Friends: From the latest quarter figures, it looks like IFCI would have an EPS of Rs.10 for year ending March 2010. By that time, the question of merger etc. would be settled and that in itself would give filip to the stock price. Besides, IFCI is holding great capital assets and has great plans (please see Directors` Report) to give impressive earnings. It has weeded out inefficient managers and has taken highly qualified and experienced executives to manage its affairs. It has no NPAs now. Its book value is almost equal to the stock price. The company is fully backed by the Central Govt. Some speculators (whose horizon is intraday) go for uncertain (the price can go either way because of intraday speculation) levels in a day based on charts. Investors should not go for intraday speculations as the price can go against them, but on a 3 to 6 months horizon IFCI can give handsome returns (even Rs.100 is possible). Thereafter, it would be a great upside for the stock. Who wouldn`t be happy with such returns?
While IFCI is available at a P/E of less than 5 now, look at the bloated up P/Es (15, 20, 30, even 40) of many so called big stocks. It is utter foolishness to go for such high P/E stocks. A P/E of 20 or 30 or 40 means that it would take that company that many years (20, 30 or 40 as the case may be) to give the buyer the returns that he expects from investing at such high prices. When we go shopping, everything being equal, don`t we go for a product which is fairly priced or at a discount to the market price of the product? Then why the rush to buy high priced stocks with artificially pumped up P/Es? In a sharp correction, such stocks fall the hardest (remember, 2008, 2001?).
If IFCI declares just Rs.2 dividend (out of the Rs.10 EPS for the current year) the investor would get a dividend yield that is more than a savings account interest. Which other share in the market would give such a yield (4%)?
So friends, have a reasonable time horizon to get your expected results. No company can show results every day to warrant such high fluctuations that is happening each day. The results would be seen at the end of a reasonable period. Good luck to you all.
Everybody have to appreciate ur lengthy mail. I think u took a lot of pain to type this message. Ok. But in stock market there will be a group of stocks which these analysts call high beta stocks. They can move on either ways with or without fundamentals, only basing on news. Generally these high beta stocks will be in top 10 highest volumes. In this group comes stocks like RNRL, IFCI, SUZLON, UNITEC, DLF, etc. These stocks can move either 20% up or down with some news. These stocks r driven purely by operators. For this type of stocks there is nothing to worry. You can buy at any price and u can wait for the target even though if if falls heavily. So if u want buy ifci like stocks buy at any price but in small qty. if it falls average it. then wait for ur target to reach.
One thing u should remember. These r not the stocks meant for investment. These r meant only for trading it may be short term or long term. If u buy this stock and keep for years after raising so many rs again it will come to ur purchase price.
Whenever ther is a growth story there are operators, but when there is a growth story along with fundamentals there are both operators and investors. So high volume high beta stocks are always crowded and highly crowded when there are investors besides operators. Such stocks with fundamentals and potentials for growth cannot remain confined within a certain range of price-movement in the long run. IFCI, now tries hard to go ahead
in the growth-race.
Happy investment with IFCI
Read ad in E.T. IFCI has advertised to sell its huge shareholdins in unlisted cos.Since all these were written off earlier d sale wl b a mega gain for IFCI adding to its profits.Also it has bluechips in its portfolio which can b unlocked now in bull market.
The facts highlighted by this guest is appreciable. boarders like him should write more and more so that small investors who have not got much experience get a fair knowledge how to enhance their wealth instead of loosing it. thank you mr guest.
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