DIWALI Pick 2018

SHAH STOCKS wishes every Investor a very Happy Diwali and a New Year.!!!

As everyone knows Shah Stocks does share its research on special occasions. Stocks recommended for last 3 years include.

2015: Nucleus Software. Returns: 3x (High of Rs. 601, recommended at Rs. 185.00)]
2016: RamRatna Wires. Returns: 3x (High of Rs 244 after recommended at Rs 60.00) 
2017: Shivam Autotech. Returns: 0.5x (At Low of Rs 50.00, recommended at Rs 100.00)

Nucleus and Ramratna Wires are giving more than 300% returns but last year pick Shivam Auto is almost 50% down. Shivam Auto is a HERO Group company and its a pity, shareholders lost their capital in such a good company over last 1 year but I believe a moment will come when the company is gonna bounce much stronger.

Please note here that "There is always risk associated when we work in stock markets. Even though we work really hard and go through tiniest detail before recommending any stock, out stock analysis may fail sometimes."

So this years Diwali Pick is a company which is a top manufacturer of Winding Wires in India, Precision Wires India Ltd.

CMP: Rs 235.00



About Company:

• Precision Wires India Ltd (PWIL) headquartered in Mumbai is the largest manufacturer of Copper Winding Wires in the country and uses a combination of Indian skill and foreign technology. PWIL has three manufacturing facilities, located at Silvassa, Dadra Nagar Haveli and Palej, Gujarat. 

• Installed capacity of over 35000 MT/year being increased to about 45000 MT/year by 2019, company is the largest producers of Winding Wires in South Asia. Company’s state-of-the-art facilities at Silvassa manufacture a wide range of products including Enamelled Round and Rectangular Copper Winding Wires, Continuously Transposed Conductors (CTC) and Paper/Mica/Nomex® Insulated Copper Conductors (PICC), which are used across the globe by the electrical/electronics industry.

Investment Rationale:

• ·        The company is all set to deliver the output from the extended capacity.

• ·        The company’s clientele is Huge and it involves all the names, one can think of. Many leading large and medium electrical and electronic equipment makers in India and abroad are among the customers of Precision Wires Limited. The company has been increasingly targeting overseas markets over the past few years.
  

• ·        The sector too is at the sweetest spot; the government being very much dedicated towards the growth of the industries. Infra space like airports, metros is also a great boost for the company.

• ·        The company has been very much investor friendly. It regularly pays dividend, last year being the highest; Rs 4.50 to be precise.

• ·        The company’s fundamentals have been growing always. Company’s management has done a recommendable job and that shows the potential of the company.

• ·        Impressively the company has no long term debt, which makes it a great stock even for a long term.

COMPARISON of Results:

•                           If compared last quarter QoQ, sales grew by 70%; from 241 crores to 419 crores. The Profitability has not grew much because of the high price of the Raw Materials consumed. We expect it to rise continuously as the expansion is supposed to get complete in this fiscal year.

• ·        P/E Ratio is 17.00 compared to Industry P/E of 22.00

• ·        The company’s fundamentals will further improve once the expansion is complete. The company being one of the most attractive in valuations as well as having competitive edge in business; makes it the most attractive stock to invest in.  
• 

•      September Quarter results are out and company posted good set of numbers posted. Sales came at around Rs 431.8 crores vs Rs 306.76 crores previous year. Net Profit increased to Rs 10.18 crores vs 7.66 crores, making an EPS of Rs 4.40 vs Rs 3.31 in previous year.

OUTLOOK/Verdict:

Looking at the future outlook, Shah Stocks expects the stock price to reach target of Rs 350.00 in next 6-9 months. Also looking at the investor friendly management, one can hold the stock and keep it portfolio for a long term. This company has all the potential to be MULTIBAGGER. 

Disclaimer: Equity Market comes with risk associated with it, Invest accordingly. Shah Stocks recommends a BUY in this counter with very limited risk associated to it. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. We don’t accept any responsibility for any Loss/ Profit arising from your decisions. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.

