has a higher value add.. higher margins)
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as you can see Jayant stand alone sales 2014: 656cr NP:37.31cr
Jayant consolidated..
Sales 2014: 1,550cr NP: 40.58cr
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So consolidated level there is no sharp drop in sales .. which indicates topline number just moved to their respective areas..
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so ihsedu agrochem has contributed 894cr to topline and 3.27cr to the bottomline..
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I feel till they could the promoters have portrayed jayant agro as low margin business by including sales of its 100% subsidiary .. but now with separate management structure they have to show the sales and profits to their respective businesses..

and Jayant turns out to be a higher margin business..
--------------------

that's my understanding of the sharp drop in sales.. which is not so sharp drop at consolidated levels..

hope that helps..

=happy investing
whatsup-indianstockideas

sudhir samdani said...

Congrats whatsappji,
Good analysis. I have also completed my quota of 10000 around one week before only seeing yours writeups at MMB.I am with the name of Shubham 1206 at MMB.

C.A.Sudhir Samdani

What'sUp Prahalad said...

Sudhir Samdani ji:

congratulations on your picking up 10k before the stock moved up..

You are yourself a CA so what advice can I give.. I think we all are blessed to have found Jayant agro and had the opportunity to invest in it..

=happy investing
whatsup-indianstockideas

Kalpesh said...

Sir amazing analysis....i am alwys amaze the amount of analysis and time you put into..is really appreciated..I have been watching you blog for abt 3 yr...n Jayant is one stock i have an eye...Thanks a lot...

Sir also wanted to know are you on anyother social platform like FB or twitter.

Also do you watch or read any other personals blogs which you could recommend.
Thank again

Kalpesh said...
This comment has been removed by the author.
Kalpesh said...
This comment has been removed by the author.
What'sUp Prahalad said...

Kalpesh ji:

I tried Valuepickr and equity desk both blocked my publishing rights.. saying I was trying to market Jayant agro (spamming - valuepickr) or my blog (due to the links to the articles already written - equity desk)

Safal niveshak never posted my queries about Jayant agro ..

The more I see it.. its all about control.. not even money or wealth.

anyway... where to get research reports for free.. is something I had written about some time back and has updated links

I like the screener and quants partner links..

http://whatsup-indianstockideas.blogspot.in/2011/10/where-to-get-research-info-for-free.html
---------------
right now I'm trying to look for "fuel cell" related investments in India.. if you find something please do let me know..


hope that helps..

=happy investing
whatsup-indianstockideas

Anonymous said...

Whatsup ji,

Wishing u and ur family a happy and prosperous Diwali.

Did u see value pick blog??He has recommended SKM egg products..

Regards

Venkatesh.

Anonymous said...

hello whatsupji
what is ur view on ifb agro september quarter result

What'sUp Prahalad said...

Venkatesh ji:

A Very happy seasons greeting to you and a happy new year!! I am sorry for the delay in replying back..

Yes SKM is doing well .. and looks like its got some steam left.. but I would not advise buying more.. its a hold or sell..

best is look at your comfort level where you would like to exit the stocks..
------------
stocks always go to extremes so there is every possibility that skm will continue its journey forward.. so find you own level where you are comfortable booking profits..

=happy investing
whatsup-indianstockideas

What'sUp Prahalad said...

Anonymous ji:

IFB Agro problem is: no dividend payout..
(that is a problem with the whole group)

2. IFB AGRO has sold their IMFL (Indian Made Foreign Liquor) business to tilaknagar industries..

they have converted their plant to indian country liquor plant..

underperformance will continue.. and company has mentioned in annual report March 2014 as country liquor market is very competetive and they have not yet come to use their full capacity..

I would say IFB Agro is a sell..
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company profits will be lower going forward.. and I would advise a switch to tilaknagar (which is available at 52 week low..34-35) and is fairly priced..

=happy investing
whatsup-indianstockideas

Anonymous said...

Tilaknagar industries is falling everyday....they have some litigation with their brandy.
I entered at 55.is it a good time to average ???
Also , is jayant agro still a good buy at 136 bucks ??

What'sUp Prahalad said...

