Thursday, January 24, 2013

HDIL - Shaky foundations

"You may fool all the people some of the time, you can even fool some of the people all of the time, but you cannot fool all of the people all the time" - Abraham Lincoln
Housing Development and Infrastructure Limited, HDIL is down (-38%) in past three days.
Trigger was promoter selling 37 lac HDIL shares @114 on 22 Jan 2013. (NSE bulk deals).
Few days earlier , GOLDMAN Sachs bought 22 lac HDIL shares @121.
Waterfall drops

Detailed post below

Thursday, January 10, 2013

Arshiya International - zero 0 stock target and junk credit rating

Arshiya International (cmp 78)- deserves zero 0 equity target and credit rating of junk.
...and things that seem simple macro /value buys can be bit complex as well . ;-)
Waterfall drops

Hmm been reading in past 2 days in news. Disgruntled employees of Arshiya ( who havent been paid their salaries since past months) have said this "" the promoters have misguided investors, stakeholders by painting a rosy picture so far, while the company is hollow - it is a mini Satyam."
So I thought why not go through balance sheet,cash flow & earnings to see how it compares with Satyam ?

Friday, August 17, 2012

S&P 500 - Top in 2012 vs 1999 - 2000 vs 1987 top

US stock market Index  S&P 500 closed at 1418 and is up +113% from Mar 2009 intraday low of 666.
I.e this `Bull Market` rally is now 42 months old.

Since 1950 we have seen just two other periods with similar returns in similar duration - 1987 & 1998 to 2000.
We all know what happened in 1987 & 1999 /2000 - infamous for Black Monday/Friday crashes & corrections.
To put this into better perspective ,lets see 42 months rolling returns of S&P 500 since Jan 1879 to Aug 2012  (in past 1604 months or 133 years).
Here is the annotated chart. Commentary is not required.
Click to zoom

Sunday, August 5, 2012

L&T - Does this Titanic deserve AAA rating ?

L&T - Larsen & Toubro - Does this Titanic deserve AAA credit rating ?
Click to zoom. (Will add commentary on the table & detailed post later.)

Wednesday, July 11, 2012

Update on LIbery Phosphate - Sell / Exit

Update on Liberty Phosphate- 12 July-2012 -I believe earnings growth will be a challenge in FY13 ( on 30% reduced subsidy). 
So my basis is - cheap may continue  to remain cheap/ get cheaper. My principle is Valuation is never an only trigger to buy or sell , earnings growth /momentum is MOST important.
So I would rate as SELL /Exit .I`ve sold my long position at ~ breakeven.
When one is not sure of prospects,it is always better to exit.One can always enter again later.Will enter again if I see some triggers.
Update added in the earlier post here

TCS - Sell / Short - on deteriorating Earnings quality

TCS - Sell / Short - on deteriorating Earnings quality

Cmp/LTP 1258
Market cap Rs 246,414 crores or USD $ 44 Billion.
This post is based on theme of  ""Revenue is vanity ,margin is sanity & cash is reality".
 Event -TCS - Tata Consultancy Services - India `s largest IT Services company will post Q1 FY13 results on 12 -July 2012.
Objective is this post is comment on deteriorating earnings quality of TCS. In fact worst in past 8 years.
Summary - based on past 2007 /06 valuation peaks and price reaction, TCS could see a 20%-30% correction. i.e 1000 target. ( 200 DMA of 1160 - (8%)  lower from here would be first logical target)

Monday, July 9, 2012

Globus Spirits - Buy

Globus Spirits - Buy .
Cmp /LTP 117 +20%
Market Cap 271 crores.

BUY -Target 200 in 1 to 2 years.  i.e 2x upside
Today -High  volumes traded of 9 lacs today at BSE ( 36x the two weeks avg. volume) on block deal - Franklin Templeton has sold and I suspect existing DII  IDFC Premier Equity Fund -already holding 8% has bought this stake) . Shareholding pattern as on March 2012 here

Just a quick and brief update.

This stock has been on my buy watchlist for at least past 1 year. And I believe time has come to enter.
Gone through my checklist. All looks `Green` i.e ok to go for investing.
Will come up with detailed post later.
  • Domestic Consumption play. 
  • Business - IMIL, IMFL , country `affordable` liquor
  • On FY12 - Sales 557 crores, EBITDA 75 crores, Net Income of 40 crores. 
  • FY12 Debt at 110 crores  ( Long term debt 60 crores -up 3x YoY) for capex. that will lead to 50% growth in expansion. No big capex seen in FY13.
  • FY12 EBITDA Margin fell to 13.5% from 17%. Link here
  • PE 7x, PSR of 0.5x,EV/ EBITDA of 5x with ROCE / RoE of  ~20%
  • From Sep` 2009 IPO price of 100 , doubled to reach all time high of 191 in July 2010. ( had raised ~70 crores in the IPO)

Thursday, July 5, 2012

Titan Industries -Short- Show us the Cash


Cmp /LTP 233. Market cap 20,700 crores
"Revenue is vanity ,margin is sanity & cash is reality" & Titan `s cash reality is definitely not looking good.
 Just gone through FY 2011-2012 annual report of TITAN INDUSTRIES. 
While going through the consolidated financials ,found some strange numbers so thought of posting it.
Summary - I believe Titan is due for a 8% to 10% correction at least  i.e Target 1 of 210-215.Target 2 of 30% correction i.e retesting of Dec 2011 lows of 170. Reasons ( see below)

Monday, May 14, 2012

Liberty Phosphate - Buy - Initiating coverage

Update - 12 July-2012 -I believe earnings growth will be a challenge in FY13 ( on 30% reduced subsidy). So basis is - cheap may continue  to remain cheap/ get cheaper. So I would rate as SELL /Exit .I`ve sold my long position at ~ breakeven.When one is not sure,better to exit.One can always enter gain.Will enter again if I see some triggers.
Liberty Phosphate - Initiating coverage -Fertlize your portfolio !

