Retail traders always tend to decide on the partial information they get on various platforms. He is another such discussion going on on social media about Ambani family acquiring Reliance Industries stocks through bulk and block deals. Look at this screenshot being widely circulated on Twitter and telegram channels:
It is obvious to get tempted to buy such stocks where the promoters themselves buy the stock.
Hold on, let us find out who is selling the stock? Here is another screenshot from BSE website.
Who is this Devarshi commercial LLP? It is a partnership firm of its own family. The family is not buying from outside, they are reshuffling their holding within the promoter's group.
The company's BSE filing states that "the Acquirers and sellers are part of the promoter and promoter group. The aggregate shareholding of the
promoter and promoter group prior to the aforesaid transfer and after the aforesaid transfer has remained
unchanged."
Decide your trades based on the facts, not the tweets.
"This Porinju bet rallies 20% in 5 sessions" A news alerts flashes on your mobile phone.
Many small investors give more importance to noise created by some famous people like Porinju than the underneath values. We feel we are left behind in the rally. We create a buy order. That gets cancelled as the stock hits upper circuit. Media gives more hype. Porinju tweets the followers giving the hints. The bloggers like me interpret in our own capacities. Porinju gets a good publicity for his Portfolio Management service. That is what he needs and he gets.
ET Market: News on D S Kulkarni developers hitting new highs after Porinju buys
One fine day you will end up buying at very price believing Porinju and his team's extraordinary work. We never bother to study the stock. We don't even do a google search about the company.
After a day or two, you forgot that you had bought that stock. Even media will forget or they act so. There is no news about this stock. Because they don't tell when Porinju's stock pick fails. Only very few journalists like Sucheta Dalal dare to question such companies.
News articles describing the trouble with D S Kulkarni Developers.
Once the noise settles, Mr Market takes the control. The stock gets the fair value. This is what happened to one such stock now.
D S Kulkarni Developers chart from Money Control
It is always better to do our own studies before buying the stocks. We don't even know whether Porinju's PMS still holds the stock or sold it when the retail investor started buying it. Small investors should always avoid following such ace stock pickers. They will never tell you when to sell the stock.
Whenever I heard Tata Motors, I used to picturize the Tata Indica hatchbacks. No other vehicles including Nano come into my mind when some one says the name Tata Motors. That is the legacy of Tata Indica. That is also the tragedy of Tata Motors. They did not have any other cars to offer. They utterly failed to understand the changing mindset of the Indian customers, when the other car makers were launching hundreds of new vehicles. This was not just the story of Tata cars, they did not do well also in commercial and passenger vehicle segments.
It seems like Tatas have understood that neither Indica nor Nano will work with changing mindset of the Indian customers. They have also acknowledged the fact that they need to shift the gear to grow in commercial and passenger vehicle segments. Turning around the Tata motors is the need of the hour and one of the prioritized task as per the Tata group Chairman N Chandrasekaran.
'Fortune' says Tata Motors aims to bring the turnaround in domestic business by 2019. The company is busy in restructuring the product portfolio, supply chain and organization structure to improve the quality, productivity, and cost effectiveness.
Tata motors is investing Rs 4000 crore in this financial year 2017-18 to bring new commercial and passenger vehicles. With the new products, Tata Motors is planning to capture the market for the turnaround story.
Tata Motors CEO Guenter Butschek says the company will invest Rs1,500 crore into commercial vehicle business to regain lost ground and return to profitability this financial year. as a part of this strategy, they have shelved the manufacturing of the Tamo Racemo sports car. They are also putting a break on TaMo subdivision to cut the cost and focus on performing models. They are reviewing their projects every month to confirm the suitability of the project.
Many cars from Tata motors are lined up for the launch in this financial year. Nexon, Tiago Sports, Tigor Amt, X451, Q 501 Suv to name a few. They are planning to launch three to four new vehicle every year in coming days.
Amid these turnaround efforts of the company, the scrip was quoting at Rs 373 on today 22/08/2017, just Rs 16 above its 52 weeks low of Rs 357 in Indian bourses and Tata Motors Limited- ADR (NYSE:TTM) was quoting USD 29, near its year low (USD 28.97) at Nasdaq.