Anonymous ji:

I would recommending buying tilaknagar in small lots say 5000/= bucks every 15 /30 days..

the brand court judgement is most likely going to go in their favour as they have already won 2 court cases with regards to the brand .. 1 in rotterdam and 2nd one in mumbai highcourt..
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from what info I could gather the supreme court is waiting for the documents of the Rotterdam District Court order..
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"Mansion house" brand was used to produce "scotch whisky".. then Tilaknagar bought rights to the brand/sell for all products other than "scotch"

and Tilaknagar registered mansionhouse brand in India for Brandy..

When the erstwhile owners of the brand tried to sell "Mansion House Whisky" "Scotch Whisky Association" Took Erstwhile owners of "Mansion house Brand" i.e. UTO Nederland B.V. to court..

There Roterdam district court passed a judgement that UTO is not allowed to use "Mansion house" brand for Whisky ...
Over the years globally the "Mansion House" "Scotch Whisky" is nolonger popular and the brand is in decline..
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meanwhile in India the "Mansion House" Brandy has grown from strength to strength and now is a premium brand of "BRANDY" and one of the top selling brandy's in the world..

Suddenly the erstwhile owners of "mansion house" label are claiming that "Mansion house Brandy" is their label
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1. UTO Netherland B.V has never manufactured or sold "Mansion House Brandy" .. "Mansion House Brandy" was always manufactured by tilaknagar..
"Mansion House Scotch Whisky" was what UTO was initially interested and is nolonger a major brand worth anything..

2. In India "Mansion House Brandy" has been a trademark of "Tilaknagar Industries" since the begining..
http://www.tilind.com/PressReleases/TI_to_promote_Mansion_House_and_Savoy_Club.pdf
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The real problem is ABD (allied Blenders & Distillers) are inetersted in buying out "Tilaknagar Industries"

Tilaknagar Promoters is 2nd generation of promoter family and maybe "ABD" thinks they can get it cheap.. by raking up the brand ownership issue..

99% the ruling should be in favour of "Tilaknagar Industries" after all tilaknagar is the initial registered owner of the brand in India since 1983..


http://www.livemint.com/Companies/5X4PqczmykQTSoAh5x7J1I/Tilaknagar-Industries-to-inspect-ABDs-documents-on-Mansion.html
==============
You can buy Tilaknagar as its real worth is much higher than its current market cap..
---------------
Withy regards to jayant agro.. I see it as secular growth story and in March 2014 annual report the management seems to be stating that Jayant agro is transitioning from "Small cap" to "Mid Cap" .. Right now Jayant Agro MCap is 200Cr

================
According t NSE: average free float market capitalization ranging from 1000 Crore to 5000 Crore at the time of selection. is MID-CAP..

Current Jayant Agro Free Float MCap: 70Cr so for Jayant to enter Mid Cap range it needs Free Float MCap to be: 14 times it's current Market Cap..

Even from a PE prespective company profits have grown over 7 times.. and still market cap is the same.. so atleast 7 times growth would be a fair valuation of Jayant Agro..

that's around 950/= PE would be 35..

and SPeciality chemicals Industry PE is 30-35 range.. so I think fair value of Jayant agro is close to 950/=
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Jayant Agro stock needs to cross the 150 level decisively .. and if it crosses 160 level.. then there is no resistance at all..

Long term investment can be considered..

=happy investing
whatsup-indianstockideas

ttthakur said...

Prahladji , Namaskar.

I came across this article of Nouriel Roubini:http://www.roubinisedge.com/nouriel-unplugged/rise-of-the-machines-downfall-of-the-economy.
Thought of sharing with you, to get your esteem comments.
Thanks and Regards,
ttthakur

What'sUp Prahalad said...

ttthakur ji:

the future of "Job" is on decline..
Mechanization has taken over every aspect of industry or business.. and with software and computers.. majority of jobs are going to be of low quality..

Its very important to have a secure place with farmland for a family to secure their future..
-------------------
with loss of a steady job there is every possibility of breakdown in the fabric of the society..
and most govt (US in perticular) is planning for such a dooms day scenario..
-------------------
with the fact that energy is no longer available in plenty.. the idea to encourage "consumption" is no longer considered correct.... its all about conservation of energy.. maybe even population control..
-------------------
this change in govt stance from "encouraging consumption" to "encouraging conservation of energy" is going to catch a number of industries on the wrong side of the equation..
-------------------
I think for the kids its best to go into field of art .. ie sports/cinematographer/painting/music .. Another area of growth is speculation (investing/stocks) etc..

PN: these are my personal views.. based on my understanding of current situation..

=happy investing
whatsup-indianstockideas