BSE SENSEX has rose by 13.4% in past one quarter. BSE Mid cap index has increased by 13.1% during the same period and BSE Small cap index rose by 12.9%. Is the BSE Small cap index available at cheap? Has it not risen as much as it should have? How would small cap stocks perform in near future?
Ok. BSE Small cap has increased least among all three if we look at quarterly performance. Let’s change our time period. Let’s look at the current financial year i.e. FY 2011. Last two quarters. During this period, BSE SENSEX rose by 14% and BSE Mid cap rose by 19%. BSE Small cap has rose by 21% in past 6 months. Now the numbers have changed completely.
Let’s look at the price to earnings ratio which is widely accepted parameter when we compare the index. BSE Small cap index is trading at a price to earnings ratio of ~ 17.6 and BSE SENSEX is trading at 23.8 These ratios are definitely higher than historical ratios of 16 and this fact makes the value investors little uncomfortable, especially if you look at SENSEX earnings. Whatever we are seeing in markets right now is a rally on the back of money being poured in by FII’s. I think people are getting over optimistic on this rally. And big investors over excited about optimistic economic conditions.
Small cap stocks have been beaten down quite a bit in past few days on account of real estate loan scam and such events. There are many good small cap stocks out there and we should now be hunting for those good small cap stocks to buy for 2011 for good returns. I have started publishing best stocks to buy in 2011 and Best Sectors To Invest For 2011. I would be sharing good stock ideas here, feel free to discuss your suggestions too.
SENSEX would see good levels around 23000-24000 by the end of year 2011 on the back of growth rate of Indian economy but we might see some correction before that. Developed markets worldwide do not have any good rate of returns so FII's would definitely be investing in India.
Small investors need to be little cautious. This does not mean you should sell everything you have but keep some cash with you. Maybe 60 – 40 % (60 invested, 40 cash) would be a good idea at this point. This is my personal opinion. Feel free to express yourself using comment form below.
Greed melts A2Z Maintenance IPO on debut by 18%
A2Z Maintenance & Engineering Services (A2Z) IPO completely disappointed investors on it's first day of debut stock trades. The stock has lost almost 18% in it's first day of trading. A2Z is backed by well known stock market broker and investor, Rakesh Jhunjhunwala.
The stock closed 17.77 per cent lower to close the stock trades at Rs 328.90 on BSE, as compared to its IPO price of Rs 400. During the day, the stock fell 20.33 per cent to hit a low of Rs 318.65.
The initial public offer (IPO) of A2Z had completely failed to enthuse investors and was not even fully-subscribed since it was not at all priced well. In fact promoters clearly tried to make money out of this by overpricing it. The reason must have been to take benefit of Rakesh Jhunjhunwala's name in it.
Rakesh Jhunjhunwala has a 21% stake in A2Z Maintenance & Engineering Services. He is making a whopping 30 times profit by selling part of his holdings through the company’s initial public offering (IPO). The Rs 20 crore initially invested by Rakesh Jhunjhunwala is worth close to Rs 500 crore at the IPO price.
The reason behind failure was pretty clear to understand. Rakesh Jhunjhunwala was making 30 times money he had invested 4 years ago and he wanted to exit partially with all his profits using this overpriced IPO. People were skeptical about IPO valuations and so the IPO was not even fully subscribed. The worries were true, A2Z lost 18% on debut proves it was overpriced and promoters had not left anything on table for IPO Investor.
The question here is, should common investor like you and me really run behind and follow such big investors who are busy making money for themselves? We must analyze the numbers ourselves and take a decision. At last, every big investor in market follows "me first" methodology, accumulates the stock and then declares in public and recommends small investors to buy stock so he can offload it at higher price.
The stock closed 17.77 per cent lower to close the stock trades at Rs 328.90 on BSE, as compared to its IPO price of Rs 400. During the day, the stock fell 20.33 per cent to hit a low of Rs 318.65.
The initial public offer (IPO) of A2Z had completely failed to enthuse investors and was not even fully-subscribed since it was not at all priced well. In fact promoters clearly tried to make money out of this by overpricing it. The reason must have been to take benefit of Rakesh Jhunjhunwala's name in it.
Rakesh Jhunjhunwala has a 21% stake in A2Z Maintenance & Engineering Services. He is making a whopping 30 times profit by selling part of his holdings through the company’s initial public offering (IPO). The Rs 20 crore initially invested by Rakesh Jhunjhunwala is worth close to Rs 500 crore at the IPO price.
