Stocks for the long and short term portfolio

[Einstein]

I always consider company's networth into my valuations, networth in india and in foregin they call it owner's equity its simply total assets - total liability and their liability is going up slowl. the chinese govt recently have plan to sell a stake in company at home to raise capital. long term borrowing = debt, means stressed networth of an overvalued company.
additional: as the company is posting flattish profit after tax rest is common sense.

 

[Einstein]

got some incredible figures while applying my valuations model on some of the US companies. exxon mobile valuations stands at 130-140US$ per share. berkshire hathway valuations stands at 185,000-190,000 US$ per share,while its incredibly compounding at 8% per annum. now i m sure my valuation model is right.

if anyone interested in some valuations he can look at some of the incredible figures on bank of america ml balance sheet they are holding 1.3 trillion$ worth assets on their balance sheet. simply amazing. 1 trillion $ is the total market capitalization of Indian stock market.

 

[jamit_05]

Einstein,

Can you value Bhel?

 

[poolspan99]

Guys.. This looks a awesome thread. Hats off to
All..
Am planning to buy tata global.

Any advice pls? Is t the ryt tym or will corect a further?

 

[Einstein]

@jamit, post 499. I already did.

by the way since im a greedy investor, i won't invest in it until its starts showing good profit figures which should happen after rupee value depreciation,
if that happens its a multibagger in long term(4-5 years). same story with the bajaj-auto.

always remember this. market will invest in growing trend only. so either hold long or wait for good results(tapering).

 

[jamit_05]

Guys.. This looks a awesome thread. Hats off to
All..
Am planning to buy tata global.

Any advice pls? Is t the ryt tym or will corect a further?

It is going at a PE of 25. Looking at last 5 years performance that is expensive. It is an FMCG company and this sector is currently hot. Hence expensive is no surprise. For a long term investor, he could get a much better price for it in the future.

In fact, shun all the hot sectors if you want to put your money in for the long term.

 

[Einstein]

It is going at a PE of 25. Looking at last 5 years performance that is expensive. It is an FMCG company and this sector is currently hot. Hence expensive is no surprise. For a long term investor, he could get a much better price for it in the future.

In fact, shun all the hot sectors if you want to put your money in for the long term.

take a look at its cash flow. they are taking continuous loans. their profitability is doubtful.

 

[jamit_05]

@jamit, post 499. I already did.

by the way since im a greedy investor, i won't invest in it until its starts showing good profit figures which should happen after rupee value depreciation,
if that happens its a multibagger in long term(4-5 years). same story with the bajaj-auto.

always remember this. market will invest in growing trend only. so either hold long or wait for good results(tapering).

You seemed to be inclined towards the Growth Investment approach. It is a very demanding job. Demanding in terms of hours of work in research and the mental grit to take losses on many investments. You are well suited for the challenge. Good luck.

Value Investing does not demand much: Find Good companies that are already established hence are in plain sight, and buy them when they are performing poorly. And hold them till the cows come home!

 

[jamit_05]

take a look at its cash flow. they are taking continuous loans. their profitability is doubtful.

We must be looking at different headings.

Tata Global is better than most other tata arms because they have been repaying and reducing their Long Term Debt over the years. Hence, interest expense and Debt-to-equity is coming down each year. And all of this is happening not from sale of assets or extraordinary income, but from core-operations.

Their highest Long term debt was 1900 Cr in FY09, and in FY13 it came down to 700 Cr.... gradually. They have a well established and an old management.

The profitability is a little low since the Net Profit Margin is only 5%... but hey, they have not posted a single losing quarter in oh so many years.

 

[Einstein]

Tata Global:

Corrections:
Total Debt 1,016.83(march2013) 888.26 1,041.50 1,796.78 2,431.07(mar2009)

*unable to verify this data as the annual report date on their website is corrupted.

consolidated data, long term borrowing + Short term borrowing. *in Cr.


The main reason why I would never ever invest in the Tata Global are below.

1. Their main source of revenue from Tea and coffee (90% source of revenue) is flat, details are below.
Total income from operations:
September 2013 - 1933.50 crores. (quarterly) Vs. September 2012 - 1864.46 crores. (quarterly)
sales of Tea is flat YOY and only sales of coffee is improving marginally YOY.

2. Tatas have the the most expertise CAs who are good in manipulating figures legally.

3. Very low margin of safety here, if the revenue goes down, then the company don't have enough expansion plans and fundings to stabilize.

4. As per my valuations they are already expensive. atleast 40% expensive.

5. cash flow showing some unwanted figures. sales of long term investment by firm is not a good thing YOY.

don't have its 2013 annual report, can't say how much they can gain from rupee depreciation. profit shall not be in excess of 100 cr from exports.


reading other broker's report: http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=945952&num=0
they surely are way too much optimistic. -_-