Wealth Destroyers as Potential Multibaggers~ Mumbai Equity Workshop Sat June 17 2017

Wealth Destroyers as Potential Multibaggers~ Announcing a Full Day Mumbai Fundamental Equity Workshop on Saturday, June 17 2017 

🙂 This time in this Stock Selection ~Value Vs Price Workshop have kept an exciting Theme :

WEALTH DESTROYERS : POTENTIAL MULTIGAGGERS

As Limited Seats would advice to Book Your Seat right away here => http://www.jsalphaa.com/register.php

Plan to cover over 25 Wealth Destroyers to assess any Turnaround Value vs Price & thus a chance to redeem themselves and become Wealth Creators from here… or should just one move on in many of such Wealth Destroyers that are now beyond redemption

Here’s what some participants said of the December 2016 Mumbai Fundamental Workshop on Stock Selection : Value Vs Price…and this was before IB Ventures zoomed 7 x in months from Rs 20 to Rs 140 & HOV doubled in the same time to cross Rs 300… we had covered both these & more in Earnings & Asset Basis Valuation exercises

“Amazing… Awesome Session about Fundamental Stock Selection & Wealth Creation ”

“Full of Inspiration, filled with wisdom…. am really proud to be a part of this wonderful session”

 & from a repeat participant “recreated the same old magic of Bangalore in Mumbai… great Saturday”  

Would love to interact with you ~ So do invest one Saturday ,June 17, 2017 with me in my Mumbai Fort Office near BSE and above Starbucks & Croma

Register here => http://www.jsalphaa.com/register.php

Here’s the Detailed Template of this Workshop if you want more details on coverage

gap-master-class-mumbai-17june2017

🙂 See you Saturday, June 17, 2017 at my Mumbai Fort Office Conference Room… we’ll figure out if Suzlon will continue to be ZZZZZlon!  & dissect many such Wealth Destroyers!

Cheers !

Claris Lifescience to sell off at twice Market Cap Valuation ?

Where Monies are involved there will be Stink!

This Generalisation fits Stock Markets wonderfully well !

I believe ,and have quoted often and even set a MBA Post Graduate Final Examination question to discuss with real illustrations that ‘India & Insider Trading are Inseparable’…and I daresay,deliberately kept so !

Let’s take this morning’s Headline on Page 1 in the Mumbai Edition of India’s leading and influential pink paper

Cadila Healthcare to acquire Claris Lifesciences for Rs 3400 crore  

Such Acquisition News has been floated by the same reporter of the same newspaper just a few months ago on February 12,2015

Big pharma eyes takeover of Claris’ injectables business for Rs 2500-Rs 3000 crore

When BSE sought Clarification from Claris Lifesciences today,May 21,2015 and even on February 12,2015 here are the two replies from the Company

Clarification to BSE  by Claris today, May 21,2015

“As a company policy we do not comments on any market rumour and speculations. The Company continues to explore and evaluate inorganic and strategic opportunities in various forms from time to time; however nothing definitive in this regard has happened. We will notify the exchanges upon occurrence of any definitive developments in this regard.

Also as a company we inform stock exchange for any such information which is required under listing agreement as well as clause 36 of the listing agreement.”

Clarification to BSE  by Claris on Feb 12,2015

“we state that at present we are not negotiating the sale of stake in the injectables business, and the Board of Directors of the Company has neither considered nor taken any decision in this regard.

For the growth of the business, Company continues to explore and evaluate inorganic and strategic opportunities in various forms from time to time, however nothing definitive in this regard has happened. We will duly notify the exchanges upon the occurrence of any definitive developments in this regard.”

