At CMP of Rs. 557 the company commands a market cap of Rs. 14,900 crores and is available at a PE multiple of 9.6, which is on the lower side both on absolute and relative terms.
52 week High / low for the stock is 1224 / 492.
What is Intrinsic Value? The Security Analysis book by Benjamin Graham explains the concept of Intrinsic value and its application in selecting the stocks. Following is a video to demonstrate concept of intrinsic value:
For fiscal year 2011, the IT industry has given yet another supernormal wage hikes across all employee levels, thanks to improved demand outlook in US and increased competition in attracting talents.
IT biggies like TCS, Cognizant has given average wage hikes of more than 14-15%. Beside that, the salary level at which freshers and resources with experience range of 1-3 years were being hired has also gone up. Above that the bigger players like TCS, Infosys, Cognizant, Wipro, IBM, Accenture etc have been doing record hiring in the current fiscal and have got ambitious targets for the next fiscal as well.
All these cost push will hurt bottom lines of these companies in the fiscal year 2012. Smaller sized IT companies will suffer the most as they are not witnessing volume growth similar to bigger companies but their wage increases have been even more than their bigger counterparts.
Bigger IT companies like TCS & Infosys are trading at higher multiples which might contract going forward because of above concern, hence they can be avoided untill they correct to levels where they start looking attractive in terms of forward year multiples.
A forward year PE of 16-18 for Infosys and TCS would be good level to start buliding position.
Midcap IT companies are already trading at depressed multiples and they will continue to do so because of higher margin pressure that they will witness in FY-12. Here in this case much of a price correction is not expected but rather time correction will happen. Hence fresh investment can be looked into some of the high quality midcaps like NIIT Tech, Zensar, KPIT Cummins, Hexaware after a period of 6 months.
Market correction has brought many A group stocks to 52 Week low. The botttom up investors can selectively start looking at some of the quality names as they have come down to year low levels. Below is the list of A group stocks which hit new 52 week low as on 25th May 2011.
|New Low||52 Week High||Mkt Cap|
|Indiabulls real estate||105||150.4||4238|
|Copyright - InvestorZclub|
Dividend Discount Model is used by investors to ascertain the today's value of the company based on the future dividends paid by the company. It is a conservative method to value stocks and hence provide high degree of reliability.
We can use this model to calculate the price at which one can buy the stock in order to acheive his/her desired rate of return.
Income from operations declined to Rs 5,145 crore from Rs 5,481 crore in the same year-ago period.
Voltas witnessed sharp upmove of more than 6% on 20th May with very high volumes of approximately 3.9 million shares that changed hands on BSE and NSE together.
On the derivatives side the voltas futures saw cut in open interest of 18% which clearly suggests the short covering in the counter.
Voltas has been on steady downtrend since Nov 2010 and has fallen from the level of Rs.260 to Rs.162 in matter of 6 months. Technically the stock has taken support at Rs. 150 - Rs. 152 range and has bounced back twice from such levels in the past 3 months.
InvestorZclub believes that because of huge shorts that got piled up in the counter during this month the traders with short positions might rush for cover before expiry and hence the stock might rise a little bit more from the current levels. Short term Traders can buy the stock at current levels of Rs 162 for a target of Rs 170 in 3 to 4 trading sessions, keeping a strict stop loss at Rs. 159.
- Technical analysis is the study of stock price behavior by analyzing its chart.
- Technical analysis is done to uncover trends in stock and the Markets in general.
- Technical analysis helps in taking advantage of trends. With this the investors have the opportunity to
Jet Airways posted a consolidated net loss of Rs 86 crore, a vast improvement over Rs 420 crore loss posted a year ago.
Total income of the company increased 20.34% to Rs 14,726.98 crore for the quarter under review from Rs 12,238.06 crore.
Airline stocks in India has been severly underperforming because of rising crude prices. Tough environemnt since past 3 years has made Indian airline companies much more efficient and competitive. Bigger companies such as Jet Airways, Indigo and Kingfisher Airlines have been constantly increasing their revenues and market share. If crude prices come down Jet Airways might give phenomenal return from the current levels as the stock price of the company has fallen substantially from their recent peaks and has been trading at significant discount to its asset/intrinsic value.
Some key metric for Jet Airways is given below:
CMP as on 19th May 2011 - Rs. 458
52 Week High / Low - 926 / 392
Market Cap - Rs. 3954 Crores
Market Cap / Sale - 0.27
Jet Airways Total no of fleets in Operation is 97 while orders for additional 41 fleets have already been placed.
Telecom Operators market share in India as on April 2011 remained almost same as that March 2011. Together the GSM operators added 11 million customers in April 2011.
Bharti Airtel added 2.41 Million customers while vodafone added 2.40 Million customers. Idea cellular however cornered most number of GSM subscribers with the addition of 2.45 Million new subscribers.
Aircel added 1.1 Million customers while BSNL added 6.8 lakh subscribers.
BSE A group stocks that hit fresh 52 week low as on 19th May 2011
|Company||New Low||52 Week High||Mkt Cap|
|Central Bank of India||118.85||190.53||7720|
|Copyright - InvestorZclub|
Contra investors hunt for good quality stocks during unfavourable times. The above list might be helpful for such investors.
