Stocks for the long and short term portfolio
- Thread starter jamit_05
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A silent gem.
This company is performing poorly due to poor economic conditions, but its structure is rock solid. Has no debt, decent profit margins.
Currently, its EPS is at 10 year low. Therefore, share price will crash in the next downfall of nifty, giving a good opportunity to buy at 2004 Lows.
The scrip is Maharashtra Seamless. It is of Jindal Group and is an old company.
It is not exactly a growth stock, therefore we want to buy it a strong bargain.
At 2004 lows of Rs.65, this stock is nearly risk-free, with ceiling at around Rs.650.... scope for 10 times growth in the next economic upcycle. It is customary for it to give a dividend of around Rs.5 per share. At Rs.65 of purchase price, ones investment will start beating FDs from the very start.
One sign of a level-headed management is that MahaSeam has posted a positive cash flow even in an environment of falling EPS. Meaning, business is bad, yet it is being managed well... there isn't an ego-driven maniac at the helm of affairs...
@garg, thx for the greeting. Wishing the same to you.
This company is performing poorly due to poor economic conditions, but its structure is rock solid. Has no debt, decent profit margins.
Currently, its EPS is at 10 year low. Therefore, share price will crash in the next downfall of nifty, giving a good opportunity to buy at 2004 Lows.
The scrip is Maharashtra Seamless. It is of Jindal Group and is an old company.
It is not exactly a growth stock, therefore we want to buy it a strong bargain.
At 2004 lows of Rs.65, this stock is nearly risk-free, with ceiling at around Rs.650.... scope for 10 times growth in the next economic upcycle. It is customary for it to give a dividend of around Rs.5 per share. At Rs.65 of purchase price, ones investment will start beating FDs from the very start.
One sign of a level-headed management is that MahaSeam has posted a positive cash flow even in an environment of falling EPS. Meaning, business is bad, yet it is being managed well... there isn't an ego-driven maniac at the helm of affairs...
@garg, thx for the greeting. Wishing the same to you.
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Another STRONG candidate for long term investment has come to light. )It seems I have pretty much figured out what kind of companies I want 
This Entity is managing its business wonderfully. The sector is not particularly spectacular, but the management is wise. I say that because, it is consistently increasing its fixed assets size, year after year. Hence, increasing sales revenue. Here comes the best part, all of this is happening without taking on any debt. Yes, it has zero debt! As a result it is able to maintain net profit above 10% and give dividends on a regular basis (which I wish they wouldn't).
Its Sales and production scheme Its inventory days is less than 50 and maintained. This is an important benchmark, else I'd assume sales and production teams are out of synch, which can be dangerous as it would cause them to have an ever increasing need for working capital.
Its debtor days are less than 10! Means it has a strong goodwill component.
And finally, it has always (yes, always) had positive free cash flow. Meaning, the management is wise enough to invest in expansion
This is the perfect kind of business. I will spend sometime trying to understand its product-line, if it is simple and a need of the common man then even better.
I give Swaraj Engines 4 out of 5 stars.
Now, coming to the important aspect of buying price.
It appears, buying near 350 would be a safe bet. However, it is a mid sized company and is likely to give a strong swings and one such down-swing is expected to reach as low as Rs.280.
This Entity is managing its business wonderfully. The sector is not particularly spectacular, but the management is wise. I say that because, it is consistently increasing its fixed assets size, year after year. Hence, increasing sales revenue. Here comes the best part, all of this is happening without taking on any debt. Yes, it has zero debt! As a result it is able to maintain net profit above 10% and give dividends on a regular basis (which I wish they wouldn't).
Its Sales and production scheme Its inventory days is less than 50 and maintained. This is an important benchmark, else I'd assume sales and production teams are out of synch, which can be dangerous as it would cause them to have an ever increasing need for working capital.
Its debtor days are less than 10! Means it has a strong goodwill component.
And finally, it has always (yes, always) had positive free cash flow. Meaning, the management is wise enough to invest in expansion
This is the perfect kind of business. I will spend sometime trying to understand its product-line, if it is simple and a need of the common man then even better.
I give Swaraj Engines 4 out of 5 stars.
Now, coming to the important aspect of buying price.
It appears, buying near 350 would be a safe bet. However, it is a mid sized company and is likely to give a strong swings and one such down-swing is expected to reach as low as Rs.280.
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Hi Jamit,
Maharashtra Seamless has a excellent balance sheet. Good Cash flow. Good Corporate
Governance, Dividend paying company.
They manufacture seamless steel pipes and exports 40% to UAE and US.
On Around Nov 2012, the share price was Rs 345/- and CMP Rs 164.50
The lowest it went in one year was Rs 153/-
Sales are down, hence prices are down.
From here on it will go up....should reach Rs 225/- after these quarter results easily.
To expect a price of Rs 65/- would be expecting too toooo much.
This is a bargain price and very much worth investing in the long term.
Regards,
Mahesh Asrani.
Maharashtra Seamless has a excellent balance sheet. Good Cash flow. Good Corporate
Governance, Dividend paying company.
They manufacture seamless steel pipes and exports 40% to UAE and US.
On Around Nov 2012, the share price was Rs 345/- and CMP Rs 164.50
The lowest it went in one year was Rs 153/-
Sales are down, hence prices are down.
From here on it will go up....should reach Rs 225/- after these quarter results easily.
To expect a price of Rs 65/- would be expecting too toooo much.
