Sold TECHM @ 747 today....I think its consolidation time for TECHM...
Reaped good profit though..had bought 200 shares day before yesterday @660 ..spread of almost 90rs./share...
this was the first time ever i bought in INDIAN equity market....lagta hai bhagwaan mere saath hai... 
Ab doosre shikaar ki taalash me hun....
P.S FRM Part 2 ki fees ka jugaad to ho gya....My best wishes are with TECHM for their future stints. 
Congos buddy !!..and all the very best for FRM 2..!...:)
butterflyeffec SaysCongos buddy !!..and all the very best for FRM 2..!...:)
Thanks!! bro :)
Was just going through some of the major successful indian investors methodology of Picking stocks and was trying to read their mind.....Got some useful points....mentioning it here.....This is how MR. BASANT MAHESHWARI analyse a specific company and sector (Top's down approach basically)...Found some points really relevant but i dont agree with some of his approaches.Mentioning them here would not serve the purpose...maybe @some later date......here is MR. Maheshwari's approach in his own words......ENJOY
A) I never hold any large caps. In fact I sold out Bharti once it hit Rs 120 (Market cap Rs 20,000 crores) after getting in at Rs 25 (Market cap Rs 4000 crores) because it was approaching a market cap I was not comfortable with. That eliminates all the established blue chip from my portfolio. I am constantly in search for emerging blue chips and not the established ones. That is why I invest in small/midcap companies. I believe that you can get the next Infosys in a small cap only.
B) I hold at most between 3 and 5 companies in my portfolio. Yes only 3 to 5. Once I finish analyzing a company I ask myself one question Is the company good enough to take 20% of my portfolio. When ever I get an answer as yes the next question is OK what can I replace it with. If I get another yes I would buy that stock. I prefer putting all my money into one company but just for the event risk I have divided it into 3 to 5.
Since I hold concentrated portfolios 3 to 5 companies I forecast a best case scenario with only the target price of 2 to 4 companies assuming that one will go bust and get me a zero value in the defined time span. If still the overall result looks exciting I would invest taking the mathematical premise that errors will cancel out each other (I do not know which one will under deliver and by how much).Robert Hagstorm the author of a book on Warren Buffet did a study where he found that concentarted portfolios give out better returns
I have lost many 30% to 100% returns by missing on opportunities because those companies did not fit my style of investing. But I have no regret because the ones I hold have more or less made up for that.
It takes me hardly one hour to analyze a company but making up my mind (the second part of B above) takes a few days or a even a few weeks at times. This is so because I believe in concentration.
C) This is how I like to zero down on a company.
1) I look at the management first. The management is the most important and lest talked about aspect of a company.
2) I like to know what business the company is into and then look at whether it is scalable. I prefer new sectors since the growth is highest there. I avoid cyclical because I cannot predict the peaks and troughs.
3) I then look at the market cap. If it is below Rs 1000 crores I think we could pay a higher PE to that company
4) I would then look at the RoE to see if the company is using its capital efficiently. RoCE is a better concept though because you could hike the RoE by using debt but not the RoCE
5) I would then compare the PE with the growth and the RoE. If there is a big difference between RoE and growth then the company does not merit investments. This is so because for a company to grow at higher rates of growth compared to its RoE it would have to dilute capital. That hurts
6) Dividend, book value is something that I look but do not base any of my decisions upon. I think that they tell you what the company has done and not what it will do.
D) Once a stock is bought and the price falls without any change in fundamentals and if I have the required cash I will buy at each fall.
Now I do not stop at step 1 of phase C above. I do look at steps 2,3,4 and 5 of phase C above but there is a difference in priority. That is all. For instance I like Financial technology. MCX could be HUGE but I am worried by valuations so each time I want to buy the stock I think in terms of phase B above and give it a pass.
So it is just a matter of prioritizing the tools of analysis. No analysis is complete without putting all tools at work. In none of my reports will you find the valuation parameter missing because irrespective of the strategy you use the final objective is to make the stock price a slave of its earning. The question is which one are you more comfortable using when compared to the others i.e. prioritizing the tools.
And finally, I have made my 30 baggers this way so I have become used to investing in this fashion.