The reason behind failure was pretty clear to understand. Rakesh Jhunjhunwala was making 30 times money he had invested 4 years ago and he wanted to exit partially with all his profits using this overpriced IPO. People were skeptical about IPO valuations and so the IPO was not even fully subscribed. The worries were true, A2Z lost 18% on debut proves it was overpriced and promoters had not left anything on table for IPO Investor.
The question here is, should common investor like you and me really run behind and follow such big investors who are busy making money for themselves? We must analyze the numbers ourselves and take a decision. At last, every big investor in market follows "me first" methodology, accumulates the stock and then declares in public and recommends small investors to buy stock so he can offload it at higher price.
Best Sectors & Stocks To Buy For 2011
I am receiving a very good response for the series of stock recommendations, Stocks To Buy In 2011, from all fellow investors and Indian Stocks News readers/subscribers. In such emails, I received a message from Mr. Aditya and he has suggested to discuss the stocks in top down manner, sector wise. In each sector, we can find best three stocks to buy in 2011 and discuss them.
I am reproducing Aditya's message here.
---------------------------------------
hi vinay,
thanks to u for yr great initiative to bring the good analysis of the stocks.
it is really helpful.
your idea to ask from the readers for new stocks for the 2011 is great but as i gone through the posts it will be a long list as every one is having a long favorite list of stocks in my view we can discuss this in top down manner with sector wise and best in that sector u may have a voting form on the site having fields like sector (max 5) and stocks in the sector (max 3) to cut the crap
anyway its only an idea from my side
my pick for the current time will be mic electronics
bye
aditya
----------------------------------------
Certainly we are going to do that. In fact this is in line of what I am about to put up for discussion on Indian Stocks News. I have thought to put up series of discussions for
- Small cap stocks to buy in 2011
- Mid cap stocks to buy in 2011
- Large cap stocks to buy in 2011
and
- Best sectors to invest in 2011
I am also going to put up a form very soon for surveying the best sectors so everyone can vote for the sector they think is best for investment. I would analyze all the stocks that we discuss here from investment point of view and post individual stock analysis here.
Posts in series "Best sector & stocks to buy in 2011" till now
=> Automobile : Best Sectors & Stocks To Buy In 2011
For now, you can either post your comment for best sectors and stocks using below comment form or mail me at vinay at indianstocksnews dot com
Keep watching this space for stock analysis and recommendations for 2011 or alternatively receive an update thru Indian Stocks News email newsletter directly in your mailbox whenever I post here and do not miss on stock ideas.
I am reproducing Aditya's message here.
---------------------------------------
hi vinay,
thanks to u for yr great initiative to bring the good analysis of the stocks.
it is really helpful.
your idea to ask from the readers for new stocks for the 2011 is great but as i gone through the posts it will be a long list as every one is having a long favorite list of stocks in my view we can discuss this in top down manner with sector wise and best in that sector u may have a voting form on the site having fields like sector (max 5) and stocks in the sector (max 3) to cut the crap
anyway its only an idea from my side
my pick for the current time will be mic electronics
bye
aditya
----------------------------------------
Certainly we are going to do that. In fact this is in line of what I am about to put up for discussion on Indian Stocks News. I have thought to put up series of discussions for
- Small cap stocks to buy in 2011
- Mid cap stocks to buy in 2011
- Large cap stocks to buy in 2011
and
- Best sectors to invest in 2011
I am also going to put up a form very soon for surveying the best sectors so everyone can vote for the sector they think is best for investment. I would analyze all the stocks that we discuss here from investment point of view and post individual stock analysis here.
Posts in series "Best sector & stocks to buy in 2011" till now
=> Automobile : Best Sectors & Stocks To Buy In 2011
For now, you can either post your comment for best sectors and stocks using below comment form or mail me at vinay at indianstocksnews dot com
Keep watching this space for stock analysis and recommendations for 2011 or alternatively receive an update thru Indian Stocks News email newsletter directly in your mailbox whenever I post here and do not miss on stock ideas.
Stock To Buy - Delta Corp Ltd. - Is It Really?
Mr. Soundar Rajan, avid Indian Stocks News reader, was the first person to respond the latest series Stocks To Buy In 2011 with his stock ideas for 2011. Delta corp is one of his suggestions. Let's evaluate it and see if it is a stock to buy.