 

CRUDE OIL Impact on Oil Marketing Companies

Hello Investors, 

Its been a while, Shah Stocks hasnt been able to publish a Blog but all the followers are regularly updated via Whatsapp Broadcast message. We will try to update Blog weekly from next month, as we are expanding and expanding for our Investors community. An investor can whatsapp us on number +91-8849380276 for any of the queries related to Investments.

Shah Stocks has already started Q&A session where any Investor can ask their query related to his/her investments, previously held shares, or if they have dount regarding any stock. Shah Stocks will try to help you with your queries getting answered. Investor will be able to get a clear and crisp view for next action on that particular stock.

CRUDE OIL price impact:

Now, looking at the past few months movement of Crude Price, it has been a nightmare for many of the companies to post good results. Reason is simple, major raw material for many companies in their products is Crude Oil. 

Even OMC's have taken a hit, shedding more than 50% from their share price from top. So now, is it the right time to enter in those companies? Answer is Yes, we can start looking to Invest in these companies slowly.

Today, Oil prices tumble the most; even after having a biggest weekly supply drop in nearly 2 years. This means, there will be changes in the shares to BUY. IOCL, BPCL, HPCL will surely be on a BUY list. These companies have already been hit very hard and are now too much undervalued. 

Crude has fallen almost 5% today which will be a Huge trigger for all OMC's (Oil Marketing Companies). What we want to point out is the best stock in this category. Fundamentally and valuations wise, all of these 3 stocks are great. 

But looking at technicals, HPCL has the crucial support at Rs 255.00 and its now trading at Rs 265.00. dividend Yield of 11% is surely an attractive thing at the moment

Indian Oil has similar kind of story. Its trading at around Rs 155 and the quick support at Rs 144.00. This support is much better than HPCL. So I would prefer Indian Oil over HPCL. Higher Dividend Yield of 12% will surley attract investors more here.

BPCL is still under its support levels and needs to close above Rs 380.00 where its support lies. Dividend Yield is lowest among 3 companies at around 8%.

Looking at all the factors, Shah Stocks would prefer buying Indian Oil and HPCL currently over BPCL.

Disclaimer: Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. We don’t accept any responsibility for any Loss/ Profit arising from your decisions. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.

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Eon Electric Analysis-Part 2

Hello Investors once again,

As I blogged in earlier post, I am positive on Eon Electric as it is terribly undervalued. In this post, I will show some analysis based on their numbers. 

Lets first take the company Advanced Metering Technology Ltd. (ATML).

The company yesterday posted the numbers. Everyone knows the amazing returns share market has in last 1 year and so has the Mutual Funds. The company posted Other Income of more than Rs 6 crores which was. So, even though the market were bleeding real RED today (DOWN 722 pts), the stock was able to close 20% UP. This is the small things that matter to see if the investments done are worth.

Now these companies Eon Electric and AMTL has nice investments already done in Mutual Funds and in fact the value of these funds investments are larger than the company's market cap. 

Looking at Fundamentals now. The promoters have been increasing the holding in the company in last few quarters. They now hold 60% of the company which was 55% in last year.

Sales has been decreasing but over Rs 100 crores in last 5 years.

Pros: 

• Company has reduced debt.
• Company is virtually debt free.
• Stock is trading at 0.19 times its book value
• Market value of investments Rs.174.39 Cr. is more than the Market Cap Rs.66.73 Cr. 
• Promoters increased stake.

Cons:

• The company has delivered a poor growth of -12.08% over past five years.
• Company has shown losses in previous quarters.
• CMD V. P. Mahendru had very optimistic numbers which he has failed to achieve in past.

Products Pros:

• Attached brand value.
• Internet activeness and the brand following .
• Ease of availability of products.
• Sold at higher Price than competitor's price as they with better quality (as mentioned by management personnel).
• Available on all leading e-commerce sites.

Products Cons:

• Branding costs more and so Expenses will increase.
• Marketing Expense will increase.
• One of the JV failed which is why they stepped out of it.

Verdict: So, looking at all the current scenario's quite happy with the price of the stock that it is available at. The chances of the stock moving upwards is much more and go down is much lesser. Once the brand is established, runup will be amazing from here. So recommending this one for Long Term Investment. If the investors find a turnaround story here, the share's original potential will be unlocked.