Relevant Share Price Movements in February 2015  May 21,2015 reveal the huge impact of such News by a leading pink paper

February 12,2015 ~ A Day Before,On & a Day After 

Date

Open

High

Low

Close

WAP

No. of
Shares

11/02/15

207.80

212.00

205.10

206.90

207.05

1,00,569

12/02/15

238.40

248.20

228.50

248.20

240.08

7,95,565

13/02/15

269.80

293.00

250.10

258.50

272.86

14,86,607

Opening February 2015 at Rs 175 and moving to just over Rs 200 levels by February 11,2015 before hitting and closing on upper circuit of 20% at Rs 248 on February 12,2015 on impact of the Newspaper Story with heavy abnormal volumes and  despite Company Clarification (see above) that was posted on BSE Website at 2.42 pm during market hours that they are not negotiating any such sale the Share Price yet hits up 18% at Rs 293 the next day,February 13,2015 with nearly double the Feb 12,2015 volumes !

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Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Have a look at our first impression posted  after our FM ‘s Union Budget Address and during market hours

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Think he missed a great opportunity to provide us with the ‘Naya Soch’ of the new NDA Government

His Speech stated quite a few challenges and objectives like tackling Black Monies,raising Tax to GDP ratio,lowering Inflation and Fiscal Deficit % but stopped short of spelling out the specifics of solving these

Having just 45 days after NDA was elected he has opted for the easier option of simply following the UPA budget process and numbers too that the UPA FM Mr Chidambaram laid out in his Interim Budget in February 2014….whether it be Disinvestment or Tax Receipts or Fiscal Deficit Control Targets…made right noises but was tokenism in a few areas like social expenditure…thankfully nothing really adverse or anti poor though direct tax incentives are not really cause for any celebration

Sensex had quite a roller coaster ride today as to be expected….opening stable & pre budget speech at 25514 in the morning then sliding before noon over 300 points to 25117 from yesterday closing of 25445 during the budget speech before strongly racing away by over 700 points to 25920 …over 400 points previous day closing post budget speech only to reverse all the gains and close at 25373,down 72 points  from previous day closing

Will the Sensex continue to Humor us in the near term despite not an iota of Humor in the FM’s Speech !? …sense is that any correction will be a hiccup on the onward march towards 30000 on the back of increased FII Net Infows & Big Corporate Infra spending  

I see some clear big winners in the Infrastructure Space across the Board from Shipping to Power to SEZs to Real Estate to Highway Road Construction Companies and Pipeline Companies

 

 

No Sugar ? What is my Alternative Sweetener ? Sugar Free or Equal or Splenda ?

No Sugar ? What is the Alternative Sweetener ? Sugar Free or Equal or Splenda ?

I use Splenda  especially as it does not contain Aspartame( a combination of two amino acids,aspartic acid and phenylalanine. Amino acids are the building blocks of proteins and are found naturally in many foods.Aspartame though approved by US FDA with prescribed daily intakes,has been perceived to be responsible for causing many Health issues , even Cancer…though tests are not conclusive

http://www.cancer.org/cancer/cancercauses/othercarcinogens/athome/aspartame 

Those who cannot consume Sugar because they are Diabetic or prefer low or no calorie sweeteners routinely turn to these three popular alternatives  :

