Bharat Forge

Recently I bought some shares of Bharat Forge. It was in auto ancillary segment earlier. Now it has made foray into making engineering equipment for power plants/generation. It's current PE is 44 which makes a bit pricy and over valued. However on a long term basis due to its diversification it can be a multi bagger in years to come.

I recommend it as buy on dips for a long term horizon of 3 to 4 years. With power related infrastructure to be the next boom in India this decade (along with health care) it is worth taking the risk.

I expect the share to provide 100% return on the CMP of 255Rs.

Also recommended for reading is the intelligent investor book by Benjamin Graham. One of my friend Shashi recommended it to me. You can buy it from amazon directly if interested. I have given the link.

Fortis Healthcare

Fortis has been in news recently as it acquired some 24% stake in the Singapore based hospital.

I bought some Fortis around Jan 12, 2010 when I recommended it in this blog.

I think it is still a good buy for a long term as it is now the largest health care player in the country after this acquisition with a global foot print.

If there is a blip in the share price, please consider to buy it. I do not think there would be any major correction in this stock inspite of such a great move this year. Every time there is a rise in the price it never retreats or goes back. It falls max 1 or 2 Rs from recent highs.

I would keep this for atleast 2 years+ as the healthcare is booming in India. I would keep evaluating on quarterly basis to see if there is any change it.

HFCL On the Rolls...

Just as I was typing the previous blog putting HFCL for strong heart with risk taking abilities, it shot up later in the day... It went up by 20% circuit.... wiping my loses in HFCL... and it had still some 1 cr shares buy order pending with no sellers available.... so some one seems to be accumulating the stock... might be they know something we do not....

with 3G auction nearing... I believe it is around mid Feb this year, it will gather further steam.. it is first in line for getting 2G auction... with no spectrum available to new players... any global giant who is not in India and want to come in has to take over or partner with existing co with license... HFCL probably would fit that bucket... but then again these are wishes.. but you never know when this ghoda (horse) will run... I expect another couple of days of circuit max... taking it to 18 to 20 zone may be... will book some partial profit and put money in micro tech and fortis....

Hindalco....

Hindalco reached its target.... 150... around 3 months prior to the target date... I booked partial profit and moved the money to RNRL and RELPOW...

I am still buying satyam on dips... it is still to pick up.. once the result date nears... which would be in July 2010... it will start gathering steam...

Satyam Updates

Well satyam got battered today, has gone down by 8%.... well I booked partial profit in central bank like I said in earlier post. Have moved the proceeds to satyam. I feel satyam is going to come out with very strong results in July. And every dip like this in Satyam I feel is buying opportunity.

Updates on stock tips...

Central bank has met its target of 150... much earlier than expected... it has posted very strong results last two quarter hence it is going up for quite some time...

At this point I recommend partial profit booking and taking your principal out, keep the remaining "free" shares for futhur gains...

There are couple of stocks to watch punj loyd and sterling biotech. They look attractive... need to do some further research on them before I can recommend them to put in the stock tips portfolio.

So far, two stocks have met the target central bank and rolta india...

here is the updated portfolio details...

Central Bank...

The target for central bank is achieved... 150 Rs... and surprisingly it came earlier than I expected..

P/E vise it still has some scope to grow may be reach 200Rs...

Central bank is second largest bank after SBI in terms of number of branches. They are working on getting those branches rake in more moolah so that they can land it out and make more money...

I would recommend booking partial profit and keep this bank for long term ... as it may become next SBI in years to come... watch out for NREGA...

As for tip, keep watching for Moser Baer... they are investing heavily in solar based photovoltic power plants... still nascent technology but it can give huge dividend going forward as India is highly power starved country and we need more power plants...

Sorry for not giving tip for long time, have been busy with some personal and project stuff...

Rolta Target Achieved...

Rolta target of 180 has reached, it is now quoting at 185... tip given on 25-May. Target date was 6 month. Rolta exceeded expectation and reached in less than 4 months...

I would book partial profit in Rolta, it is can go up to 200 and then stabilise around 250.

attached is the stock tip performance.