@aprofessor--- Sir,nhi bnauga to kharcha paani + padai ruk jaegi..majboori ka naam Mahatma Gandhi :)
P.S TECHM trading @720 ..so selling it at 747 was a wise decision on my behalf i guess :)
@butterflyeffec -- bhai,AVTNPL is not gonna make it to 725 resistance...if u have thought of investing in it..now is a good time to rethink ur decision....As always,its my take.... 😃
@aprofessor--- Sir,nhi bnauga to kharcha paani + padai ruk jaegi..majboori ka naam Mahatma Gandhi :)
P.S TECHM trading @720 ..so selling it at 747 was a wise decision on my behalf i guess :)
@butterflyeffec -- bhai,AVTNPL is not gonna make it to 725 resistance...if u have thought of investing in it..now is a good time to rethink ur decision....As always,its my take.... :)
hmm..bhai..it really looks uncertain for 500!...but am waiting for some time...for a month or so...usually AVT gives good march result!...lets see...whats your take on IFB agro and a share like inventure..:P??..the first one is fundamentally very strong and undervalued too ,but the managemnt is too conservative ..havnt given any dividend till now!...the second one has got not much fundamentals i feel..puerly prmoter driven....but doing good...i have 100 shares of ifb at 140 odd level...and 100 for inventure at 162 odd levels...tell me when shud i exit frm a share like inventure??
butterflyeffec Sayshmm..bhai..it really looks uncertain for 500!...but am waiting for some time...for a month or so...usually AVT gives good march result!...lets see...whats your take on IFB agro and a share like inventure..:P??..the first one is fundamentally very strong and undervalued too ,but the managemnt is too conservative ..havnt given any dividend till now!...the second one has got not much fundamentals i feel..puerly prmoter driven....but doing good...i have 100 shares of ifb at 140 odd level...and 100 for inventure at 162 odd levels...tell me when shud i exit frm a share like inventure??
Hmm....NSE:IFBAGRO looks good to me(techinical point of view)....Stock has really picked up since 2011...for me trading range of stock in next month would be 150-200....seriously bearish above 200...since u entered @140 (which is a strong support level) i dont think u can loose in this trade,until and unless there is a crisis like WORLDCOM/ENRON :biggrin:,just be in the trade,and what u can do is set a stop limit @ 195....55 rs/share spread for u....
p.s keep in mind,this is according to technical aspect of the chart& the stock and its always for short term...(10-15 days at max)....I havent seen it fundamentally...coz then its gonna take good 2-3 days......
VERDICT--HOLD with a stop limit @195 and stop loss @145 .....
Remember the first rule is to never loose money in trading..profit is always second on the priority list) :)
All the best!!!
butterflyeffec Sayshmm..bhai..it really looks uncertain for 500!...but am waiting for some time...for a month or so...usually AVT gives good march result!...lets see...whats your take on IFB agro and a share like inventure..:P??..the first one is fundamentally very strong and undervalued too ,but the managemnt is too conservative ..havnt given any dividend till now!...the second one has got not much fundamentals i feel..puerly prmoter driven....but doing good...i have 100 shares of ifb at 140 odd level...and 100 for inventure at 162 odd levels...tell me when shud i exit frm a share like inventure??
sorry bhai..INVENTURE to dekha hi nahi...... :(
NSE: INVENTURE is no doubt the hottest stock on the exchange....best performing stock when almost every sector is down and out....
So,if i was in ur situation,i would have set a stop loss @ 220 & stop limit @ 280....RSI & MACD confirms that.....and in INVERTURE case support resistance concept is too subjective as the stock is highly volatile and there's just too much liquidity(high Volume as well).....In my opinion stock will perform well tomorrow but cant predict anything.....to be honest,if u entered @160 this maybe the right time to just short the stock!!!!..but its ur take and how much risk u can take!!!!
VERDICT--SHORT!!!! (My personal point of view,it can go either way)
All the best!! :)
No matter how the fundamentals are ...but inventure surely did my job!!......damm!!...i alwys thot that now is the time to sell it ..now i shud sell it..and i have been just thinking it since it was 210-220...but never sold it as i thot it wud break its previous high of 253 odd atleast!..never expectd it go this much!...as gordon gekko in wallstreet says "greed is good"!!...:P..plannin to sell it finally!!
