Mahindra Satyam

Lets take a look at the stock of Mahindra Satyam. They are going to declare the result on 29-Sep, for the years in which scam surfaced. First sign of optimistic result is that 29th is a wednesday. Normally, if results are bad, people generally avoid giving them on trading day.

Assuming, that 1/2 of the amount was falsified by one Mr Raju. So, its revenues would be around 4000 crore and profit of around 900 crores. It places Satyam some where in leagues of HCL Tech, Mphasis etc. HCL is having a market cap of currently  29000 crore, Satyam having some 11000 crore. Assuming, the above 1/2 falsified amount, the market cap should quote similar to HCL, so price can see appreciation of another 50 to 100% from the current price.

I have been accumulating this stock for quite some time and have almost 20% of my portfolio built on satyam (not a good idea, but betting on the odds has been a weakness of mine).

If things goes like I said earlier, it can give handsome returns in days to come. Also, once the uncertainty factor is removed from the stock, it is bound to give a direction. Up or down that needs to be seen. I hope it is upward.

I would recommend buying Satyam on dips for a longer term horizon.

Wockhardt

wockhardt... doing great... gave the tip on Jun-2010 ... those who bought it would have made good profits...

looking at the sales turn over and market cap of similar pharma co, it should have a market cap of near 10k cr... currently it is 2.5K cr. So, possible apprecation of another 50 to 100% over a period of 1 to 2 years seems reasonable...

disclaimer: i have some position in this stock from jun-2010. please buy/sell at your own risk.. :-)

Wockhardt

Let me start with stating that this one is truly for bravehearts. It was once upon a time 3 years back it was quoting around 400+, now it is battered down to 136, a slight recovery from 115 its 52 week low.

So how did this happen? well, they wanted to grow inorganically so acquired some debt and also hedged against rupee when rupee was strengthening. With the big crash in 2008/09, the growth went for a toss and rupee started declining against $$, so they were stuck with double whammy. Hence the precipitous fall  from 500+ to 70 and it is slowly recovering.

For some of the previous quarters it has been posting loss after loss and paying huge interest. Lenders are lining up to liquidate this company.

So, with all this bad, why am I recommending it? Well, the promoter stake is still 74% and they have been divesting its non core business to reduce its debt, still it will probably take couple of quarters to get back into black. By that time it would have gone higher. Also, there are news that some MNC might take it over in that case it would be really good for share holders. The promoters are trying hard to come out in black and being a branded name globally it can surely do a turn around.

I recommend to open a small position in this stock (I did it already at current price of 136Rs.) with a target of 400+ in couple of years if things go well.

So it is truly braveheart stock, tread with your own risk as risk reward in this share is extremely high.

IDFC to bring global partner aboard

IDFC to bring global partner aboard: "IDFC?s executive director Vikram Limaye told ET the firm was looking at a strategic partnership ?to either manage the fund or advise foreign flow of funds into the Indian equity market?. He declined to give details."

IDFC is a very good long term bet. It would give atleast 10 to 20% annually compounded... If it reaches 140 to 150 again it is good to accumulate. I hold it from when it was in 75Rs mark during 2009 fall... keep buying on dips...

Long time no see...

Long time I have not posted anything as part of recommendation or updates on what I am buying/selling...

Well I have sold out my entire stake in Unitech at good profit of 70%, was hoping it would go higher. But with bad results and losses in telecom business it was not looking attractive. I am also keeping Suzlon on watch list to sell and move out.

The companies I feel look attractive buy right now are JP Associates, Punj Lloyd (have patience in this one) and Bharat Forge. I have around 20 to 25% of my portfolio in these cos and am increasing my position in them as and when I get some chance.

Also, I have opened some position in gold stocks, around 5% of my portfolio. I recommend putting a systematic investment plan in gold and keep holding for couple of years, it will give better returns for sure.


Also keep watching for deccan gold, mining policy is due this session and it can shoot up. I had recommended it at 40, it is now at 26. I have good position in the same around 5% of my portfolio. Expect this lambi race ka ghoda to go great guns when it starts mining (another 1 to 2 years out) but before mining it would be already accumulated and would have gone up. It can potentially give 100 to 500% returns in 2 to 3 years time frame.

So happy investing/trading or whatever...

Punj Lloyd

Well... I recall giving tip for punj lloyd as investment opportunity when it was battered down from 250 to around 165... Would be couple of months back...

I have bought some punj lloyd today. Have booked some partial profit in relpow and suzlon..

Punj lloyd has good order book and has recently won good contracts. I am expecting it to continue good momentum going forward too...

A good stock to keep in portfolio.. Even reliance power is good stock...

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.