Links: Videos related to Eon Electric: Eon Electric Videos

||| HAPPY Investing |||

Investment Idea: EON ELECTRIC Ltd

Hello Investors,

The company which I am gonna refer today is Eon Electric Ltd. It has a strong strong background and it has always been the frontrunner in Indian Electric Industry. The company was formerly named as Indo-Asian Fusegears. The company was a collective business of family with a brand name and it has had an amazing decades of business. The business finally got divided for diversification and gave birth to 2 new companies ,

1. Eon Electric Ltd. : First company to open a plant of LED lighting in India.
2. AMTL: Advanced Metering Tech Ltd.

Key points to consider in Eon Electric Ltd. :

1. The company has got amazing investments done in Mutual Funds which is approximately that of the company's market cap.

2. Company has promised a High revenue target but what I have witnessed is that the management was too optimistic and failed to deliver as promised. This has made me suspicious and cautious regarding this.

3. Company has always reached a milestone of opening a first plant of any new technology available in electric industry. e.g. CFL, LED, etc.

4. Diversification of Business: 

• Batteries/Chargers, 
• LED Lightings, 
• Wires and Cables, 
• Fans, 
• Geysers. 

5. Joint Ventures with many Lighting companies.

This post is to show how much undervalued this companies are. This quarter, ATML posted results, nice jump in standalone numbers. Double the csales and the standalone numbers showed EPS of Rs 1.4 vs Loss of Rs 3.41 last year, same quarter. Other Income of the company is around Rs 6.5 crores. Company has market cap of just Rs 66.00 crores and its Investment is rs 96 crores.

Now, people might not have heard the name of AMTL but Eon Electric is the company which has tried to expand foots across whole India.

My First Encounter: I came across it first when I bought a battery for my Samsung mobile. The shop owner showed 2 companies, One was but obvious ERD and other was EON. I chose Eon as it was cheaper and warranty period for both the batteries were same and I was going to sell that phone anyway. After I reached home, I searched over the internet to see how the company is and the review of the EON battery products. This is how I found this share. 

Marketing: The company even advertised in Cricket matches one of them is India Srilanka 2012 Series. Marketing at such huge levels definitely shows the company's seriousness towards the growth. Company has amazing potential and it really needs much better valuations.

Details: 
Eon Electric's Market Cap: Rs 67 crores.
Its investment valued presently: Rs 97 crores. 

As per Vaniya Budhdhi, if I invest here, I am getting a company's share totally free + 30% increment in my money invested just by considering its investments. If the company sells its investment in Mutual Fund, my money will be recovered. 

Also, the company has tied up with big real estate players like Anjara and I appreciate the move towards this place. There has been no lag in Marketing of company's products. The company is following the footprints of Havells company and have also hired management personnel from Havells. In future if everything goes well, I see the company competing with such big players.

Reviews: People have been satisfied with the products that company is selling. The company  are also selling the products online via e-commerce sites

Company has numerous JV's which is making it more complex for me to analyse. But surely this is the stock that has to be kept on radar. 

At this valuations, around Rs 42.00, I will categorize this stock as 'LOW Risk' with 'HIGH Returns' Opportunity.

Check the company's website: www.eonelectric.com
Check Facebook's page of Eon Electric : https://www.facebook.com/EonElectric




For more info regarding pros and cons and detailed report check my next post: Eon Electric Review
 
Suggestions and discussions are welcomed.

Stocks to BUY now

Again updating and adding Undervalued stocks that you can buy at current levels.


