Featured for second year in a row in Outlook Business for Stock Pick of 2016

 

Hey ! Check My Pick for 2016 in  the Special Edition of Outlook Business for December 2015 that features Stock Pickers & their One Pick for 2016 ~ it’s on the stands now and  is free online on the above link

Last Year in December 2014 I had been featured as One of the 10 and my pick Shemaroo for 2015 at Rs 159 had surged 102% to Rs 321+ and currently as  of December 18,2015  a year later yet quotes strong up 70% at Rs 270 .Here’s that blast from the past  link  ~ this in a year  2015 where the Sensex & Nifty are about to close the year down 7%

😆 This must have given confidence and conviction to the Outlook Business Editors to invite me yet again for the second year in a row & I accepted

For my Pick for 2016 in this Special Edition,I’ve gone with Astec LifeSciences @ Rs 238….it’s now a Godrej Group Company with a Market Cap of just over Rs 450 crs

EROS reads SORE Backwards ! ~ On Lower Circuit at Rs 213 ~ S’o’rely facing Class Action Sore time !

EROS reads SORE Backwards ! ~  On Lower Circuit at Rs 213 ~ S’o’rely facing Class Action Sore time !

EROS Media is listed on NSE & BSE where it’s reeling at 10% lower circuits of Rs 213.75 & 213.85 respectively

The FY 15 Annual Report Boasts of  ‘The Big Picture’ of Producing Hit after Hit ! & in Investing in Winning Scripts !

The Reality Now is that’s it’s a Rapid Losing Scrip taking Hit after Hit !

The reason is the US Class Action suits launched by many  US law firms to recover  loss for Investors from Investments in the period June 17,2014 to October 30,2015  and some suits also carry the days from November 2013 at the IPO time to current November 2015 in the NYSE listed EROS INTERNATIONAL PLC  & here & here & here 

The NYSE Listed EROS  has dropped by 45%+ in just five days and over 66% from January 1,2015 this year to just over US $ 7 currently .It was US $ 39 on August 13,2015 just three months ago

Those Indian Broking Firms who have recommended Eros Media for Investment in India are now recommending an Exit !

Pray how does one exit on lower circuit !?….stand in the queue to sell and pray your order gets executed

Eros International Media Listed on BSE recorded a 52 Week high of Rs 644.40 on July 20,2015 just four months ago & is down over 66% from this high to lower circuit of Rs 213 today

Here are some of the accusations stated in the US  lawsuits and in critical reports  and they are seriously serious and reek of  acute Corporate Governance Issues and violation of US Federal Securities Laws by the NYSE listed EROS INTERNATIONAL PLC :

  1. Defendants issued materially false and misleading statements to investors and/or failed to disclose that: (i) Eros’ reported earnings significantly overstated the economic viability of Eros’s business model; (ii) Eros’ accounting policy for amortization was unjustifiably aggressive in light of the impact of piracy on the long-term value of Eros’s assets; (iii) despite Eros’ reported profitability, Eros generates no cash; (iv) Eros has only been able to stay afloat by issuing stock and taking on debt; (v) Eros significantly overstated the number of Eros distributed and Eros’ theatrical revenues during fiscal years 2014 and 2015; and (vi) as a result of the foregoing, Eros’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
  2. The above accusations leveled  in the lawsuits drew from an October 30 2015 report  that was published on Eros International Plc  by an investment blog Alpha Exposure asserting, among other things, that: (1) reported earnings are significantly overstating the economic reality of its business model (2) The financials of  subsidiary revealed a lack of free cash flow and raised many questions about the company’s accounting and (3) Company has enriched the promoters’ family at the expense of shareholders through a series of related-party transactions. Further, on November 10, 2015, Seeking Alpha reported that Eros International Plc has overstated its theatrical revenue by 82% and 104% during fiscal years 2014 and 2015, respectively and overstated the number of movies it has distributed by 124% and 200% during fiscal years 2014 and 2015, respectively.

