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Monday, February 22, 2010

Stocks Which have Lost While Indian Stock Market Doubled Up

This is an article from MoneyLife magazine which I am reproducing here for the benefit of Indian Stock market investor.

From a low of 8,160 on 9 March 2009, the Sensex has surged over 100%, taking with it most companies on a dizzying price rise. However, several companies have missed the boat completely, actually moving in the opposite direction.

With the overall rally now losing steam, these stocks look set to ride the cold wave a while longer.

Between 9 March 2009 and 27 January 2010, the Sensex has shot upwards from 8,160 to 16,290, a phenomenal rise of 100%. However, out of the 1,328 companies in the Moneylife database, 14 companies have shown negative stock price growth.

Among the prominent losers are Austral Coke & Projects and Ackruti City, which have crashed 56% and 51%, respectively, during this bull phase. Vishal Information Technologies, Anu’s Laboratories and Bang Overseas have also lost out in a big way, having declined 45%, 43% and 39%, respectively.

Cranes Software, which was trading at Rs38.70 on 9 March 2009, is now at Rs23.85, a fall of 38% despite its fame as a different kind of software company. K Sera Sera Productions and Northgate Technologies also shared the same fate, having shot downwards by 26% and 22%, respectively.

Among the larger companies, Tata Communications and Orissa Sponge Iron & Steel have disappointed investors. Tata Communications has slipped 21% to Rs322.70 from Rs406.50 at the start of the period. Orissa Sponge Iron & Steel has fallen 18% over the same period.

Other laggards include Rasoi, Disa India and GSL Nova Petrochemicals, which have fallen 13%, 11% and 10%, respectively over this period. The share price of Lotus Eye Care Hospital remained virtually unchanged during this period.

One of the reasons these stocks have failed to capture the upsurge in the markets since last year is their dubious antecedents. Austral Coke made an IPO under a controversy—its promoters were seemingly locked in a legal war with the promoters of Gujarat NRE Coke. Ackruti City’s accounting was impenetrable.

Bang Overseas and K Sera Sera were never known for high quality of management.

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