Stocks for the long and short term portfolio

[vssoma]

hi jamit,
what is your view abt SBIN, is it good level to enter in it for long term or need to wait some more time to get lower level?

 

[oilman5]

In this month of August, Bhel's Open was 158 and CMP is 106;

That is an enormous fall of 50% !! If NSE continues to slide, what stops Bhel from falling another 30 to 50%... noticeable nothing!

The only support of any strength is seen not before 2004 low of 37.50!
Don't believe me.... live to see it!

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your observation is right,but i add a typical fact.BHEL dont publish a/c like when they do job execution...........but when actually get cash.So their job in hand/result is different............they believe ROKRA...........when they get payment actually after project completion.......they show in their books.A real inside truth(unknown to a/c field)

 

[jamit_05]

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your observation is right,but i add a typical fact.BHEL dont publish a/c like when they do job execution...........but when actually get cash.So their job in hand/result is different............they believe ROKRA...........when they get payment actually after project completion.......they show in their books.A real inside truth(unknown to a/c field)

This is the very fact that has got me a little tied up for the past few days. I wanted to know the exact reason why Bhel is falling. Is the reason other than it being a PSU? Well, it is.

Its Free Cash Flow is negative for some time now. In 2012 it got negative payment! Means no Rokra... means increased working capital. It has been eating into its cash reserve, which is down from 10K in 2009 to 6.7K Crore in 2012... there is a negative trend to it. So, if payments default then EPS will take a huge hit. May be, that is what investors are assuming and have rated Bhel at lower EPS. (If Banks can have NPAs then why not BHEL, LT).

The good thing is, this is not a weakness of the management. LT has the same problem. So, basically the industry is facing a bad season(s).

 

[jamit_05]

hi jamit,
what is your view abt SBIN, is it good level to enter in it for long term or need to wait some more time to get lower level?

Are your investment objectives long term (5 yrs plus) or short term?

If short term, then don't look at banks. They will bleed more.

If Long term, then buy SBI at 1500 and more at 1000 and forget about it. Your money will double in a few years....

 

[jamit_05]

One more point that goes majorly against BHEL is that, it has clients in the power sector which is at its worst. So, several of these payments are likely to be delayed and defaulted if the GOI does not do something about it. But, LT is diversified.

So, if a value investor thinks BHEL will survive this storm and emerge a winner then BHEL is a candidate for purchase. It is a gamble.... an educated one.

I, for one, not only expect BHEL to emerge as a winner but also expect it to change its business policy for the future that the company does not come to turmoils. I am eager to start SIP, but the momentum is sharp and thus far waiting has paid off.

 

[jamit_05]

Yes Bank​

It is believed that Yes Bank is crashing because RBI squeezed out the excess cash. This excess cash was used for Currency speculation.

In F.Y. 2012-13

Yes Bank had Other Income of 1260 Cr.
And Net profit of 1300 Cr


If we consider this Other Income of 1260 Cr. entire raised out of speculation, then this will seriously affect the Quarterly results because Other Income is as much as the Net profit! Sure, operating expenses etc will reduce but we are just looking at the impact of liquidity squeeze.

Its strongest point is that its NPA is Zero.

A very strong support of 200-225 is approaching. But the stock is riding on an evil momentum. I am not sure whether it will be absorbed easily. Lets keep our eyes peeled.

Please post if you guys have any opinions/news or interesting hearsay. There is an ongoing case in HC, but this fall started after RBI credit cut policy.

Yes Bank crashed by around 10% in the early session... and made a low of Rs.220/- just as anticipated the day before. However, recovered back to 240.

This recovery is not good enough a consolation. If the bank is so good then must it crash 10% while others are not going down that much. Do the big investors know something we don't? Who is to say that it won't continue the carnage tomorrow?

Yes Bank is a shady business for another fundamental reason: It is seen as a growth stock. Investors are bidding high on Yes cuz they are expecting it to grow. Well, logic tells me that this is not the time to expect growth in Banking for another 2 years at least! Even the established ones will fight to survive...

When the investors lose patience, or have they already, and start to dump the stock.... it will have only one place to go....

 

[oilman5]

One more point that goes majorly against BHEL is that, it has clients in the power sector which is at its worst. So, several of these payments are likely to be delayed and defaulted if the GOI does not do something about it. But, LT is diversified.

So, if a value investor thinks BHEL will survive this storm and emerge a winner then BHEL is a candidate for purchase. It is a gamble.... an educated one.

I, for one, not only expect BHEL to emerge as a winner but also expect it to change its business policy for the future that the company does not come to turmoils. I am eager to start SIP, but the momentum is sharp and thus far waiting has paid off.

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yes since unless they recd payment, they dont show income, so loss written off concept is inbuilt , since some state elec. board- has not paid, they dont show it income,-personally i know as i am in touch with Bangalore-hardawar,........may be after April they shall get money.
regards

 

[manojborle]

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Last bar yet to complete, your views....

 

[jamit_05]

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Last bar yet to complete, your views....

It is hard to predict. But, if I were to trade a shakeout play then I'd pick a scrip which is in a sector which is in an up-cycle. Power is in shambles. Plus adani is best to trade as a breakout failure of resistance (not support).

 

[jamit_05]

AXIS​

Another very good Bank.

It has much better stats than the biggest bank (SBI).
It fares better in

1) ROE
2) NPA
3) Growth
4) NIM
5) Higher PE (hence investor popularity)

Plus its is a large bank, unlike Yes, so more stable.

It is a bank to be had. I will buy 50% (of its quota) at Rs.785 ... at one go. Then will SIP within 30% range.