Stocks for the long and short term portfolio

[jamit_05]

Amitji..........after today ,do u feel shortterm upbias ?

In the Futures thread, I am ready to short full quantity. Just waiting for the signal. So, I see the Oct month to be Red.

Fundamentally speaking, the economy is still doing poorly. Market is going up only because of no-tapering, which too is on shaky grounds. As soon as that changes, we will be below 5500 again.

 

[jamit_05]

What about geetanjali gems

Not following it. But, it has sharply tanked. I dont like it when that happens. However, wouldn't mind a scrip correcting gradually.

 

[maneverfix]

Re: Down with LnT

Priceless knowledge, one request is to carry on this thread even after your portfolio is in place, this thread is giving us FA understanding that a layman can also learn.

Accountants are paid for a very specific job of prettying-up the Statements. Their job is to make sure that the "Popular Ratios" look good so that their company gets through majority of "Scans and Screeners".

A serious investor owes it to himself to go deeper.

For ex. it is common practice for companies to "dump invoices" near the end of F.Y. This increases sales revenue. Then the companies's media-reps go on air declaring another year of steady growth in sales. But, when times are tough, like they are now, this forced-invoicing does not readily convert into cash or payments. Hence, a responsible investor has to follow the "Real Money" and not just numbers.

Another such scam is the all-too-famous "Debt to Equity Ratio".

More on that later.

 

[jshah9]

Re: Down with LnT

Priceless knowledge, one request is to carry on this thread even after your portfolio is in place, this thread is giving us FA understanding that a layman can also learn.

I second that....This thread is very good for all of us to understand....teach a man to fish and you feed for lifetime...

 

[jamit_05]

Re: Down with LnT

I second that....This thread is very good for all of us to understand....teach a man to fish and you feed for lifetime...

Priceless knowledge, one request is to carry on this thread even after your portfolio is in place, this thread is giving us FA understanding that a layman can also learn.

Yes, learning is fun for all big and small. I feel energized when I discover.

I was eagerly expecting the market to come down to 2011 lows. At which point I would have deployed at least 50% of my funds in the scrips I have shown faith; Axis bank being the newest discovery. Alas! FED did not taper.

I think I have enough number of large cap stocks to give my portfolio stability. Now, I must include some mid-caps as well. So expect some of my point of views to attract controversies.

Shall keep you guys posted. I have lots of research amassed on my desktop. Do remind me to follow-up on promises.

Regards.
Amit.

 

[DKALA]

Dear jamit, i like to invest rs 2 lacs in stocks for 1 year. And my expactation is atleast 60 to 70% return by the mid 2014. Will you plz help me to make portfolio.

 

[prashyrao]

Larsen and Toubro.
...

Glitch #1: Negative Operating Cash Flow for the past three years.

...

And this figure has been negative for LnT for the past three years and burgeoning. It has become serious now.

In 2012 LT had negative Cash From Operations of around 6200 CRORE and in 2013 it was negative 3800 Crore... highest ever in the history of LnT.


Glitch #2: Negative Free Cash Flow

LT has been posting Negative Free Cash Flow for almost a decade! This is a serious weakness. FIIs do not like this at all.


Glitch #3: Enourmous Debt

LT had a debt of 1600 Cr in 2004. Imagine how much debt it has now...........!

A whopping FORTY SEVEN THOUSAND CRORE. This too is highest in history of LT. (In contrast, BHEL has ZERO debt and somewhat of an unpleasant FCF).


Conclusion in next post.

Sir, I did not find that they have -ve Cash Flow, I see -ve FCF though. And their Quick ratio > 1, and their debt is close to 8834.21 Crore.

Am I missing something? Please help.

 

[ARISE]

Janit i liked your choice of stocks ...some midcap stocks for which i would like your opinion are cotton greaves and navneet publications

 

[jamit_05]

Sir, I did not find that they have -ve Cash Flow, I see -ve FCF though. And their Quick ratio > 1, and their debt is close to 8834.21 Crore.

Am I missing something? Please help.

No problem.

Look at the following image. In the circled you will first find the heading of Long Term Borrowings. In the next is the most recent figure of all Long Term Borrowings... its the Burj Khalifa of borrowings : 47000 Crores. Highest in the history of this or any other Indian Eng company.

Next is the Image from the Statement of Consolidated Cash Flows.

In it, the highlighted is the Net Cash from Operating Activities which is coming to a figure of a Negative 3760 for F.Y13 and 6226 for F.Y.12; This should be very discouraging for an alert investor. And FCF is even worse! It saddens me to even type this story.

This will keep getting worse. LT will keep taking in more debt to fill the whole of working capital. It is rising too! Then it will have to struggle to pay off this debt, making the whole organizational output that much more inefficient. Just wait till you see the fall of a giant or atleast when it is down on its knees!

 

[DKALA]

How about datamatics global