As on 1st February 2011, Goa govt. has ordered to close 2 casinos of the company as per this news in Economic Times. I will post updates upon some clarity and impacts of news.
Company & Business: Delta Corp Ltd. (Formerly Arrow Webtex Limited) is engaged in the business of textiles and real estate development / consultancy. Having started as a pure textile player, Delta Corp Limited has transformed into a diversified company, with interests in real estate (in India as well as East Africa), gaming and entertainment, and hospitality. Delta Corp has de-merged its textile business into a new entity which is now called Arrow Textiles Limited.
Delta Corp is promoted by Mr. Jaydev Mody, an eminent and successful Indian entrepreneur and erstwhile Managing Director of Peninsula Land Limited ('PLL') (promoted by the Ashok Piramal Group).
Delta Corp along with its subsidiaries currently operates in the following lines of businesses:
Entertainment and Gaming: Delta Corp is the largest gaming company in India (offering over one thousand gaming positions) and the only listed company in this space. The Company is an early entrant in this space and has attained leadership position in a short span of time. The Company owns and operates 3 offshore live gaming casinos in Goa on River Mandovi – Casino Royale, Caravela and King’s Casino. Delta Corp owns 3 out of the 6 offshore live gaming casino licenses issued by the Government of Goa.
Real Estate: Through its subsidiaries and JVs, company intends to ride the growth wave of development in the East African countries. Delta Corp has formed a joint venture company with Reliance Industries Limited (“RIL Group”), namely, Delta Corp East Africa Limited (“DCEAL”), through its wholly owned subsidiary Delta Pan Africa Limited (“DPAL”). DCEAL has already acquired close to 803,720 sq-ft of land with a development potential of closed to 2 million sq-ft. It has planned a combination of commercial office space development, retail and hotel projects.
Hospitality Business: Delta Corp has formed a JV with Peninsula Land limited i.e. PLL Delta Hotel Limited (‘PLLDHL’). Going forward, PLLDHL intends to develop 3/4 star 100 bed hotels in various urban locations in India primarily in Southern and Western India.
Checkout the sept. quarter result, you can see the multifold jump in revenues (275.55 against 33.69 crores same quarter previous year). This, I think is due to the acquisitions and sell off company executed in this quarter. Look at the number of acquisitions company done in point no. 4 in this result pdf.
Now, a bit about Delts corp's balance sheet. In latest chairman's report, he has mentioned that the money they got from selling property in Prabhadevi, Mumbai, has een used to pay off the debt they had. Now they have total debt of only 67.75 crores. So debt part is not a thing to worry much about. Debt to equity ratio stands at 0.25
Company's operating profit margin (61%) and net profit margin (50.12%) is tremendously profitable for company and so investors!
If we have to believe the news that a bunch of investors including stock broker Rakesh Jhunjhunwala and Radhakrishna Damani have picked up an 11% stake in Delta Corporation Ltd. for Rs200 crore and Rakesh Jhunjhunwala will join the Delta Corp. board.
Looking at company's recent acquisitions, partnerships with RIL and Peninsula for business and big investors parking their money, I sense the possibilities of big growth coming for company. Although the stock at present valuations with book value only Rs. 15.31 and stock price at Rs. 95 seems costly from value investing perspectives, this could be the premium put on stock due to anticipated growth in future. Buying stocks at this level is bit expensive but at lower levels, it is certainly attractive for future growth. Promoters hold bit more than 48%.
Reading chairman's message is advisable.
If one does wants to be part of this anticipated growth with good promoter and big investors for long run, he/she may buy stocks of Delta for long term. But remember, it is only for long term, maybe 3 - 5 years or more.
As on 1st February 2011, Goa govt. has ordered to close 2 casinos of the company as per this news in Economic Times. I will post updates upon some clarity and impacts of news.
Company & Business: Delta Corp Ltd. (Formerly Arrow Webtex Limited) is engaged in the business of textiles and real estate development / consultancy. Having started as a pure textile player, Delta Corp Limited has transformed into a diversified company, with interests in real estate (in India as well as East Africa), gaming and entertainment, and hospitality. Delta Corp has de-merged its textile business into a new entity which is now called Arrow Textiles Limited.
Delta Corp is promoted by Mr. Jaydev Mody, an eminent and successful Indian entrepreneur and erstwhile Managing Director of Peninsula Land Limited ('PLL') (promoted by the Ashok Piramal Group).