  1. Sugar Free Gold Low Calorie Sugar Substitute claims to be India’s No 1 Sweetener ~ It is made from Aspartame,a protein derivative ~ A 0.75 g sachet is equivalent in sweetness to two teaspoons of sugar and contains 2.8 calories instead of 40 calories that the two teaspoons of sugar hold ~ not recommended for Children and not meant for Phenylketoneurics.Ingredients are Lactose,Aspartame and Polyvinyl Pyrrolidone…..Phenylketonurics are people who have PKU disease. People with this disease cannot digest the amino acid phenylalanine properly, so if they eat too much of it, it could build up in their brains and cause mental problems. The warning on the wrapper is warning these people not to eat that product so they can avoid ingesting phenylalanine.
    PKU disease is a genetic condition, and it can be easily discovered through a blood test ~ Sugar Free Gold is manufactured and marketed by Zydus Wellness,Sikkim which is part of the Cadila Pharma Group of Gujarat
  2. Equal is a low calorie sweetener ~ Each Sachet of 1 g contains 36 mg of Aspartame and it’s 4kcal is equivalent in sweetness to two teaspoons of sugar that is 32kcal.The ingredients are Lactose,Aspartame and colloidal silicon dioxide.It is not for Phenylketoneurics and not recommended for Children.It is manufactured by Qualicare Pharmaceuticals Ltd,Medak,Andhra Pradesh and marketed by Merisant India Pvt Ltd,New Delhi
  3. Splenda is a no calorie sweetener that is ideal for the whole family ,including Children,Pregnant and Nursing Women and even those with Kidney,Liver or Cancer Issues.It does not contain Aspartame.It gets the sweetness from Sucralose and also contains Dextrose and Maltodextrin.Each Sachet is 1 g and suitable for people with diabetes.Splenda is distributed by McNeil Nutritionals LLC,Foret Washington,PA,USA.Sucralose is made from a patented process from sugar to a no calorie and no carbohydrate sweetener.Sucralose does not have the after taste bitterness associated with other alternatives to sugar like saccharin and acesulfame K and unlike Aspartame can hold up to heat and thus can also be used in cooking and baking.After 20 years of Research  and over 110 scientific studies it is now allowed in over 80 countries.The US FDA and WHO do not require it to mention any warnings or restricted use on it’s labels.Also it has no expiriy date unlike other sweeteners that need to be conumed within one to three years of manufacture .You can check out why Splenda is a preferred sweetener to others at this link on their website http://www.splenda.com/faq/no-calorie-sweetener   

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Performance of the BSE Sector Indices in 2011/12 and to date is quite Interesting

Performance of the BSE Sector Indices in 2011/12  and to date is quite Interesting ….What provoked this post is Sameer’s counter argument in my earlier post…he is bullish in the short term,citing the favourable upmoves in the Pharma,Cement and Auto Sectors…I’m looking at the Bigger Picture and I’m not so excited really as Macros are clearly playing up and this Government is unlikely to push big ticket reforms…we need to await 2014 General Elections,which I fear may yet again through up a fractured verdict…but I hope with a more reform friendly and decisive coalition !

Have a Look at the Performance of the BSE Sector Indices in 2011/12 and to date…Quite Interesting…The Reds & Greens signal fall or rise/holding up from over a year ago  

The Alltime High & Low Columns are quite revealing

  • FMCG,Healthcare and Auto Indices  have registered All time Highs this Month…with consistent Wealth Creation in the 21st century in FMCG and Healthcare while a huge surge in the last four years in the Auto Sector
  • Quick and huge  wealth destruction in the IT sector in 2000/2001,the Metals and Power Sector inside Ten months in 2008 between January and October and in the Realty Sector between Jan 2008 and March 2009  

PERFORMANCE OF BSE SECTOR INDICES AS ON APRIL 26,2012

Sector

Valuation

Current Close

April 26,2012

A Month Ago

A Year Ago

52 Week

All Time

%

Mkt Cap

PE

PBV

Index

%

Index

%

High

Low

High

Low

IT

9

19.4

6

5509

6011

(8.4)

6244

(11.8)

6361

4639

8678

Feb 2000

835

Sept 2001

Teck

12.6

23.4

3.5

3239

3516

(7.9)

3764

(13.9)

3799

2982

4188

Oct 2007

547

Sept 2001

FMCG

7

35

14

4806

4386

9.6

3739

28.5

4834

3562

4834

April 2012

706

April 2003

Consumer Durables

0.7

20

2.7

6509

6377

2.1

6491

7097

5063

7370

Nov 2010

414

Sept 2001

Metals

9.4

14

2.4

10981

10978

16723

(34.3)

16723

9191

20495

Jan 2008

3807

Oct 2008

Oil & Gas

11.7

16.9

1.8

7896

7910

10093

(21.8)

10102

7495

14269

Jan 2008

2529

Aug 2004

Capital Goods

3.8

15.9

3.1

9424

9933

(5.1)

13710

(31.3)

14108

7807

21021

Nov 2007

481

Sept 2001

HealthCare

4.4

57

4.4

6747

6391

5.6

6191

9

6879

5757

6879

April 2012

985

April 2001

Bankex

9.8

13.3

2.1

11666

11571

13520

(13.7)