Satyam....

The satyam saga has come to an end long time back... Mahindra got what it needed to bring its IT division to big boy's league consisting of Infy, TCS, Wipro....

The reason satyam is being recommended that inspite of the scandal.. it is still a 2 BUSD company... and it is trading at a PE of only 5.8 when the industry PE is 18... with good management in place it wont take long for FII to come back to the shares in herd like they used to do in past... expect this share to be added to F&O segment too.

On a conservative estimate the stock would be rerated and would make it to 200 Rs easily in a year's time.

I recommend a buy on satyam purely on the basis of its fundamentals which got ignored because of the scandal...

Disclaimer: Please do your due diligence before buying any shares.

I bought some shares of satyam today.

Updates....

Nifty seems to be moving between 4400 and 4700... I think it will remain in the band of 4200 to 4700 for couple of weeks... if good news like recovery of US comes through then it may go up....

Have been looking at making some small amount of money of the stocks which I hold for long term by using covered call option... more on that later...

also trying to see if it is good time to buy some shares of satyam... nothing decided yet... will do something over the weekend and let you guys know...

meanwhile attached is the performance of the stock tip portfolio so far...

Performance As Of 05-Aug...

Here is the performance update of the stock tip portfolio...

Sorry have been busy so am not able to do research on new shares....


Thanks to one of my friend Rachit, I came to know about Shriram Finance Non Convertible Debentures. They are giving 11.5% rate for 5 year. The NCD are going to be traded on NSE too. So, in case of liquidity crunch you can always exit. The rate is attractive and safe based on the ratings it has received and past history.

Disclaimer: Do your due diligence before buying NCD or shares.

Performance Of Stock Tips...

I started giving tips from 21st May 2009. Nifty was quoting at 4210 (closing price). Now Nifty is quoting at 4568 a gain of 8.5%...

Stock tips portfolio has gone up by 11.38% over the same period. Actually, the performance of the stock tip portfolio should be much better than 11.38% considering that not all the stock were bought on 4210... but I am not averaging...

JK Tyres

JK Tyres have a posted a good result for quarter ending Jun 2009. The EPS posted is 9 Rs as given here. Currently quoting at 92 Rs, it has a PE of about 10 for this quarter. If we consider three more moderate quarters, its EPS should be around 20 Rs, and PE 4.5...

It has invested 120 cr in OTR manufacturing expansion, its operation commence in Mar 2010. Assuming, it pushes it EPS to conservative of 30 Rs, the PE at current price is only 3. If we factor in the expansion and forward PE of even 8 ( industry average is 10), it should be quoting at 240 in year 2010 Jun or July.

I recommend a buy on JK tyres at current price with buying on dips, for a target of atleast 200 around Jun or July 2010.

Disclaimer: I have some shares of JK tyres at 79 Rs/share. Please do your due diligence before buying any shares.

Gujarat NRE Coke

Gujarat NRE Coke is a great story in making. Its Mar 09 results saw their EPS go down to 2.5 from 5. This resulted in hammering of the stock from highs of 56 to 36 in the current market fall.

They have acquired 3 coal mines which will provide the coking coal required for its various coke plants. Their current capacity is around 1 million tonnes and they are building another plan in nellore, AP which will have another 1 million tonnes capacity... The current EPS does not factor in the 3 coal mines it has acquired.

On conservative estimate in 2011, its capacity should be 2 million tonnes and with coke prices going up (hopefully) their EPS should easily reach 15. If we keep the PE of 16, the price should be around 130 Rs. Current market price is around 39 Rs, which makes this a gain of 300% + in less than 3 years.

I recommend buying Gujarat NRE at current price and keep buying/holding if there is a dip.

Disclaimer: Please do your own due diligence before buying any shares.

Some Shuffling Done...

I booked profit in IVR Prime... well not much  had bought at 71 sold at 72.5 or so.... but on a positive side I got rid of the not so great stock of IVR Prime...

So here is where I moved my profit to....