 Eros International Media has just declared it’s half year results at September 30,2015

There is no mention of the class action suit developments in USA as the Interim Results are dated November 9,2015 while Law Suits are dated after this.However what started this whole Problem was the Critical Accusatory Report of Alpha Exposure of October 30,3015

There is as required,mention of 14 Investor complaints received in the July to September 2015 quarter and none remained unresolved at September 30,2015….what was the nature of such complaints and whether they were resolved to the satisfaction of the Investor is not known

EROS is promoted by Sunil Lulla who serves as Vice Chairman & MD.The Promoter Holding is 73.66% as on September 30,2015 while another 8.2% is held by 5 other Institutional Shareholders as on the date

The auditors,Walker Chandiok & Co LLP,  have given a clean review of the interim FY 16 results and have relied on the review of the interim results of the 12 subsidiaries and step down subsidiaries by other auditors.Their Audit Report of FY 15 also does not carry any qualifications or reservations or adverse remarks read more

Cafe Coffee Anyone ! ? ~ Successful IPO at Rs 328 ~ Awaiting Listing

I’m sure most of us have had a Coffee at one of the Chain Outlets of Cafe Coffee Day (CCD)

It’s parent Company Coffee Day Enterprises Ltd (CDEL) just concluded a successful IPO and fixed the IPO price at the upper band of Rs 328

Most had recommended to avoid the Issue as the Pricing was very High

I  hold a contrary opinion and had recommended the Issue but not as a Stag as there does exist the risk of listing gains not being available

Here are some relevant extracts from the IPO note prepared by us

 

Subscribe but not as a Stag ~You Need Not Sit Out !

Sitting Outside a Cafe Coffee Day Outlet

Further Lowering of Debt will significantly transform the Financials Dynamics ~ Low Floating Stock ~ It’s Not an Offer For Sale ~ 16.73 % Equity Stake in listed Mindtree worth @ Rs 2000 crs currently
Immediate Risk : Listing Gains may not be available as IPO Pricing is perceived to be on the higher side

Five Positives in our View

1. Huge Brand Recall & therefore Significant Brand Value ~ CDEL,through its subsidiary, operates the popular Cafe Coffee Day Chain of 1538 stores across 219 cities with a 46% Market Share.It has been recognised as the second best Indian Brand.This Intangible Asset is not in the Books but clearly is in the Premium sought in the IPO Pricing of Rs 316 to Rs 328

2. CDEL has a 16.73 % (10.41 % directly and 6.32% through 88.97% owned subsidiary Coffee Day Trading Ltd) Non Promoter Equity Stake in the listed Software Company Mindtree which is worth @ Rs 2000 crs based on Share Price of Mindtree ~ if monetised it will make CDEL free of net debt instantly and add Rs 250 crs + to bottomline on interest saved=> that’s an incremental EPS of Rs 12 itself !.CDEL had a net consolidated debt of Rs 2864 crs at December 31,2014. Mindtree quoted @ Rs 1400 (FV Rs 10) with a Market Cap @ Rs 12000 crs has just declared a very good Q 2 FY 16 with a Networth as on September 30,2015 of Rs 2243 crs and Book of Rs 267 and Annualised EPS of Rs 70 giving a PBV & PE of 5.25 and 20 respectively.It has also declared a 40% Interim Dividend. Share Price of Mindtree has gained @ 20% thus far in 2015 and holds potential for more

3. The CDEL IPO of Rs 1150 crs is a full fresh issue of Equity Shares and there is no offer of sale from Promoters and other Shareholders.Have a look below at the Pedigree of Non Promoter Shareholders and their pre IPO holdings and cost in CDEL

4. The IPO of Rs 1150 crs has already attracted 17 well known Anchor Investors who have committed Rs 334 crs at Rs 322

5. The IPO comprises just over 17% of post IPO Equity Capital of Rs 206 crs and implies limited floating stock read more

Value Protects in Inefficient & Wildly Swinging Scary Stock Markets

Value will Protect in a Wildly Swinging Market !

How Terribly Inefficient our Stock Markets are !

The Share Price Swings in Small & Mid Caps can be equally exhilarating and devastating !…depends !

And all this happens when the Sensex and Nifty move in a very narrow range !

Down ! Down ! Down!

Look at Amtek Auto’s Crash yesterday and continuing today !…all because the Exchanges announced that it will no longer be traded in the F & O Segment 

It was Rs 141.50 on August 17,2015.Yesterday August 19,2015 it crashed  by nearly 40% and Rs 50 to hit a low of  Rs 78 before closing at Rs 89 !

And this morning August 20,2015  it crashed another 40% to a low of Rs 50.70 before now recovering to Rs 67 levels !  