Warren Buffet Investment Quotes and Criteria:
Goldman Sachs upgraded JSW Steel to 'buy' from 'neutral' as the recent price correction in the stock has improved its risk-reward ratio. The investment bank kept the price target unchanged at 1,343 rupees.
The stock has corrected 20 percent since November, Goldman Sachs said the stock is trading at a discount to its peers on both earnings and book-based multiples. The company will be in the best position to capitalize on a recovery in steel pricing, the investment bank added.
CMP of JSW Steel as on 17th May was 920. The target price set by the investment bank suggest a return of around 46% from the current levels.
SBI reports dismal Q4 results on account of higher provisioning. Fourth Quarter profit is down almost 99% to Rs 21 Crore vs the expectation of Rs 2963 crores, on higher provisioning.
The Bank has made a provision of Rs 4157 crore versus Rs 2349 crore a year ago.
Following the worse-than-expected results, shares of SBI plunged more than 7% to Rs 2,416 on the NSE.
Coal India overtakes ONGC to become the most valuable PSU of India. The Market Cap of CIL (Rs 2.5 Lakh Crore) has crossed the Market Cap of ONGC (Rs 2.4 Lakh Crore) and is behind the Reliance (Rs. 3.03 Lakh Crore) by few thousand crores only.
Coal India has acheived this position within just 6 months of listing. It came out with an IPO in October 2010 at a price of Rs 245 per share. The current Market price of CIL as on 17th May 2011 is Rs. 398 and has hit fresh 52 Week high today.
ONGC stock came under severe pressure on the rumors of increased subsidy burden that the company might have to share because of large underrecoveries of oil refining companies.
Upstream oil companies like ONGC, OIL India might have to share 38.5% of the total subsidy burden of approx Rs. 78,000 crores for FY-11.
ONGC is down more than 5% today and is majorly responsible for the weak markets today. If government finalizes this decision then the FPO of ONGC will also be affected.
- Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business.
- Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
- Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.
JSW Steel has come out with its FY11 numbers and the company has registered net sales of Rs 23,900 crore versus Rs 18,957 crore. Net profit of the company during the period stands at Rs 1754 crore versus Rs 1597 crore.
The current market price of the company is Rs. 926 and is trading at a PE multiple of 11.80.
52 week High/low for the stock is 1400 / 752.
Three year return from the stock as on 16th May 2011 is -3%.
Suzlon Energy reported profits in the fourth quarter of FY-11 giving some hopes to the investors that the worst for the company is probably over.
For the three months ended March 31, Suzlon posted a consolidated net profit of Rs 431.59 crore as compared to a net loss of Rs 188.47 crore in the corresponding period last year.
On yearly basis, its net loss increased to Rs 1,103.43 crore in FY 11 from the previous financial year’s Rs 982.56 crore.
Suzlon Energy is targeting to increase its total revenue by around 44% to Rs. 26,000 crores, and EBIT of around Rs. 2000 crores.
Mobile Number Poratbility in India did not had huge impact on the fortunes of the Telecom Companies but some players faired well while some performed badly. Following are the gainers and losers of the MNP game till April 2011.
# Vodafone is the biggest MNP gainer with a net gain of 5,13,259 consumers.
# Bharti is the second biggest MNP gainer with a net gain of 5,06,828 consumers
# Idea was third with a net gain of 4,70,986.
# RCom is the biggest MNP loser, with a combined net loss of 10,70,747 users,
# State-run BSNL lost almost 4,09,028 users
Note: The data as per GSM body Cellular Operators Association of India (COAI) data, as of April 28.
High Dividend Yield Stocks in India as on May 2011. The list comprises of stocks yielding close to 5% or more.
|MktCap||CMP||FV||EPS||PE||Div Latest |
|Div 1 Year Before %||Div Yield|
Steep hike in Petrol prices, to the extent of more than Rs 5 per litre, is definitely going to impact the auto sector growth going forward. The four wheeler segment is expected to feel the maximum brunt in terms of volume growth.
Higher interest cost and rising raw material prices have already been playing spoil sport on the growth and profitability of auto companies and now this steep hike in petrol price has added salt to the wounds of the auto sector.
Stocks of Maruti Suzuki & Tata motors are expected to be under lot of pressure when the markets open on Monday. Fresh investment in this sector should be avoided at this point of time.
Power Finance Corporation fixed the price for its follow-on public offer at Rs 203 per share, at the upper end of the price band , raising about Rs 4,650 crore through the issue.The retail investors and employees are given a discount of 5 per cent.
The follow-on public offer (FPO) of the public sector firm was oversubscribed by 4.32 times. The navratna public sector undertaking received bids for 99.12 crore shares as against 22.96 crore shares on offer.
Earlier, the price band for the offer had been fixed at Rs 193-203 per share. The FPO began on May 10. The offer comprised issue of about 172,165,005 fresh equity and sale of around 57,388,335 shares by the government, which has 89 per cent stake in the company.The company plans to use the proceeds to mainly boost its capital base.