Stocks Reshuffling... 31-Oct-2014

50% holding in BHEL is liquidated

Proceeds from the sale went to

Eclerx Services -25%
IFCI - 20%
Central Bank - 20%
Force Motors - 10%
Persistent system - 25%

out of this bunch, Eclerx and Persistent look attractive.

Bought Following Shares

Bought the following share after booking partial profit in HPCL.

1. Coral Labs (Debt free company with pretty low pe).
2. Ybrant Digital (High risk stock, not recommended for buying)
3. Albert David (Another debt free pharma company wit low pe)
4. Persistent System (Good IT company bought for long term perspective)
5. EClerx services (Good IT company bought from long term perspective)

Keep holding your Wockhartd, Force, Seamac and Deccan gold. The last one can surprise this month. Keep holding.

Force Motors and SeaMac

I bought some stocks of Force Motors and SeaMac today.

SeaMac is in cyclic upturn. Currently quoting at 136. For last two quarters it has given EPS of 7. Industry PE is around 21. Assuming same EPS per quarter, we are looking at 28 annual EPS. With PE of 20, it could easily reach 400+ if not 540 based on simple math. All its vessels are booked for next two years. So, chances of getting EPS of 28 this year looks very high.

Force motors is in auto sector, Earlier known as Bajaj Tempo. Stock price 734. Quaterly EPS 14. Last quarter was 34. Assuming average of 20 quarterly EPS, annual EPS would be 80. PE at current price is 12. Industry PE is 259 (which is way high for my comfort). Conservative PE of 20 to 30 is good for auto sectory. Assuming the same Force can scale 1600 (PE of 20), 2400 (PE of 30).

Keep an eye on NATCO pharma. I have good amount of it and might add more on decline if any.

Wockhartd, Shilpa Medicare, BHEL, LIC housing, IFCI, Shriram Transport

I am recommending following stocks to buy currently.

Wockhartd - looks attractive at this price. Worst seems to be over for the stock and it is working to get FDA approval for the banned plants. That should be resolved within couple of quarters now. Currently quoting 464.15.

Shilpa Medicare - This is going to become a big player has good product pipeline should accumulate it as the volume is low and not many major players are involved. Can easily reach 750+ by 2015/16. Currently quoting at 239.

BHEL - Open a small position as chances of having NDA looks better, if it were to be true all PSU would shoot up and BHEL would be front runner, can go to previous highs of 450+, currently quoting at 133.

I also diversified my holding in IFCI and Yes bank to Rel cap, Shriram Transport, LIC housing finance. They are running for banking license. Assuming one of them gets the license they will surely go up and make up for losses if any in others. If all get licenses then profit margin can be higher. Assuming another year for getting the license, each one of them barring Reliance Cap can double from current price. Relcap is already at higher PE so  might not appreciate that much.

Infy Puts

And my infy put call went wrong, suffering big loss almost 80% loss :-)

Infy Put Options/IFCI Call Options

Its been a long time since I posted in this blog. Over the course of last 2 1/2 years I have accumulated some stocks and waiting for them to bear fruits during this bull run :-). I am currently holding Central Bank, IFCI, Rolta, Punj Lloyd, SPIC, Reliance Power, Deccan Gold, Selan Exploration, Jain Irrigation, GTL and Nutek.

For short term I am buying some Put Options of Infosys. I am not expecting the results to be that good and there would be some correction in the price. I bought some puts for Jan at premium of 108 for strike 2400. I expect after result the premium to go up to 150.

Another options to look for is IFCI call options strike price 37.5 for Jan. They are looking pretty good.

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.