So the fall in three days from a High of Rs 141.50 to a low of Rs 50.70 is 64% erosion of market cap  from Rs 3100 crs to Rs 1100 crs in just one big Breath ! with High Volumes but low Delivery %….SCARY !

And this is a Company where the Promoters Dhams & Their Companies own 48.98%,FPIs like Goldman Sachs & Macquarie hold 18.83%,Domestic Institutions like LIC hold 16.47% as on June 30,2015.

There were over 46000 shareholders on this date.Spare a thought for them !…and for those who were long in F & O !

…and Spare a Curse for those Broking Houses and FPIs who recommended this Scrip !

Did not all know that the Group is struggling with over Rs 25000 crs in debt !….Wise after the Event ! 

 

Date

Open

High

Low

Close

WAP

No. of 
Shares

No. of 
Trades

Total Turnover

% Deli. Qty to Traded Qty

17/08/15

135.00

141.50

127.55

133.10

133.54

11,27,928

15,415

15,06,28,023

17.63

18/08/15

133.25

134.25

127.40

128.55

129.54

5,32,507

5,649

6,89,83,199

23.42

19/08/15

126.90

126.90

78.00

89.00

100.86

35,47,065

26,846

35,77,46,778

36.40

Look at Stampede Capital  !

Rs 650 two days ago after an all time high of Rs 800 on August 6,2015 and down on two consecutive lower circuits of 20% yesterday at Rs 494 and even today to Rs 406 on BSE !….CRAZY !…and SCARY!….just over 2700 shareholders,one being Superstar Amitabh Bacchan (entered a year and a half ago picking up One Cr shares at Rs 88 & similar at  Rs 110 levels), at June 30,2015 in what is clearly a highly controlled scrip

Look at Ansal Buildwell ! Big Up & Down Swings in three days ! 

Clearly Insider trading Involved or can the long positions be defended as aggressive risk taking based in favourable anticipation of a Supreme Court Judgement that was announced yesterday on the Ansal Brothers for the Uphaar Cinema Hall Tragedy that took 59 lives 18 years ago in a devastating Fire !

On August 17,2015 the Share Price was Rs 123.On August 18,2015,just a day before Supreme Court Order the Price flared to Rs 148.30.Yesterday it closed up on upper circuit at Rs 163.10 ! as Supreme Court announced merely a Fine of Rs 60 crores on the Brothers and no Jail Sentence !….and today it’s on lower circuit at Rs 146.80 nearing noon !…and the rise was being justified as Market Cap just @ Rs 100 crs and land bank value worth Rs 10000 crs !       read more

Shemaroo enters Rs 300+ territory for the first time!

Outlook Business’ Special Edition in January 2015 showcasing TOP TEN Market Experts & their One Top Pick for 2015 had me recommending  Shemaroo  @ Rs 159 

In January 2015 itself Shemaroo shot the roof and nearly touched Rs 300

We are now a little over half way of the year and  today Shemaroo entered the Rs 300+ territory for the first time crossing it’s earlier Intraday High of Rs 295 on BSE & Rs 293 on NSE on January 23,2015

It recorded an all time High of Rs 321.50 & Rs 321.85 on BSE & NSE respectively @ 17% over yesterdays closing and 🙂 over 100% from my reco price of Rs 159 seven months earlier   ,before closing lower around Rs 296 and yet near 8% higher than yesterday

Volumes were abnormal with over 1.25 lakh shares on BSE and near 4 lakh shares on NSE

All on a day when the Sensex & Nifty corrected to close nearly by a per cent over yesterday

Cheers to all who have Shemaroo in their Portfolios !

Disclaimer : Clients & I have an interest in Shemaroo

 

 

Featured in the Outlook Business as one of Top 10 Market Experts with my Stock Pick for 2015

🙂

Feature as one of Top 10 Market Experts  in the Special Outlook Business Issue of January 9,2015 with my Stock Pick for 2015 

Gaurav Parikh in the Outlook Business January 9,2015

 

Update on January 21,2015

😎  How Cool is this !

Top Pick for 2015 Shemaroo @ Rs 159 has closed up today on 20% upper circuit at Rs 239.80 giving a 51% return inside a month ! and some more tomorrow surely ! after a good Q3FY 15 announced yesterday

Hope you guys got some !