13501

8947

15108

Nov 2010

1614

June 2003

PSU

25.7

13.8

2

7160

7235

9169

(21.9)

9254

6204

11205

Jan 2008

734

Sept 2001

Auto

4.9

22

4.8

10745

9861

0.1

9678

11

10829

7814

10829

April 2012

2128

Dec 2008

Realty

1.2

20.9

1.4

1677

1726

(2.8)

2346

(28.5)

2311

1348

13848

Jan 2008

1298

March 2009

Power

7.2

15.3

2

1991

2082

(4.4)

2724

(26.9)

2714

1725

4929

Jan 2008

1275

Oct 2008

  • IT  shows a Drop,but TCS has outperformed Infosys ,which has slumped and the latter holds 48% weightage in the Index ! against just 29% by TCS !…this needs to be rectified by BSE rightaway…more so as the Market Cap of TCS is Rs 233301 crs against just Rs 135415 crs of Infosys !….The Index tracks the share price of  10 Companies with 88% weightage of just three …Infosys,TCS and Wipro …Other interesting constituents are Oracle Finance and Financial Technologies 
  •   Techk comprises of 30 IT,Telecom,Media and Communication Companies and has mirrored IT fall
  • FMCG has been the years Darling with ITC (55% weightage) and HUL (18% weightage) outperforming to allow the Index to hit Alltime Highs…11 Companies constitute this Index…Interesting ones are the two Kingfisher Group Companies,United Spirits and United Breweries…. and Tata Global (spotted this at Rs 80 late in 2011) and the huge 2010/2011 winner Jubilant Foods (Dominoes Pizza)
  •  Consumer Durables has heavyweight Titan with 51% weightage in the Index…It’s been a flat year
  • Metals has seen a bad year…In fact this Index has slumped the highest @ 35% over last year…75% Index weightage is in Five scrips led by Tata Steel with 22% followed by Coal India,Jindal Steel,Sterlite and Hindalco
  • Oil & Gas too has seen a bad year…Reliance with a 54% weightage and ONGC with a 22% weightage aggregate a skewed weightage of 76% in the Index
  • Capital Good Giants,India Proxy Larsen and Toubro and BHEL have a weightage of  54% and 16% respectively in the Index that monitors the share price of  17 companies,that also include Siemens,Suzlon,Havells,Thermax,ABB and Punj Lloyd…it’s been a shocking year for both,Larsen and BHEL on the bourses and the steep fall has unnerved even the aggressive Investors
  • Healthcare has held up well in 2011/12…19 Healthcare and Pharma Companies comprise the Index with Sun Pharma (18%),Dr Reddys (17%) and Cipla (12%) leading the weightages
  • 14 Banks comprise the Bankex with the top three weightages given to HDFC Bank (26%),ICICI Bank (25%) and State Bank of India (16%)…it’s been a very challenging year for the Banks given the slowdown in the Economy and high interest rates affecting credit offtake…the rising level of NPAs remains a threat
  •  PSU ~ The Index has 60 PSU Companies in it ! with Coal India and ONGC leading at 14% each in weightages followed by State Bank of India with 9% and NTPC with 8%…Interestingly these 60 Comnpanies have an aggregate  Market Cap of Rs 1561821 crs currently….and this smartly and significantly  constitute nearly 26%,that’s over one fourth of the Total Current Market Cap of BSE of Rs 6108734 crs 
  • The Auto Index covers 10 Companies across the sector spectrum of leading four HMV and LMV wheelers & Two Wheelers,Battery (Exide) & Engine (Cummins) Manufacturers and Tyres (Apollo)…Aggregate 86% weightage is given to top Five Vehicle Players led by Tata Motors with a 31% weightage .Interestingly and encouragingly too,this Index has held up well,largely due to outperformance by Tata Motors…However Index aggregate Market Cap is below 5% of total market cap 
  • Realty Index tracks the share price of 12 realty companies…DLF lead weightages with 33% followed by Unitech (17%),Oberoi (10%) and HDIL (10%)…Shobha,Godrej Properties,Phoenix,D B Realty are some others in this Index…it’s continued to be a sliding year for this sector that’s been saddled with huge crippling debt,huge inventories and delayed projects….but how much more lower can it go !…search for contrarion winners in this sector over the long term…had spotted Orbit at Rs 20 + late last year and early this year…Price has doubled to @ Rs 48 currently…and even Indiabulls Real Estate at Rs 45 + levels after demerger of Indiabulls Power….it surged to Rs 80 levels before reacting now to Rs 62 …But Both do not form part of this Index 
  • Power Sector is battling  Source Feed Supplies of Coal and Gas that’s crippling Operations and resulting in lower output and capacity underutilisation….Implementation of both,Public and Private Mega Projects too has been delayed for a host of reasons …This Index tracks 19 companies in the Sector that cover Generators,Transmitters and Distributors as also others that supply Equipment like BHEL which has the second largest weightage of 15% …NTPC with a 20%  leads the weightages….Incidentally Private Power Players like Reliance Power  and Adani Power have a weightage of 4% and 3%  respectively….Given the Challenges faced,the Year has been quite unkind to this Sector…the Index has slumped @ 27% in the past year…anyone for a Contrarion Bull Play here !? 

