The MoneyVidya.com Blog - Latest Comments

Re: Analysis - Patni computers

itjobs1 — Fri, 11 Dec 2009 13:46:38 -0000

Thanks for this information.

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Re: Hyderabad Industries: Stock Analysis for Long Term Investments

tipguy — Fri, 11 Dec 2009 11:06:11 -0000

Born Free,

The issue with your comments is, you want to keep harping about grapes. AND all this time I am talking about apples (and not grapes). I hope you understand this line. These are two different things.

In your first comment you tried to teach me “reasonable knowledge of basic business characteristics”. That’s how you start you comment, AND ignored that I did make an observation about turnaround vis-à-vis growth of construction industry and Indian economy. Which is same as yours? Isn’t it?

Now in your second comment you are trying to teach me “how to eat my pudding” and challenging me for 6 months. AND ignored last two paragraphs explaining why I am not buying.

I will request you to read last two paragraphs (including the disclaimer). And after you understand its meaning, may be than we can discuss pros or cons, or fair valuations, like two decent human beings, and not throw challenges like two dogs on the street.

Best Wishes,

Re: Hyderabad Industries: Stock Analysis for Long Term Investments

Name — Thu, 10 Dec 2009 23:16:51 -0000

Dear TIP Guy,

You are imputing things which I had never said.

I never mentioned the two points which you had referred to.

The main point which I have made is that the business has had a tremendous change in its business characteristic. This coupled with the low debt, very low equity, very healthy free cash flow at the current valuation is a great opportunity.

In fact, you yourself in your analysis had mentioned the same development as "turnaround".

What I am saying is that this turnaround, might be a long term trend and we are just at the beginning of this trend. Leaving this now, might not be a good decision.

The proof of the pudding is in the eating. Now Dec 11th 2009 the price is 427. Let us review the price after 6 months.

Regards,

Born Free

Re: Hyderabad Industries: Stock Analysis for Long Term Investments

tipguy — Wed, 09 Dec 2009 23:17:59 -0000

Hello BornFree,

Like your name suggests, you are free to interpret any analysis as you may wish. We do not have to agree on same thing. And thanks for the giving me tutorial about basic business characteristics.

I do not think you understand my objectives and hence you are not able to understand this in proper context. How can I argue when you think (1) operating cash flow below debt is fantastic; (2) margins in high single digits-to-low double digits is great; (3) the last five years you mentioned, EPS were 13.63, 52.73, 18.73, 18.86, 59.08. You think these are consistent and great.

For my hard earned money to invest, I can surely find better companies that these numbers.

Thanks for your comments, I enjoyed reading your perspective.

Best Wishes,

Re: JUST JOCKEYING – PAGE INDUSTRIES LTD.

tourtrav — Mon, 07 Dec 2009 21:27:54 -0000

Interesting post. I have made a twitter post about this. Others no doubt will like it like I did.

Re: Hyderabad Industries: Stock Analysis for Long Term Investments

Bornfree — Sun, 29 Nov 2009 23:14:40 -0000

Dear TIP Guy,

Any analysis of a company should be done with reasonable knowledge of basic business characteristics.

Whatever you are saying WAS correct till 3- 4 years back. All of us will testify to the fact that in the last 5/6 years time, there has been a wholesome change in India, both in the urban and rural areas.

People have got more disposable income. This has led to increase in a great increase in rural penetration of TVs, Cell Phones, regional newspapers, biscuits, breads, shampoos etc.

The above is not a news item anymore. All of us are aware of that.

However, a significant change has happened w.r.t Hyderabad Industries product consumption. Originally, in this industry, the institutional purchases ( like Government / NGOs / Corporates etc) where 80% of the business. Balance 20% were retail.

Now, there has been an absolute U turn. The retail business is 80% and the institutional business is 20%. As everyone knows, retail business is high margin for the manufacturer, as the customer purchases based on his brand comfort level. Whereas the institutional business is low margin as the big buyers squeeze the vendors.

This has benefitted both Hyderabad Industries and Visaka Industries. Between them, I think they have almost 50% of the entire industry capacity.

What you are mentioning as "turnaround" is the result of this phenomenon. Now, when you consider this aspect, you can view the entire analysis in a new light. The entire business model now is end customer based. The margins are better. Customer goes for good brands. The product must be easily available. Thus they need a good distribution network. It should have a high credibility and must have been around for a long time.

If you look at all these, you will find that Hyderabad and Visaka, both will qualify on all these fronts. Hence, what you are dismissing as a turnaround case, is a genuine business phenomenon.

Now coming to the valuations.

Hyderabad industries is available at a very low PE of approx 5.0; Debts are very low; Equity is very low; Their cash flow is fantastic. Thus you are seeing a great opportunity to enter a high growth business at very low prices.

It will not be surprising if this industry starts quoting at an average PE of 12-15 very shortly. That gives almost 100% upside from the current levels.

And even then, the counter will not be overvalued.

And we have not even considered the India growth story yet. If that happens, that will be the icing on the cake.