Delta Corp along with its subsidiaries currently operates in the following lines of businesses:
Entertainment and Gaming: Delta Corp is the largest gaming company in India (offering over one thousand gaming positions) and the only listed company in this space. The Company is an early entrant in this space and has attained leadership position in a short span of time. The Company owns and operates 3 offshore live gaming casinos in Goa on River Mandovi – Casino Royale, Caravela and King’s Casino. Delta Corp owns 3 out of the 6 offshore live gaming casino licenses issued by the Government of Goa.
Real Estate: Through its subsidiaries and JVs, company intends to ride the growth wave of development in the East African countries. Delta Corp has formed a joint venture company with Reliance Industries Limited (“RIL Group”), namely, Delta Corp East Africa Limited (“DCEAL”), through its wholly owned subsidiary Delta Pan Africa Limited (“DPAL”). DCEAL has already acquired close to 803,720 sq-ft of land with a development potential of closed to 2 million sq-ft. It has planned a combination of commercial office space development, retail and hotel projects.
Hospitality Business: Delta Corp has formed a JV with Peninsula Land limited i.e. PLL Delta Hotel Limited (‘PLLDHL’). Going forward, PLLDHL intends to develop 3/4 star 100 bed hotels in various urban locations in India primarily in Southern and Western India.
Checkout the sept. quarter result, you can see the multifold jump in revenues (275.55 against 33.69 crores same quarter previous year). This, I think is due to the acquisitions and sell off company executed in this quarter. Look at the number of acquisitions company done in point no. 4 in this result pdf.
Now, a bit about Delts corp's balance sheet. In latest chairman's report, he has mentioned that the money they got from selling property in Prabhadevi, Mumbai, has een used to pay off the debt they had. Now they have total debt of only 67.75 crores. So debt part is not a thing to worry much about. Debt to equity ratio stands at 0.25
Company's operating profit margin (61%) and net profit margin (50.12%) is tremendously profitable for company and so investors!
If we have to believe the news that a bunch of investors including stock broker Rakesh Jhunjhunwala and Radhakrishna Damani have picked up an 11% stake in Delta Corporation Ltd. for Rs200 crore and Rakesh Jhunjhunwala will join the Delta Corp. board.
Looking at company's recent acquisitions, partnerships with RIL and Peninsula for business and big investors parking their money, I sense the possibilities of big growth coming for company. Although the stock at present valuations with book value only Rs. 15.31 and stock price at Rs. 95 seems costly from value investing perspectives, this could be the premium put on stock due to anticipated growth in future. Buying stocks at this level is bit expensive but at lower levels, it is certainly attractive for future growth. Promoters hold bit more than 48%.
Reading chairman's message is advisable.
If one does wants to be part of this anticipated growth with good promoter and big investors for long run, he/she may buy stocks of Delta for long term. But remember, it is only for long term, maybe 3 - 5 years or more.
Stocks To Buy In 2011
Dear Investors,
We have experienced a volatile year 2010 for stock markets and we are on the verge of saying goodbye to it. We have seen BSE SENSEX starting the year at 17,500 only to dip to 15,500, then jumping to 18,000 levels, again back to 16,000 then touching historical highs of 21,000 and again a dip of 2,000 points to 19,000 followed by 1000 points rise to 20,000 with another dip of 1000 points ... hufff ... tiring but exciting roller coaster like ride.
As I believe, for long term investors, these ups and down should not matter since Indian growth story is intact and India is still growing at 9% (GDP rate). What we should be doing is, concentrate on individual stocks to buy in 2011 which would make us money in long run.
I have few stock ideas for 2011 which I would be discussing on Indian Stocks News in this series. But I may not and can not provide attention to all the good stocks to buy in stock market. So I am inviting all of you to share and discuss the best stocks to buy in 2011 which have potential to fetch manifold returns in long term. I received tremendous response last year and you can watch it here: Best Stocks To Buy For 2010 - Let's Share Ideas
You may have views on specific sectors for 2011 which investors should target, stocks to buy and even stocks to avoid and sector/s to avoid for 2011. I would welcome every stock idea and publish it with your views, opinion and of course your name. :)
Keep watching this space for updates on best stocks to buy in 2011. Alternatively, subscribe to Indian Stocks News email newsletter to get the post updates directly in your mailbox and do not miss on stock ideas.