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Piramal Healthcare invests US $ 640 million for a 5.5% stake in Vodaphone Essar….looks suspiciously like a ready forward deal as Ajay Piramal explains the Exit Options !…whatever…. limited downside from CMP of Rs 380

Piramal Healthcare invests US $ 640 million for a 5.5% stake in Vodaphone Essar….looks suspiciously like a  ready forward deal as Ajay Piramal explains the Exit Options !

Stock Channels carried ‘live’ this afternoon Ajay Piramal’s Media Meet to announce the rationale of the above investment

Interesting Comments made by Ajay Piramal…..however he refused to answer directly a question posed to him whether the exit options have been documented with Vodaphone….in a subsequent interview when posed the same question he replied that the confidence comes from the discussions he has had !

Ofcourse they would be confident !…it would have been captured in a Shareholders Agreement

So what is this new Investment and the rationale given

Well,Piramal Healthcare is sitting on Rs 10000 crs cash and receivables …..This surplus was a result of selling out in 2010 their domestic generic formulations business to Abbott for Rs 17000 crs or US $ 3.8 billion !…at nine times sales and 30 times EBIDTA !…transferring as of September 8,201,the Baddi Plant Assets and 5000 employees and 350 brands to Abbott…Rs 10000 crs were received upfront while Rs 1750 crs will come in four annual tranches  

The monies received/receivable are @ Rs 17000 crs….tax was Rs @ Rs 3700 crs..Rs 2508 crs was used to buy back 20% of the equity => 4.18 crs at Rs 600/share…Apart from a normal dividend of 300% or Rs 6/share a special dividend of a similar amount was announced 

Ajay Piramal boasted today  that the rime objective was to increase shareholder wealth !…and  that he has distributed Rs 2700 crs to shareholders !….really !…How ?…actually the routine Dividend is Rs 6 per share => @ Rs 100 crs…a special dividend was announced of Rs 6 per share too….that’s another Rs 100 crs….so dividend was an aggregate of Rs 200 crs….and Rs 2508 crs of company monies were used to buy back shares as stated above…at Rs 600 per share !…this reduced the paid up equity capital base from Rs 41.80 crs to Rs 33.44 crs as at June 30,2011….now buyback is normally a strategy that should be EPS accretive to remaining shareholders  and is deployment of surplus company funds that cannot be reinvested or applied elsewhere to earn good returns !……what has happened is that the scrip price has drifted down below Rs 400 from above Rs 500….the buy back of 20% of the shares was not a good strategy at the high price of Rs 600 …..remaining shareholders have suffered badly…..company has lost Rs 2508 crs for this buyback with nothing to show for it ! 

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