Re: Hyderabad Industries: Stock Analysis for Long Term Investments

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Re: 5 star analysts becoming rarer on moneyvidya.com

cherukuri — Sun, 15 Nov 2009 01:13:32 -0000

kcp is the best bet at this price

Re: 5 star analysts becoming rarer on moneyvidya.com

cherukuri — Sun, 15 Nov 2009 01:11:01 -0000

kcp is best among cement scrips

Re: Ratio analysis primer : Part 1

financialratioanalysis — Fri, 06 Nov 2009 01:03:42 -0000

Great information on financial ratios. Ratio analysis is an excellent method for determining the overall financial condition of your small business. They are also very useful for making comparisons between your business and other businesses in your industry. Ratios are useful to so many groups because they provide benchmark measures and help clarify or answer critical financial questions about organizational performance.

Re: Ratio analysis primer : Part 1

financialratioanalysis — Fri, 06 Nov 2009 01:02:59 -0000

Re: PortfolioEdge - an alternative approach to portfolio allocation

swingtrading3 — Wed, 28 Oct 2009 03:15:22 -0000

Nice one. I have stumbled and twittered this for my friends. Others no doubt will like it like I did.

Re: 5 star analysts becoming rarer on moneyvidya.com

p4bhai — Sat, 10 Oct 2009 11:42:19 -0000

i like..

Re: Lehman - unknown to the next generation

swingtrading — Mon, 28 Sep 2009 08:15:47 -0000

Nice one. I have stumbled and twittered this for my friends. Hope others find it as interesting as I did.

Re: Calls for Wed 15th July by MoneyVidya.com’s top investors

mlgreen8753 — Thu, 24 Sep 2009 15:48:57 -0000

I got a pick for you. Mentor Capital (MNTR). I am optimistic about their future stock prices due to the interest they have in Quantum Immunologics, which you can read about here.

Re: Understanding Demat and Trading account relationship

tradeanup — Mon, 21 Sep 2009 19:11:59 -0000

Relationship of DMAT account to Stocks is same as that a Bank account has with Cash.
Bank account = holds cash balance, we can withdraw/depost cash.
DMAT Account = holds stocks, we can withdraw stocks to pay to someone who has bought them from us, or deposit stocs when we buy it from someone.
DMAt accounts may also gets stocks deposited directly as a result of IPO allotment, bonus, split announcement by company.

Happy Trading

Re: S&P Pan Asia Dividend Aristocrats

john191 — Sun, 20 Sep 2009 00:22:47 -0000

Loved to read your blog. I would like to suggest you that traffic show most people read blogs on Mondays. So it should encourage bloggers to write new write ups over the weekend primarily.
regards
sears parts

Re: Calls for Thursday,28th May by MoneyVidya.com’s top investors and traders

dipanwita — Mon, 14 Sep 2009 08:50:25 -0000

Type your reply...

Re: Calls for Thursday,28th May by MoneyVidya.com’s top investors and traders

dipanwita — Mon, 14 Sep 2009 08:49:21 -0000

buy kfa at current price target 55/-

Re: Performance

rohit — Fri, 04 Sep 2009 11:17:06 -0000

Hi silver
i am not sure how the return is calculated ..i am assuming it must be a plain average. the computation is done by a moneyvidya formulae ..i dont have access to the formulae

Re: Performance

tipguy — Thu, 03 Sep 2009 10:10:12 -0000

Rohit,

There is a perceived notion that moneyvidya.com site is oriented toward traders and speculative stock picks. The long term value focused investors do not have any role to pay here. However, I believe it provides an excellent platform for all types of investors to be rated among the peers on a community basis. Yes, it would help to have a feature that allows removal of stocks at a future date. Although, I think that needs to be bounded by some aspect otherwise there will be a tendency of not closing winning position to keep ratings/returns higher.

Congratulations on the performance. It does show that ideas discussed on your blog are highly rated by an independent platform. It gives an independent rating to your ideas. Everybody touts their own horns, but there are very few to demonstrate it like you did.

Best Wishes,
TIP Guy

Re: Performance

silver — Tue, 01 Sep 2009 18:29:26 -0000

rohit how is this 69% calculated ? Is it a plain average of all the returns of your picks ?

Re: Performance

rohit — Mon, 31 Aug 2009 11:07:33 -0000

Hi silver
i am not taking any offence from your comment. i really mean that an 8 month outperformance is not really statistically significant.
your understanding of how i have calculated outperformance is correct ...the moneyvidya portfolio- index return during the same period is around 20%. ofcourse this keeps changing on a daily basis.
i personally consider a 2-3 yr performance or more to be significant in terms of outperforming index. shorter time periods can be due to luck - both good or bad

Re: Performance

silver — Sun, 30 Aug 2009 19:03:14 -0000

@rohit, don't misunderstand me. I am only trying to understand how did you calculate relative performance. Our outperformance?
Is it simply that BSE Index in timeframe returned X
You returned Y.

Y-X = outperformance i.e 20%

Re: Performance

jagoinvestor — Fri, 28 Aug 2009 11:44:59 -0000

@Rohit

Good job :) .

Manish