IFGL Refractories:

P/E 14.16 vs Industry P/E of 32.9
Company is terribly Undervalued. The company has nice amount of subsidiaries performing exceptionally well and the growth history is really encouraging. Big name of the group and diversified business makes it more attractive.
Company's website: www.ifglref.com

Archid Ply

P/E 14.38 vs Industry P/E of 40.90
Company has nice business model and has penetrated interior markets with good branding. Though its market share is not one of the best but it has increased significantly over last 3 years and the stock has remained undervalued. Add the stock at around Rs 30.00 levels for Long term. Nice returns expected.
Website: http://www.archidply.com/

JVL Agro

P/E 3.27 vs Industry P/E of 14.29
Company's Jhoola brand is famous in Bihar and UP side. Also the company has nice assets and they are diving into business of food park. All the clearances have been made and the work is in progress. In coming years, the copany will surely be benefited from it and there is a huge scope and potential for it to move up.
Website: http://www.jvlagro.com/

Ganesh Housing

P/E 8.11 vs Industry P/E of 29.3
One of the biggest real estate player in the most influential city of Ahemadabad. The company has nice projects going on and huge landbank with it. It also has IT SEZ Million Minds coming up with GIFT City in progress. The promoters have also been releasing pledged shares recently. The company at this level is a great BUY for a long term. Company regularly pays dividend even though it has debt. Many FII's and DII's have entered here due to the growth story seen in Ahemadabad.
Website: http://www.ganeshhousing.com/ 

Hilton Metal Forging Ltd

P/E 16.50 vs Industry P/E of 58.52
The company has nice export track record and have been a big player overseas. Most of the company sales is outside India, export oriented and so its a big player overseas. The company is trading very cheaply. The only problem with the company share is DRY Volumes. Otherwise the company has great potential in coming 2 years as the company is also into defence segment. Keep an eye on it.
Website: http://www.hiltonmetal.com/

Thank you

STOCKS to BUY in this correction.

I have already suggested one stock that is undervalued and wrote a blog few days back in which I have shown whole analysis of the company. That's Usher Agro.
In that post, you will be able to get every required information why its is a BUY at current levels. You can check here http://shahstocks.blogspot.in/2015/03/stock-analysis-usher-agro-ltd.html

So list is here:

Usher Agro 

P/E : 2.10 vs Industry P/E of 51.06. 
Imagine the upmove it can give, The company has shown extra ordinary growth in last few years and expanded its capacity with huge volumes. Even started new manufacturing plants with different products which are n demand. Owner of a famous brand 'Rasoi Raja'.
Website: http://www.usheragro.com/

Ganesh Housing  

P/E is 8.44 vs Industry P/E is 29.69. 
Promoters on spree to release theie pledged shares. A huge positive. One of the pioneer company in Ahemadabad with nice set of projects in the city. Even clearance for GIFT City approvals last Sunday will be very beneficial to Ganesh Housing
Website: http://www.ganeshhousing.com

Sudar Industries (Risk involved) 

P/E is 0.92 vs industry P/E of 49.03
A rare share which has below P/E below 1. EPS of last year is more than the current share price. Diversified business due to risk involved in textile industry. I wrote Risk Involved due to high pledged shares of the promoter and the shortage of cash in the company's balance sheet.
Website: http://www.sudarindustries.com/

Neo Corp 

P/E at 5.00 vs Industry P/E of 26.76. 
Well managed and a big name in packaging industry. Company has also incorporated many subsidiaries which has shown awesome growth and has turnover of over Rs 1200 crores last fiscal and has market cap is mere 111 crores. 
Website: http://www.neocorp.co.in/

Ruby Mills  

P/E 2.70 vs Industry P/E of 7.69.
Company has good presence over the years. The company owns property of Ruby Tower which is first skyscraper in Dadar, Mumbai which is a prime location for many offices. Ruby Tower has corporate offices that the company has given on rent/lease. The value of that property itself would be more than Rs 1000 crores. Company is projecting similar project with spare land available next to Ruby Towers.
Website: http://www.rubymills.com/
http://theruby.in/home.html


Panacea Biotec 

Great R&D Company with nice assets and brand value. Nice Tie-Ups  in last quarter and the order inflow started from worlds best organizations for the vaccines.
Check why I have recommended strong BUY on it: Panacea Biotec Stock Analysis

Will be adding more stocks as and when I get time. Hope the information was useful. Also do contact me if you want more investment ideas.
Another stocks which are undervalued in another post: http://shahstocks.blogspot.com/2015/03/stocks-to-buy-now.html

Thank you