Monday, 28 March 2016

Review 3.0 and Update About The Blog

Review 3.0
This post is a periodic review about all the stocks discussed on the blog.


Average return per stock at peak is around 125.40% and Average return per stock at CMP is 31.97%
This has been clocked from Oct 2014 till now in March 2016.

As for last update Review 2.0 on start of January 2016 the average return at cmp was 92.93%.
On this day the average return at cmp has crashed to 31.95%, Maybe because the euphoric small/mid cap bull market is over.

As i have posted on the blog many a times and followed that once a stock goes up by 60-70% trimming the holding to only free shares is safe and then taking a call when to book out fully would depend on industry/market trends.

Out of 23 Stocks 11 stocks went above 60%, meaning only free shares are left in SKM EGG, NGL, MINDTECK, VIDHI, SHILP GRAVURES, WATERBASE, PALRED, PINCON, AXISCADES, CAMPHOR and SAKSOFT.. Many of these stocks have multiplied much above initial 60% upside.
These 11 stocks rallied 234% on an average from discussed levels.

Out of 23 stocks discussed 12 stocks failed to go above 60% from price it was discussed.
That means full quantities of DYNEMIC, GUJ AUTO, RICHA IND, NARMADA GELATINE, PARNAX, SUNTECK, TALWALKARS, SMRUTHI ORGANICS, INDIAN TERRAIN, ARROW TEXTILES, ASSOCIATED ALCOHOL and A M D are still held on. 
These 12 stocks on an average are down: 23.52% from discussed levels.

The last 3 stocks discussed Arrow Textiles, Associated Alcohol and A M D have turned out to be bad.

It is true that investment wise, few weeks or months are not enough to judge a stocks performance.
But one cannot deny the fact that two (A M D , ARROW) out of last three stocks have been disastrous.

I can sense a discontent among readers about the last three stocks, Its like everyone was expecting a TENDULKAR but they turned out to be AFRIDI.

I am also disappointed about these three stocks, Not much for Associated but for Arrow and A M D.

Looking at the discontent, it is obvious the blog is loosing its charm.

Owing to this scenario we asked for suggestions from readers and received some very good suggestions.

We are implementing most suggestions of it from today: No more stock specific discussions every month unless something very special, no prior announcements of write-ups coming up, no posts during the market hours, new blog posts if at all about any stock to be posted only on weekends, Companies under 250 crore Market Cap would be ignored.

Tuesday, 22 March 2016

Suggestions For The Blog

Dear Readers,

To improve the blog i am keen to have your suggestions.

Suggestions which will make this blog more useful for investors.

Please email your suggestions on theaceinvestor@gmail.com.

I am also looking for co-authors who can contribute to the blog in a meaningful way.

Kindly send your profile too and how can you contribute to the blog.

All The Best!!!

AMD Industries Ltd - Value Pick


The Ace Investor
Amd Industries Ltd
  Listed on both NSE: AMDIND & BSE: 532828
Currently trading around 39-40 with a market cap of around 70 crores.
Promoters hold 66.76% stake.
It has a Debt of around 78 crores.
Total Reserves are around 102 crores.

Established in 1958 Amd Industries Ltd has emerged as one of the prominent packaging players in the industry, providing packaging solutions to some of the biggest brands and companies in the beverage, liquor and processed food categories.

AMD is headed by executive chairman Mr H S Gupta and Mr Adit Gupta is the M.D.

The company's key products are: Pet Preforms (Bottles), Bottle Caps and Crown Caps.



Around 38% of the business is Crown Caps, 34% is Pet Bottles and 20% is for the Bottle Caps (CSD Closures)

The company is headquartered in New Delhi and it has its manufacturing facilities UP, Rajasthan and the company in order to cater to Coca Cola's increasing demand has started to set up another facility in West Bengal.


The company a month back has also set up four new lines of machines at Rajasthan having a capacity of manufacturing 25,000 PET bottles and 22,000 jars in a day.

Earlier, The company's Rajasthan plant was mainly for manufacturing Crown Caps.

Some of the key clients for the company are: Coca Cola, Pepsi, Hindustan Unilever, Foster, United Breweries, SAB Miller and Dabur.

The company was earlier named as AMD MetPlast and came with its IPO back in 2007 with an issue price of 75 Rs Per share.

Let's take a look at the financials of the company :-

The company right from 2007 till now has never reported an loss for its annual results, and right from 2007 till date the company has paid dividend every year to its shareholders even on years when its bottom line was hit.

From the above table it looks like company is running at full capacity utilization and that is why there hasn't been any revenue growth. But with recent capacity expansion in Rajasthan and the new facility in West Bengal the company should be showing really good growth going forward from here.

Due to the crude price crash, AMD Industries like other packaging and plastic companies will be benefited.