CESC- Calcutta Electricity Supply Company, a RP Goenka group company is involved in multiple business apart from power production and supply. The company head quartered in Victoria House, Kolkota is having 4 thermal power plants, also entered into solar and wind power generation in Gujarat and Rajasthan and hydro power in Arunachal Pradesh. They supply electricity in cities of West Bengal, Rajasthan and also in Noida. They are also into retail business in the name of Spencer's retail. The other ventures of the CESC include the listed BPO company Firstsource Solutions. Now the company plans to restructure the business into four listed companies to unlock the value of each business.
CESC demerger plan and number of shares of demerger entity investor gets
How many shares of demerged entities will the CESC investors get?
For every 10 share of the parent CESC, the investors will get
5 Share of CESC of book value Rs 10
5 Shares of CESC Power Generation Company of book value Rs 10
6 Shares of Spencer's Retail of book value Rs 6 and
2 shares of CESC Ventures of book value Rs 10
How the demerger the business unlocks the value of the company?
Many companies do business in different industries. The value of the company should be sum of all the business in different together. It is not true in many cases. Some of the business could be making profits and some might be in loss. The loss making business could be eating the profit made by the other business. The negative trend in one of the industry could be affecting the valuation of the entire company without taking into consideration of the other business. The debt, ratings business potentials could be actually valued only when the business in different industries are analysed differently. In normal course the demerger could benefit the investors. It could also backfire if the demerger is just the gimmick to increase the valuation.
When will be CESC demerged and get listed?
CESC has announced the date for demerger as 1st October 2017. The listing of the demerged companies likely to happen in the last quarter of this financial year, most probably by January 2018.
Motilal Oswal's research reports expects 50% upside potential
CESC Target Price Rs 1360, says the research report
A major broker and equity research firm Motilal Oswal published a research report stating there is a 50% upside potential in the CESC with target price of Rs 1360/- (CMP as on 18/08/2017 is Rs 940). The report says "The demerger into four separate businesses would drive value by unlocking the potential of the distribution and retail businesses. Distribution business valuation will get re-rated on reduced volatility in earnings, and thus, its cost of equity. Spencer too will command better valuation after expected turnaround in FY18." The report also high lighted the potential risks with the loss making subsidiaries and declined sales growth in the retail business.
(Note: This is neither a stock recommendation nor an analysis. The research report quoted here is the property of the respective broker and investors are advised to approach them for full report. The research report is subjected to the declaimer given in it. The author owns the stock mentioned in the article and may have written a biased news report. Do a thorough study or consult your investment adviser before investing)
American aircraft maker Boeing says India will require 2100 new commercial planes over two decades.
Times of India: India will require 2100 new planes, says Boeing
Not just the Boeing, here is what Airbus says: India needs 1,610 new planes over 20 years. The European plane maker Airbus estimated, more than a year ago, the requirement of such a huge numbers of aircraft for India.
Livemint: India needs 1610 new planes over 20 years
At the same time, CNN asks the question- India is buying over 1000 new planes, but can it handle them? CNN questions the availability of infrastructure in India to handle the planes.
CNN reports India lacks infrastructure to handle the planes it is going to buy
At the same time, CEO of portfolio management servie (PMS) firm Equity Intelligence India, small cap expert, Porinju lightly says Aircrafts can not land on paddy fields. He says in an interview to BTV, there is a huge opportunity for infrastructure development companies involved in constructions and maintenance of airports. Planes can only land and take off from runways meant for them. So, who builds the runways?
Porinju Says Aircraft can not land on paddy fields emphasising the need for infrastructure developments
He does not stop at telling such stories, he had already invested hugely in one such infrastructure development company. The Equity Intelligence India bought around 18.8 million shares of GVK Power and Infrastructure at Rs 9.61 per share in an open market operation. Thus the Porinju's PMS firm holds 1.19% stake in GVK power and infrastructure.
What does GVK do? If you go for an air-travel from one city to another in India, at least one of the airport you take off from or land at would be developed by GVK.