HI GUYS
whats ur take on renuka sugars. its trading around 30-32 range. i had bought few shares when it ws at high at arnd 80. i am looking for averaging aout my investment and buy on dip of the range 25-30.
what say.?
butterflyeffec SaysNo matter how the fundamentals are ...but inventure surely did my job!!......damm!!...i alwys thot that now is the time to sell it ..now i shud sell it..and i have been just thinking it since it was 210-220...but never sold it as i thot it wud break its previous high of 253 odd atleast!..never expectd it go this much!...as gordon gekko in wallstreet says "greed is good"!!...:P..plannin to sell it finally!!
Wow man.. Inventure just hit 300 on NSE!
butterflyeffec SaysNo matter how the fundamentals are ...but inventure surely did my job!!...
I am waiting for the stock to hit bottom again...then,probably would be the time for me to enter......
There's quiet a lot of selling pressure now .....!!!!
:biggrin:
!!! Butterflyeffec bhai aap to malamaal ho gaye!!!!
P.S I Just LOVE this!!!!!! There's no job in this world as exciting as Trading!!!!!
Everyday a new beginning!!!!! New milestones to achieve.....Just ur aptitude nothing else!!!!!!
Just LOVEEEEEE ITTTTT!!!!!! 😃
HI GUYS
whats ur take on renuka sugars. its trading around 30-32 range. i had bought few shares when it ws at high at arnd 80. i am looking for averaging aout my investment and buy on dip of the range 25-30.
what say.?
HMMM...correct!!!! Buy some to average out ur investment and the stock is currently in the BUY mode....be with it...HOLD back the shares that u have bought @80 ..dont sell them and buy some at the current market price....!!!!
U will make a decent profit !!!!
And from next time plz do look at the intrinsic value of the stock before buying..!!
All the best bro!!
May GOD be with SHREE renuka sugars.....
HMMM...correct!!!! Buy some to average out ur investment and the stock is currently in the BUY mode....be with it...HOLD back the shares that u have bought @80 ..dont sell them and buy some at the current market price....!!!!
U will make a decent profit !!!!
And from next time plz do look at the intrinsic value of the stock before buying..!!
All the best bro!!
May GOD be with SHREE renuka sugars.....
kaaliya ji : how do you calculate the intrinsic value of a stock... any links or books on that front will help this noob (ME) in making more sensible decision in the future...
PS: I also bought Shri Renuka @ 60 and an equal number at 40 ... averaging didnt work that well for me but would like to apply that in other...
Also what is the scope of the telecom industry...almost all stocks are low..eyeing at Rcom (around 80-85 range) but need to know this intrinsic thingy before making a decision...
kaaliya ji : how do you calculate the intrinsic value of a stock... any links or books on that front will help this noob (ME) in making more sensible decision in the future...
PS: I also bought Shri Renuka @ 60 and an equal number at 40 ... averaging didnt work that well for me but would like to apply that in other...
Also what is the scope of the telecom industry...almost all stocks are low..eyeing at Rcom (around 80-85 range) but need to know this intrinsic thingy before making a decision...
Telecom stocks are not going to do well for another three four months. TRAI just imposed a fine of about 1k crore. The 2g auction will put some burden on their financials. Dont see telecom doing well in the near term.
Although I am bullish on Sugar stocks, but Renuka Sugars is going through a bad phase.. The management is trying to pull it back, but would only recommend Hold. The stock is more like a sell on rally rather than a buy on dips.
Telecom stocks are not going to do well for another three four months. TRAI just imposed a fine of about 1k crore. The 2g auction will put some burden on their financials. Dont see telecom doing well in the near term.
Although I am bullish on Sugar stocks, but Renuka Sugars is going through a bad phase.. The management is trying to pull it back, but would only recommend Hold. The stock is more like a sell on rally rather than a buy on dips.
One reason for the poor performace of Shri Renuka is (I think) that they accumulated quite a debt during the puchase of sugar mills in brazil. I the subsequent year there was drought and the sugar cane supply was less leading to very less production from the two new mills... (read this in Economic times .. will upload the link as soon as i find it) ...