For full year FY16 the topline with just few days left in the FY the top line is expected around 176 crores and the bottom-line is expected at just under 7 crores and the EPS should be at 3.6.

On an EPS of 3.6 at current price of 39 the stock is trading around an P/E of 10.80.

Other packaging names like Hitech Plast which became highlighted due to its client Patanjali's challenge to MNCs is trading at 25 p/e and the same is with other packaging names.

Tin, Plastic, Glass are some of the main and conventional options for Beverage packaging.

While AMD is into plastic, to compare it with someone in the industry we can take a look at Haldyn Glass listed on the BSE and trading at around 30 which has witnessed no growth in the last 6 years but still commanding a p/e of 20 currently that too after it has crashed significantly.

Haldyn at its peak of around 44 was enjoying a p/e of 30+.

Applying a P/E of 20 would give AMD a stock price of 72. This ofcourse is as per FY16 and growth yet to come which should make its EPS much better in the future though.

We have often seen that companies like AMD Industries which lie low due to lack of growth spurt to good heights due to the growth triggers and for AMD the capacity expansion as well as the new facility should felicitate good growth for the company.

The young population of India the catchy promotional campaigns all help the demand of brewed drinks which have slowed off late though.

All in All, I feel Amd Industries is a good business and a value pick at current valuations for Investors.

Apart from fundamentals, Technically AMD has broken out of CUP & HANDLE pattern on the daily charts on back of good volumes.





Note: The above is not a research report but information as available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that i might have Amd Industries Ltd in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.

:Links:


Friday, 11 March 2016

Who Killed Kingfisher? (A different take)

(Source: Nanjunda Pratap Palecanda)

Who Killed Kingfisher ?

Everybody, most of my learned friends want Vijay Mallya arrested. They say he had fun at the cost of Public Money, he should be punished. They say he is a fraud, he lives a rich  and Luxurious life, while not paying salaries to his staff and not paying his lenders and vendors.
Who killed King Fisher Airlines? Have you given a thought? As a citizen of India you should know. As an entrepreneur you should definitely know this. I am sharing below a sequence of media reports from the days of the fall of KingFisher Airlines began. I hope to construct the sequence right, so that you can understand how it was killed. and by whom.. A little, backdrop would be, if you recall, or perhaps can google to verify my statement, Most Airlines across the world were doing bad those days. Many were in the verge of collapse. 

You may note Jet Airways stocks had plunged around the same time in Jan 2012..

 
You May notice, Kingfisher was doing better than Jet Airways.

Kingfisher  desperately had to infuse funds and this was the best thing Vijay Mallya and his team could have done. 
 
 It was very well placed,
But what went wrong? 

It appeared to be a done deal,
what went wrong?
Not just me, everybody seem to think / say so.. then..
It was obviously not similar thoughts towards Jet Airways.. then.. what went wrong?
 Same SBI had hopes on Kingfisher Airlines..
then..

This is the beginning..
  
 Government agency thinks contrary to Market and Banks... why?
Kingfisher Airlines team does, what any serious enterprise does..

 Why is Kingfisher targeted, while all Indian Airlines were in similar situation then?

Why stop an Airlines from flying? 
How will an enterprise pay salaries, when agency meant to support the player is keeping it away from raising funds..
Does this help you understand better, what happened?

Its important to understand the share holder details of Jet, particularly, foriegn and Indian Share holders.
Please note Naresh Goyal is not an Indian National.
Note the percentage of General Public & Foriegn promoters as share holders in Kingfisher 

Note the general public in Jet Airways and also  foreign promoters 
 
Etihad was still interested in Kingfisher and not Jet Airways..
 
Kingfisher tried things Legally, but what was at play??

Why every possible government machinery tried to scutle Kingfisher Airlines?

Is this the final nail..??

Etihad comes around and agrees to go with Jet Airways.. 
Anad Sharma was the Commerce Minister..

Then met Finance Minister.. 
Why, all this to help a company held by majority of  foreign promoters?

Why was Indian Government stretching to do this for Jet Airways, while Squeezing Kingfisher Airlines?

This was perhaps the last nail but we know, what else is happening with the (Once) King of Good times..
Who killed Kingfisher Airlines? Who got Vijay Malaya to this state? Who were the beneficiaries? Can an Indian Entrepreneur dare to do things in his own Country again? Will Indian government support her/him, or lead to what happened to Kingfisher Airlines and Vijay Mallya?
I have never had Kingfisher Airlines or any of Vijay Mallya's company shares. I have neither been his Associate nor employee. I am writing this to share with my learned friends, this is the truth I saw. I feel bad for Kingfisher Airlines and Vijay Mallya as an entrepreneur. I don't want such a thing to happen to any entrepreneur.
DISCLAIMER: This post is not an endorsement of the article published by Najunda Pratap Palecanda but as a different take we found it post-worthy.