You may send your stock ideas here: vinay at indianstocksnews.com or post them in below comment box. I would analyze each and publish the analysis with name of contributor on Indian Stocks News.
Let's collaborate on ideas to invest better!
Stock Ideas for 2011 discussed till now:
Large cap growth stock to buy - BHEL
Small cap growth stock analysis - Kabra extrusion technik
Selan Exploration : Stock to buy in 2011
Buy stocks of JSW Steel for medium to long term
Stock to buy for long term - Blue Star Limited
Buy stocks of Exide Industries at every dip in its stock price
Stock To Buy - Delta Corp Ltd. - Is It Really?
We have experienced a volatile year 2010 for stock markets and we are on the verge of saying goodbye to it. We have seen BSE SENSEX starting the year at 17,500 only to dip to 15,500, then jumping to 18,000 levels, again back to 16,000 then touching historical highs of 21,000 and again a dip of 2,000 points to 19,000 followed by 1000 points rise to 20,000 with another dip of 1000 points ... hufff ... tiring but exciting roller coaster like ride.
As I believe, for long term investors, these ups and down should not matter since Indian growth story is intact and India is still growing at 9% (GDP rate). What we should be doing is, concentrate on individual stocks to buy in 2011 which would make us money in long run.
I have few stock ideas for 2011 which I would be discussing on Indian Stocks News in this series. But I may not and can not provide attention to all the good stocks to buy in stock market. So I am inviting all of you to share and discuss the best stocks to buy in 2011 which have potential to fetch manifold returns in long term. I received tremendous response last year and you can watch it here: Best Stocks To Buy For 2010 - Let's Share Ideas
You may have views on specific sectors for 2011 which investors should target, stocks to buy and even stocks to avoid and sector/s to avoid for 2011. I would welcome every stock idea and publish it with your views, opinion and of course your name. :)
Keep watching this space for updates on best stocks to buy in 2011. Alternatively, subscribe to Indian Stocks News email newsletter to get the post updates directly in your mailbox and do not miss on stock ideas.
You may send your stock ideas here: vinay at indianstocksnews.com or post them in below comment box. I would analyze each and publish the analysis with name of contributor on Indian Stocks News.
Let's collaborate on ideas to invest better!
Stock Ideas for 2011 discussed till now:
Large cap growth stock to buy - BHEL
Small cap growth stock analysis - Kabra extrusion technik
Selan Exploration : Stock to buy in 2011
Buy stocks of JSW Steel for medium to long term
Stock to buy for long term - Blue Star Limited
Buy stocks of Exide Industries at every dip in its stock price
Stock To Buy - Delta Corp Ltd. - Is It Really?
How To Pick Right Stocks - Rakesh Jhunjhunwala
Checkout Ace investor in Indian stocks markets, Rakesh Jhunjhunwala talking on how to pick right stocks for long term investment.
Checkout: Rakesh Jhunjhunwala Portfolio
Checkout: Rakesh Jhunjhunwala Portfolio
A2Z Maintenance and Engineering IPO Opens On 8th
The initial public offering of A2Z Maintenance and Engineering is opening tomorrow. The company is planning to raise about Rs 860 crore through the issue. Rakesh jhunjhunwala is one of the biggest investor in this company.
The issue comprises a fresh issue of equity shares aggregating to Rs 675 crore and an offer for sale of 45.5 lakh shares by the selling shareholders.
Rakesh Jhunjhunwala owns 25 lakh shares in the company (30 per cent stake). He is selling 5 lakh shares through the issue. He invested in the company in 2006 below Rs 14 a piece.
The price band for the issue has been fixed at Rs 400-410 a share. Proceeds from the issue will be used to invest in a biomass-based power generation project as well as for capital expenditure and repayment of a loan granted by L&T Infrastructure Finance Company.
The issue closes on December 10.
The issue comprises a fresh issue of equity shares aggregating to Rs 675 crore and an offer for sale of 45.5 lakh shares by the selling shareholders.
Rakesh Jhunjhunwala owns 25 lakh shares in the company (30 per cent stake). He is selling 5 lakh shares through the issue. He invested in the company in 2006 below Rs 14 a piece.
The price band for the issue has been fixed at Rs 400-410 a share. Proceeds from the issue will be used to invest in a biomass-based power generation project as well as for capital expenditure and repayment of a loan granted by L&T Infrastructure Finance Company.
The issue closes on December 10.
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