The company has posted net profit of Rs.12.91 crores on increased turnover of Rs.247.69 crores for the quarter. As the equity has increased from Rs.20.65 crores to Rs.28.06 (due to allotment of 74.15 lakh Equity Shares at Rs 40/- per share to promoters on 6th June) the quartely EPS is Rs.4.60 making half yearly EPS of Rs.8.69.
If the NPM is maintained, full years EPS of Rs.17 is achievable.
The best stocks to buy after a market meltdown will be best determined by the price of the stock after the carnage in relation to its assumed realistic price. The stock that appears to have the highest valuation discount amongst a number of fundamentally good stocks are the best buys.
Quite often, momentum stocks like Suzlon, Unitech, Aban Offshore etc. are bought by momentum traders in a steep fall as they suffer the most losses and hence bounceback the maximum in the recovery phase. I am not going to suggest any momentum stocks although I like Aban Offshore (minus its overleveraging), Unitech (it may remain an underperformer) and Suzlon (it is not to be touched by even a bargepole till it shows any semblance of profit. In fact, if it continues its present performance, its annual losses will be FIVE TIMES its equity). Luckily for myself, I am not a momentum investor or a day-tader (I consider that the main reason for making profits from stock market investing) .
Next, I do not invest in for 3 months, in fact, nothing less than a year. Let me share the concept I have realised about stock market investing from more than two decades of investing.
When you invest in stocks, think that the promoter of the company is asking you to invest money in return of shares of the company. You assess the company, find that its promoters are experienced in the field and are capable and dynamic, the sector is likely to perform well and the business has good demand and is likely to give good returns. So you become part owner of the company. When you invest in a company, it should be with the feeling that `I don`t mind being a partner in this company and I am so impressed by it that I can even bet my money on it`. If such is the case, then I am sure you can never invest in a share for just three months. You will agree that you have to give a company at least a year to perform.
Next, even while you invest in a company for at least a year, do keep taking your profits out in case the share price rises abnormally fast. And such money that you keep taking out, should ideally not be invested back in shares. Try to plough it out into fixed deposits, income schemes of mutual funds, real estate or just spend it all up the way you like. Money made in stocks should ideally not be invested back in stocks. However, if you are a hard core stock addict, you can get back to buying your favourite stocks, but only in a mindless, sharp correction that amazes everyone like the present one. The fact that like rains, they do come every few months - just that you need to wait patiently for a few months for them.
Next, if you have been investing in stocks for many years by now, check out honestly if you are actually making money in stocks and outperforming the indices.If you seem not to do even as good as the Sensex or Nifty, it is best that you invest in stocks through a good mutual fund. The time and effort that you save by not directly investing in stocks can be best used to undertake your hobbies, listening to music or anything else that you feel like doing.
Why I say so is because you got to be investing directly in stocks as much for the learning it provides by reading about companies and businesses as for the profits you plan to make. Only if you adopt such an attitude will you do your own research and reading before you buy each share and try to be your own master rather than invest purely because someone else suggested you to do so.
If you find substance in what I said ( I don`t insist that you agree with me fully, but even in parts is fine) you can ask me for some long term ideas worth investing in.
Dear PRJ,
Your inputs are most educative to many people like me. In these uncertain times, there could be some opportunity to recast the portfolio. Good and bad all shares are fallen. Why not exit weaker stocks and enter fundamentally strong stocks with a 18 month perspective? In doing this, I need your valuable guidance. I have 3600 R Com @ 405. There appears a hazy future. If I have to exit this stock, can you suggest any stocks which can at last partially compensate the loss. After your guidance, last time, I purchased 1000 Century Enka @195. If the company reports even Rs.55 EPS, it should go beyond 300.
After the recent results, what stocks should be purchased for long term? Waiting for your kind reply.
The results for H1 FY 10 is a significant improvement from last year. With half year EPS of 8.7, at a price of 50 the company is trading at 2.87 P/E. The book value of the stock is also good. The public holding is only 165 and the rest is held by promoters, institutions and corporate. More importantly the company is able to achieve top line growth. The debt levels are high but with improved cash flows, it is expected to comdown as on March 31, 2010. With all the good fundamentals the stock continues to under perform. I see a lot of value in this stock and in my opinion the stock has definetley more upside potential than downside.
dear PRJ
thanks for the detailed reply on stock investing. it has really changed my mindset and now i am not afraid to invest for the longterm. its true, if you plant a sapling you have to give it time to grow into a tree. please recomend a few good stocks for which i shall be thankfull to you. Take care.
| NIFTY 