Also the prospect of sugar industry looks good (As keeler sir pointed out) ... one reason is that UP being the sugar hub of India, had a higher base rate during the Mayawati regime .. although that helped the farmer it was not good for the sugar mills... and with Akhilesh as the CM there are chances that there will be some respite for the sugar mills as it was given during his father's time ...
These are my views and also ET's
.. correct me if i am wrong
kaaliya ji : how do you calculate the intrinsic value of a stock... any links or books on that front will help this noob (ME) in making more sensible decision in the future...
.
Bhai..IMPLEX sir ne Telecom sector ka Postmortem already kar hi diya hai....To main second Question ka answer de deta hun....Intrinsic value
Intrinsic value is the real value of a stock.Like,what is the true worth of a stock taking into account the Financials of that stock.Normally an Equity research analyst/Investment bankers use Intrinsic valuation concept for determining a company's true worth and thus finding potential investment/merger/acquisition opp's.!!! For really understanding this concept u got to have sound knowledge of Finance and the company that u are analyzing.
MBA-2nd year me shayad padhaya jata hai INDIA me....not sure though!!!
Just giving u a brief intro of the concept..hope u will find it useful!!!!
anywayz U ARE GONNA LEARN ALL THIS IN UR MBA,if u take finance as ur specialization !! (Though I am not MBA n i dont wanna be one)
A company can be valued by the following two methods
(a) Relative Valuation(valuation based on similar companies/Trading comps analysis)
(b) Intrinsic valuation(DDM(dividend discount model)/DCF)
And i am gonna explain just one method of how to value a company...
DCF analysis...(Discounted cash flow analysis)..
Steps:
1. Project what the companies CASH FLOWS gonna like...
2. Calculate the DISCOUNT rate of the company
3. Discount and take a summation of the companies cash flows.
4. Calculate the terminal value
5. Discount the terminal value
6. take a sum of the discounted cash flows& add them to the discounted terminal value.
How to project Companies Cash flows:::
Simply from the 3-statement model in ur excel,just make an assumption of revenue,COGS,operating expenses to finally arrive at the operating income.(Now how to project these,u should know the driving factors for that,which is different for every single industry)
Now add the Non-cash expenses (Like depreciation,amortization and stock based comp.) to the operating income.
(Use a % no. or u can use equity research from any financial service provider,for making simple assumptions)
next subtract the increase in working capital & capital expenditures.(Directly take the nos. from 3 statement model or make simple but reasonable assumptions)
Final Formula for calculating the unlevered free cash flow = Revenue-operating expenses-COGS-taxes +dep. +amortization+stock based comp.-inc. in working capital - Capital expenditures)
U can also calculate levered free cash flow,if u want to ..i dont
...not of now atleast :)Next Calculate the WACC::::
Make Assumptions for the RiskFree Rate, Equity Risk Premium, and Cost of Debt/Preferred Stock........
(How to calculate these..is a very long tedious approach..what u can do is pull up the previous years data and the current government bond rate and make an app. assumption)
Now calculate the median unlevered BETA for trading comps...
U can get it from reuters/bloomberg or if u dont have access to their subscription u can simply pull it off from google finance(i hope u know this)
Use this catholic formula for calculating the Unlevered beta
Unlevered Beta = Levered Beta / (1 + (1 - Tax Rate) * (Debt / Equity))
Now a bit of reverse engineering for calculating the LEVERED BETA
Levered Beta = Unlevered Beta * (1 + (1 - Tax Rate) * (Debt / Equity))
Now calculate Cost of equity :::
Cost of Equity = RiskFree Rate + Equity Risk Premium * Levered Beta
Now calculate WACC::
WACC = Cost of Equity * % Equity + Cost of Debt * % Debt * (1 Tax Rate) + Cost of Preferred Stock * % Preferred Stock
now,Present Value of Unlevered Free Cash Flow = Unlevered Free Cash Flow / ((1 + WACC) ^ Discount Period
& Present Value of Levered Free Cash Flow = Levered Free Cash Flow / ((1 + Cost of Equity) ^ Discount Period)
Now we are all set to calculate the TERMINAL VALUE/intrinsic of the stock
U can either take Multiples method or Gorden growth method:::
In this method we take the company as a growing perpetuity.....