This is a bargain price and very much worth investing in the long term.
Regards,
Mahesh Asrani.
Another STRONG candidate for long term investment has come to light. )It seems I have pretty much figured out what kind of companies I want
This Entity is managing its business wonderfully. The sector is not particularly spectacular, but the management is wise. I say that because, it is consistently increasing its fixed assets size, year after year. Hence, increasing sales revenue. Here comes the best part, all of this is happening without taking on any debt. Yes, it has zero debt! As a result it is able to maintain net profit above 10% and give dividends on a regular basis (which I wish they wouldn't).
Its Sales and production scheme Its inventory days is less than 50 and maintained. This is an important benchmark, else I'd assume sales and production teams are out of synch, which can be dangerous as it would cause them to have an ever increasing need for working capital.
Its debtor days are less than 10! Means it has a strong goodwill component.
And finally, it has always (yes, always) had positive free cash flow. Meaning, the management is wise enough to invest in expansion
This is the perfect kind of business. I will spend sometime trying to understand its product-line, if it is simple and a need of the common man then even better.
I give Swaraj Engines 4 out of 5 stars.
Now, coming to the important aspect of buying price.
It appears, buying near 350 would be a safe bet. However, it is a mid sized company and is likely to give a strong swings and one such down-swing is expected to reach as low as Rs.280.
This Entity is managing its business wonderfully. The sector is not particularly spectacular, but the management is wise. I say that because, it is consistently increasing its fixed assets size, year after year. Hence, increasing sales revenue. Here comes the best part, all of this is happening without taking on any debt. Yes, it has zero debt! As a result it is able to maintain net profit above 10% and give dividends on a regular basis (which I wish they wouldn't).
Its Sales and production scheme Its inventory days is less than 50 and maintained. This is an important benchmark, else I'd assume sales and production teams are out of synch, which can be dangerous as it would cause them to have an ever increasing need for working capital.
Its debtor days are less than 10! Means it has a strong goodwill component.
And finally, it has always (yes, always) had positive free cash flow. Meaning, the management is wise enough to invest in expansion
This is the perfect kind of business. I will spend sometime trying to understand its product-line, if it is simple and a need of the common man then even better.
I give Swaraj Engines 4 out of 5 stars.
Now, coming to the important aspect of buying price.
It appears, buying near 350 would be a safe bet. However, it is a mid sized company and is likely to give a strong swings and one such down-swing is expected to reach as low as Rs.280.
Jamit, I have a long reply due to you on some points raised by you to an old post of mine. Had overlooked it. Promise to do it this weekend.
The first step is to look for good companies. Then it is a matter of price. So, I will ask you to agree or disagree about swaraj being a good stock. If you agree then most of the work is done! Then comes the issue of price.
So, lets reason a little.
2009 ended with EPS of 17 and now EPS is near 50, a three times growth.
2009 ended with Share price at around 100. Therefore, Rs.300 is now a fair price. My entry price is above 2010 lows, which is near-by.
Lets reason a little.
Nifty rushed from lows of 5200 to ATH, around 20%. And how well did the stock perform? Abysmally. Meaning, big investors are still not warmed upto to this stock. In fact, they are using every rally to get out. Hence, in the next down leg of Nifty, this stock is going to be hammered. And logically so, because of poor performance due to intense competition from China.
There are many such well managed companies that will correct at least 50% in the next crash... just list them out... some you will get some you won't. But, be sure, that ones you get are awesome bargains.
Nifty rushed from lows of 5200 to ATH, around 20%. And how well did the stock perform? Abysmally. Meaning, big investors are still not warmed upto to this stock. In fact, they are using every rally to get out. Hence, in the next down leg of Nifty, this stock is going to be hammered. And logically so, because of poor performance due to intense competition from China.
There are many such well managed companies that will correct at least 50% in the next crash... just list them out... some you will get some you won't. But, be sure, that ones you get are awesome bargains.
Maheshji,
I intend to be the kind of investor that buys ONLY in sharp corrections, like we saw in 2008. In such times mid and small sized companies get hammered severely. No support is good enough. They freefall. Fundamentals take a back seat. That freefall is a good time to break FDs.
I too was of a similar opinion as yourself. But, after a seasoned investor with experience of a few decades told me to just wait and watch and let the "mandi" settle in. This was when BHEL was around 350 and I was eager to buy. And all valuation models gave a go ahead.
Who would have thought a Navratna like Bhel would break right through 2008 LOWS and then 2006 LOWS and reach RS.100.... I mean if BHEL can then Mahaseam should have no problem.
Rgds.
I intend to be the kind of investor that buys ONLY in sharp corrections, like we saw in 2008. In such times mid and small sized companies get hammered severely. No support is good enough. They freefall. Fundamentals take a back seat. That freefall is a good time to break FDs.
I too was of a similar opinion as yourself. But, after a seasoned investor with experience of a few decades told me to just wait and watch and let the "mandi" settle in. This was when BHEL was around 350 and I was eager to buy. And all valuation models gave a go ahead.
Who would have thought a Navratna like Bhel would break right through 2008 LOWS and then 2006 LOWS and reach RS.100.... I mean if BHEL can then Mahaseam should have no problem.
Rgds.
Excellent stock! Go for it! I took some position at around 300 thinking that i will keep buying at lower prices, but I am not so sure about getting lower prices mpw. This stock although little costly on valuation is very strong fundamentally. The reason it has been trading at premium valuation is its fundamentals.
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