Suzlon
Unitech
Gujarat NRE
HFCL

ya ya you may ask why HFCL??? well to cut long story short I am having this "junk" stock as it "may" give "good" returns in its "hey days"... I have huge amount of HFCL I am just waiting for some trigger which can push this stock to 20 or so and I exit...

Till then happy investing.... I am again saying this is good time to buy...

Disclaimer: Do your due diligence before buying any shares....

Unitech

Unitech has posted moderetely OK result. The stock has been hammered from highs of 500 to 28.5. It bounced back smartly to 120, it pulled back  to 77, now it is quoting at 87 Rs.

Unitech has debt of 7800 cr. and most pundits were thinking that company is going to go belly up and so would be share holders.

Now with second round of QIP, it was able to raise 350 MUSD easy to get its debts down to 5000 cr which is OK for a company of unitech's size.

It has posted moderetely OK result. It is planning to build lost cost house tragetting lower and middle class people which is the largest chunk of indian population. It will post great results going forward. It is still having PE of 15 which is lower than industry average of 19 as given here. This year's EPS is 4.56. With change in strategy of housing and also diversification in telecom, the EPS should go back to 9 Rs. That should make the price atleast double from the current price. If we factor in that it catches up with the industry PE then it would reach 2.5 times the current price around 150 to 175.

I recommend a buy of unitech at 83 to 86 with a target of 150 to 175 Rs in a period of 1 to 1.5 years from now.

Disclaimer: I have some shares of unitech at 40, please do your own due diligence before buying any shares.

Booked Profit In RNRL

I sold 50% of my long position in RNRL. The proceeds are given to HPCL. With fiscal deficit climbing, govt has no option but to divest. I am banking with divestment HPCL would be one of the first on the block.

If that happens, then it may zoom to 4 figures in no time. It has almost same revenues as a RIL but it is quoting almost 1/6 to 1/7th time.

I thinking of moving the remaining 50% of RNRL too in to HPCL as RNRL is more of momentum stock. It is rather good to move to some other oil stock like HPCL.

DISCLAIMER: Do your due diligence before investing.

Reliance Power

Reliance power has won back to back contracts for creating power plants in India. They have the largest portfolio for creating power plans in India.

The book value of stock is 54 and PE is 195 against industry average of 27 as given here. All its plant are going to become operational in or around 2012.

It is more of a sentimental stock right now a little over priced at current value of 194.

Considering its potential, I expect the EPS to move from current .42 to 18 atleast once its power plants are operational. Assuming a PE of 26, it should be quoting around 468 in 2012 or so.

It is a very long term buy. I would recommend a buy on every dips of reliance power. If there is a boost in budget about the power sector (which would be there as India needs power very dearly due to lot of deficits in power), this stock will shoot up.

Disclaimer: Do your own due diligence before buying any stocks.

Booked Profits In Unitech and IFCI

I booked profit partially in IFCI And Unitech, the proceeds from that are moved to Gujarat NRE Coke.


So, if you read between the lines you know which one to buy ;-)....

Disclaimer: Do your due diligence before buying any stocks.

GNFC

GNFC (Gujarat Narmada Valley Fertiliser) is one those fertiliser company where Govt of Gujarat has majority stake. It got battered down in past due to one of the decision of Gujarat Govt to have PSU use part of their savings for the social cause. This created a knee jerk reaction and GNFC was battered down from highs to 150 Rs to 98 now.

If you look at the company, its book value is 112 Rs, current market price is 98Rs. Its industry peers are quoting at price/book value of more than 1.5. This one is quoting at .85 of its book value.

The PE of the company is 5.85 where in industry PE is 9.82. If we put a conservative PE of 7 for this company then also it should be quoting around 161 Rs (23 being the EPS of share as per 2008 results).

Looking at the balance sheet for past years, its top line and bottom line both are growing quite handsomely. With Gujarat increasing its agriculture output year on year, it augurs good news for fertiliser companies especially which are based out of Gujarat.

Based on the current scenario, I recommend a buy of GNFC below 105 Rs, the target being 200 Rs by Dec 2010.

Disclaimer: Do your own due diligence before buying stocks.