Rating / Reco = Buy  at cmp /LTP 77 with 2x upside target in a year i.e 150.
Been tracking this stock since over ~1.5 years. I believe time is right for increasing exposure.
Great results.Details & target rationale below

Monday, May 7, 2012

Cochin Minerals and Rutile - Maintain Buy

Cochin Minerals and Rutile - CMP /LTP 246 + 10%. Upper Circuit and at an all time high.
Had first initiated Buy coverage on 7-Feb-2012 when price was at 148 with target of 300 .Post here
i.e up +66%  in 3 months
Q4 FY12 ending in March 2012 Results out. Blowout results !!
Maintain Buy with target upgrade to 500 i.e 2x upside.Details & Rationale below

Sunday, May 6, 2012


UMANG DAIRIES. CMP/LTP 50. Market cap 111 crores.
Had initiated Investment Buy at 25 in Sep`11 with target of 60. Already up 2x .Maintain buy.
Previous posts here 
I would raise target to 65-75 range i.e +30% to +50% upside.Rationale given at the end.
Good results.Details below

Monday, April 16, 2012

Indag Rubber - great Q4 March 2012 FY12 results.Maintain buy

Indag Rubber - great Q4 Mar 2012 & FY12 results.Maintain buy. 
Cmp / LTP  - 217 . All time high  /life time high.

It is already up +80% since my initiating buy recommendation in Oct`11 at price of 120. Had reiterated buy with target of 320 in recent posts after results. Previous posts here
Maintain the earlier target of 320 i.e ~50% upside from here. Though , a 2x upside i.e 450 target from here is also very much possible based on valuations and good results.But we`ll cross the bridge when we come to it.
  • Q4 Mar 2012 ending results ( vs YoY) - Sales +37% , EBITDA +72%,PAT +78%.
  • FY12 vs FY11 - Sales +44% , EBITDA +84%, PAT +84%
Details below

Sunday, April 1, 2012

NIFTY trading strategy backtest performance -Buy at month end,sell 5 days later

End of Month / Turn of Month Calendar Seasonal trading pattern anomaly
8 May 2012 - Updated with May 2012 performance.Short in April end, cover T+5 in May = +4.7% return
10 Apr 2012 - Update with April 2012 performance.
Wrt. March 2012 NIFTY close of 5295, after 5 trading days in April, NIFTY closed at 5243.6. i.e (-1.0%) down from March end. This definitely breaks the 100% winning percentage since 2002. But it actually gave a +1.5% return ( from 5295 to 5375 ) ,intraday ;within the 1st five days.( matches with the median April return since 2001- excluding outliers.See 2nd table table below)
Here the updated table with May & April, 2012 performance.April -Winning percentage falls to 83% ( from 91% earlier) . ( click to zoom)

Here is the summary table.Click to zoom. Will add commentary later. ( Its self explanatory actually)
Winning percentage of this trading strategy has dropped from high of 100% in year 2004  to 50% in 2011.
Best months for this strategy- Highest returns to lowest - September, November,December.April (new India Financial Year start) would be fourth in rank, based on Sharpe ratio.

Thursday, March 29, 2012

Moving average based Trading System performance NIFTY

EMA / DMA Moving average based Trading System performance based on India NIFTY Index.
 Period tested - ~ 5 years ,from Jan 2006 to 5 Mar 2012 i.e 1533 trading days
  • NIFTY range in test period - low of 2836 to high of 6318.
  • Bull  / Bear Markets covered in test period - 2 bull market of ( 2006 to 2007 and 2009 to 2011) and 2 bear markets - 2008-2009 and late 2010 - 2011
  • Signal  / Indicator used  - 10 Day exponential moving average EMA
  • Rule - BUY if at EOD (End of Day close) if NIFTY closes above 10 day EMA. Keep position open till NIFTY goes below 10 day EMA (at close) and square off / exit at EOD close.
  • No. of trades generated  - 121 i.e average of 1 trade in 12 days. See below for details

Saturday, March 24, 2012

NIFTY performance after 5 straight / consecutive down weeks

NIFTY performance after 5 straight / consecutive down weeks.
Thanks to!/korareddy for the work. I discovered him on Twitter recently.Highly suggest following him,his blog. I also plan to buy his book  - High Profit Trading Patterns.
So after a +23%  rally in NIFTY India / Sensex from low of 4544 on 20 Dec 2011 to high of 5607 made on 21 Feb 2012., we have seen a ~(-7%) correction to 5228.Last friday, NIFTY closed at 5278 just below 200 days Exponential EMA / DMA of 5385.
Nifty has closed for 5th straight / consecutive week,after 7th straight week of gains.So now what happens next week ? Details below.