& Terminal Value = Free Cash Flow * (1 + Terminal
Growth Rate) / (Discount Rate - Terminal Growth Rate)
**For Unlevered Free Cash Flow, we use WACC for the Discount
Rate and for Levered Free Cash Flow we use Cost of Equity for
the Discount Rate**
Discounting the Terminal Value:::
Present Value = Terminal Value / ((1 + Discount Rate) ^ Period)
For Unlevered Free Cash Flow, use WACC for the Discount Rate - for Levered Free Cash Flow, use Cost of
Equity.
Adding the Discounted Terminal Value and Discounted Cash Flows::::
Simply sum up the discounted cash flows over your entire projection period, and then add the discounted
Terminal Value:
That will give u Enterprise value which is what we need..
If you want a pershare value, though, you can just add cash, then subtract debt,
preferred stock, minority interest and so on - and then divide by the company's outstanding shares:Thats the INtrinsic value of the stock!!!
If you've used Levered Free Cash Flow, you have Equity Value, so you can just divide by shares outstanding..... :biggrin:
U can also create sensitivity tables for the same...
I have read this concept some yrs. back....Hope i have not messed up on any part....:)
Hope u find this useful...though looks a bit tedious but its rewarding to say the least......
As for any reference material i think everyone out here knows about JOSHUA ROSENBAUM........Nice book but not for starters !!! Have a look if u want to !!!!
kaaliya ji : how do you calculate the intrinsic value of a stock... any links or books on that front will help this noob (ME) in making more sensible decision in the future...
PS: I also bought Shri Renuka @ 60 and an equal number at 40 ... averaging didnt work that well for me but would like to apply that in other...
Also what is the scope of the telecom industry...almost all stocks are low..eyeing at Rcom (around 80-85 range) but need to know this intrinsic thingy before making a decision...
Shree Renuka
I don't like Sugar stocks. Two reasons. 1) Cyclical Industry. The business depends more on the nature, which is not in the management's hands. 2) The prices of final product as well as raw material are influenced by Government policy. Sugar mills have a little say in it. Hence pricing pressure will always be there. In case of Renuka Sugar, Huge Debt that too in Foreign Currencies. With Rupee depreciating to Rs. 54 in December and now to Rs. 51.5; it is certainly not helping the company. I remember, the stock had fallen by 30-35% in a single day in November 2011. That day only one should have booked losses.
Any way, now just hold the stock, the MD Narendra Murkumbi is an IIM A product.
He has the experience of turning around the companies. And the size of the company is huge. I think its the biggest or 2nd biggest Sugar producer in the country. And as the elections in UP are over, the farmers can wait for next 5 years to increase the MSP again.:oops: So good for Sugar industrialists.
Still looking at the FCCBs, I would not recommend to buy more of it. Just hold whatever you have got. It may take 2-3 years at least to reach 80 again I believe. I feel, interest rate sensitives should be bought now. We are on the top of interest rate cycle and now the rates will start coming down. Big plus for Infrastructure/Banking sector and moderate plus for Auto/Real estate sector. 😃
Is it worth joining financial modelling courses offered by pristine and other coachings??..my aim is to get a front office job in an investment bank before or after mba!...will it be of any help??
Sold inventure at 302-303....,jamkar pee:drinking::drinking::drinking:..but my dad warned me to stay away frm such stocks...manipulative, risky,fundamentally weak....hez more of an investor and hates short term or intraday trading!...:nono:
Hi,
I just discovered this thread! Seems like a good discussion place, better than moneycontrol MMB!
My 2 cents to your query -
I checked this one out..Looks a good stock investment wise but it just hit its 52 week low on friday on a bullish market day. Better watch out for a couple of days, let it settle a bit or buy in small quantity now and more when it starts moving up. BTW its 200 DMA is around 138. P/E and P/B are great
but I do not expect much upside considering its historical price data and moving averages.Exactly thats what I am trying to figure out why it hit a low when the whole market was going northwards. i expect the stock to test levels of 145 by end of april.. The stock moves in the run of results and then cools down which is what has been happening for the last three quarters.