GVK- in Airport development business
GVK also turned to profit in the 1st quarter of the FY 2017-18. A news article in The Hindu read "It posted a net profit of Rs. 6.77 crore for the first quarter ended June 30, 2017, against a loss of Rs. 51.04 crore in the corresponding quarter last year on a standalone basis. The company's total revenue was up at Rs. 22.42 crore against Rs. 16.85 crore."
The Hindu: GVK posted Rs 6.77 crore profit in the 1st quarter of 2017-18
The share price of the GVK is also zoomed due to all these positive factors. It is not yet a multi-bagger. Porinju says he believes in buying multi-baggers.
Disclaimer: This is neither an analysis nor the recommendation of the stock. This is purely a collection of some of the news capsules from the business and market world. Consult your advisor or do a thorough study before investing.
(This is neither a stock advice nor a research report. Readers are requested to do their own research or consult an adviser before investing).
05 June 2017: Few stocks moving more than 10 to 15% in a day is not a rare event in the stock market. There could be many stocks went up by 10 to 20% today. But these two stocks, Titan Company and Swelect Energy caught my attention, as I was watching them since few days.
Titan Company
Titan, a Bangalore-headquartered, a joint venture of Tata Industries with the Tamil Nadu Industrial Development Corporation (TIDCO) is well-known for Tanishq Jewellery, Titan Eyeplus eyewear, SKINN fragrance, Titan, Sonata and Fastrack watches, Fastrack accessories and Fastrack smart watches. Today, the prices of the stock went up by INR 79.75 (16.91%). This is majorly due to the GST rates of 3% on gold.
Titan Company price movement, pic: moneycontrol
Brokerage CLSA upgraded Titan Company, Rakesh Junjhunwala’s favourite stock to ‘buy’. Rakesh Junjhunwala holds 752.07 lakhs of shares of the company as in April 2017. Titan is presently paying a 2 percent in total indirect taxes on Jewellery, which include 1 per cent in excise duty and 1 per cent VAT. What is the plus point of 3% of GST then? The jewellery company can get input tax credit and effective tax could become less than 3% which is the lowest tax bracket under GST.
Though the company’s price to book value is higher at 11.71 and PE of 64.17, the promoter’s holding of 53.05% is a plus point. The today’s delivery quantity is just 16% against the 8 days average delivery quantity of 48%. NSE website says “The higher the Percent of Deliverable Quantity to Traded Quantity the better - it indicates that most buyers are expecting the price of the share to go up”. This is not seen in Titan Company today.
Before you gear up for some action, enjoy this Fastrack Reflex fitness band ad video.
Swelect Energy Systems
Swelect Energy Systems, formerly Numeric Power Systems Ltd (You might have heard Numeric UPS but not Swelect) was locked in 20% upper circuit on 26th May due to the good Q4 result.
The net profit for the Q4 is Rs 13.1 crore against a loss of Rs 1.05 crore a year ago. The investors are rewarding the stock for this turnaround. The company also recommended a dividend of Rs 4/share. It is continuing the upward movement and was up by INR 48.10 (11.36%) to INR 471 today with a fair delivery percentage of 30%.The stock has an attractive PRICE/BOOK ratio of 0.67. The book value of the stock is Rs 701.72 which is higher than the stock price as on today. The promoter’s holding stands at 64.08%.
Swelect Energy price movement, pic: moneycontrol
S P Tulsian also said he had picked up this stock. As per the moneycontrol report, he is positive about the company and the GST impact on the photovoltaic cells business of the Swelect Energy. Click here to read more about his views.
Edited on 09/07/2017: Swelect Energy systems was trading at INR 614.50 on 07/07/2017 up by Rs 143.50 or 30% within one month from the date of posting this article.
Titan was trading at INR 534 on the end of market day 07/07/2017 down by Rs 17 in the same period.
Edited on 20/08/2017: Titan planned to sell its product in US market through Amazon as per the news reports. The Titan made new highs again in last two weeks and presently trading at Rs 623, Rs 72 up from the date of publishing this article.
