ITC Results and Valuation

ITC Q4 results of 2011 has beaten analyst estimates. Net sales of the company surged 15.5% to Rs. 5836.26 crores while net profit surged around 25% Rs. 1281.5 crores. 

For fisal year 2011 ITC reported total revenue of Rs. 21,344.5 crores and net profit of Rs. 4987.6 crores an increase of 16% and 23% over previous year on revenue and profits resepectively.

At the market price of Rs 186 the company commands a market capitalization of Rs. 1,43,775 Crores. The stock is trading at a PE multiple of approximately 29 which is slightly on the higher side compared to other diversified conglomerates.

On the shareholder's retun perspective the stock has given phenomenal returns in past three years. The stock has given more than 64% return since may 2008, and has outperformed SENSEX by wide margin.

Bharti Airtel added 3 Million 3G subscribers till date

3G sbscription in India has shown good growth since its launch. Around 9 million consumers have already taken a 3G mobile connection since the services were launched in the country four months ago.

Bharti Airtel cornered most with 3 million subscribers followed by Tata DoCoMo with 1.5 million users.

Idea Cellular, Vodafone and BSNL have over a million 3G customers each.

Reliance Communications did not give out its numbers but sources said that it also has close to a million 3G connections.

Telecom operators in India are targeting around 100 million 3G connections by 2015.

Technical Analysis vs. Fundamental Analysis

Difference between Fundamental & Technical Analysis

- Fundamental analysis seeks to determine a future stock price by understanding and measuring the objective "value" of equity. In contrast the study of stock charts, known as technical analysis, is based on the belief that the past action of the market itself will determine the future course of prices.

- Technical analysts try to forecast short term shifts in supply and demand that will affect the market price of a security and economy related information as fundamentalists do.

What is Dow Theory - Explains InvestorZclub

Dow theory principles

The Dow Theory says that the market has three simultaneous movements.

The most important movement is called the primary trend, which is a broad upward or

What is Technical Analysis? - Explains InvestorZclub

Technical Analysis Definition

- Technical analysis is the study of stock price behavior by analyzing its chart.

- Technical analysis is done to uncover trends in stock and the Markets in general.

- Technical analysis helps in taking advantage of trends. With this the investors have the   opportunity to

LinkedIn get Listed on NYSE, Stock doubled on debut

LinkedIn Corp.'s initial public offering on Wednesday night was priced at $45 per share, at the high end of the company's initial target. The company raised $353 million in an IPO that valued it at $4.3 billion. That's the largest valuation for a U.S. Internet company since Google went public in 2004.

LinkedIn's stock more than doubled in its market debut on Thursday because of huge investor demand for the first major U.S. social networking company to go public, valuaing it at a market cap of more than $9 billion.

Over the past 12 months, LinkedIn has made about 7 cents per share. At $100 investors are paying more than thousand times its last year earning per share, which resembles the days of tech bubble of 2000.

LinkedIn made $94 million in the first quarter of 2011, and its net income was $15.4 million in 2010. Thursday’s IPO made LinkedIn chief executive Reid Hoffman a billionare. His personal stake is now valued at $1.6 billion.

Jet Airways Results - Pares loss in fiscal 2011

Jet Airways posted a consolidated net loss of Rs 86 crore, a vast improvement over Rs 420 crore loss posted a year ago.

Total income of the company increased 20.34% to Rs 14,726.98 crore for the quarter under review from Rs 12,238.06 crore.

Airline stocks in India has been severly underperforming because of rising crude prices. Tough environemnt since past 3 years has made Indian airline companies much more efficient and competitive. Bigger companies such as Jet Airways, Indigo and Kingfisher Airlines have been constantly increasing their revenues and market share. If crude prices come down Jet Airways might give phenomenal return from the current levels as the stock price of the company has fallen substantially from their recent peaks and has been trading at significant discount to its asset/intrinsic value.

Some key metric for Jet Airways is given below:

CMP as on 19th May 2011 - Rs. 458
52 Week High / Low - 926 / 392
Market Cap - Rs. 3954 Crores
Market Cap / Sale - 0.27

Jet Airways Total no of fleets in Operation is 97 while orders for additional 41 fleets have already been placed.

Telecom Operators subscriber addition in April 2011

Telecom Operators market share in India as on April 2011 remained almost same as that March 2011. Together the GSM operators added 11 million customers in April 2011.

Bharti Airtel added 2.41 Million customers while vodafone added 2.40 Million customers. Idea cellular however cornered most number of GSM subscribers with the addition of 2.45 Million new subscribers.

Aircel added 1.1 Million customers while BSNL added 6.8 lakh subscribers.

New 52 Week Low Stocks - BSE A Group

BSE A group stocks that hit fresh 52 week low as on 19th May 2011

Company	New Low	52 Week High	Mkt Cap
Patni Computers	313	624	4218
SAIL	140.2	234.1	57970
Central Bank of India	118.85	190.53	7720
Piramal health	385	599.9	6550
Copyright - InvestorZclub

Contra investors hunt for good quality stocks during unfavourable times. The above list might be helpful for such investors.

Rakesh Jhunjhunwala Strategy

Rakesh Jhunjhunwala, the billionaire investor of dalal street shares his stock picking strategy in the following exclusive interview. He is often dubbed as India's Warren Buffet but he consider himself more like George Soros who is equally sharp at both Investing and Trading. 

Though he has large investment in some companies like Titan & Lupin, he is believed to have accumulated most of the cash from stock trading which is used for buying good quality companies for very long term. Some of the stocks in his portfolio are as high as 20 years old and has delivered some 5000+ percent returns.

Buy Reliance Industries - Recommends InvestorZclub

Reliance Industries stock has corrected significantly in the past few trading sessions and the risk reward ratio has become favourable for fresh investing in the stock.

The Refining and petrochemical business segments of the company is doing very well. The underperformance on its exploration business is expected to get better soon, thanks to the recent deal with British Petroleum. Also the lower gas production from KG basin is expected to get better in next one year which will be a big sentiment booster for the stock.

On the valuation side, at the current market price of around Rs 900,

Warren Buffett Quotes

Warren Buffet Investment Quotes and Criteria: 

1. A public-opinion poll is no substitute for thought.
2. Beware of geeks bearing formulas.
3. Derivatives are financial weapons of mass destruction.
4. I always knew I was going to be rich. I don't think I ever doubted it for a minute.
5. I buy expensive suits. They just look cheap on me.
6. I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
7. If a business does well, the stock eventually follows.
8. If past history was all there was to the game, the richest people would be librarians.
9. In the business world, the rearview mirror is always clearer than the windshield.
10. It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.
11. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
12. Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
13. Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
14. Only when the tide goes out do you discover who's been swimming naked.
15. Price is what you pay. Value is what you get.
16. Risk comes from not knowing what you're doing.
17. Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
18. Someone's sitting in the shade today because someone planted a tree a long time ago.
19. The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
20. The first rule is not to lose. The second rule is not to forget the first rule.
21. The investor of today does not profit from yesterday's growth.

Buy JSW Steel - Recommends Goldman Sachs

Goldman Sachs upgraded JSW Steel to 'buy' from 'neutral' as the recent price correction in the stock has improved its risk-reward ratio. The investment bank kept the price target unchanged at 1,343 rupees.

The stock has corrected 20 percent since November, Goldman Sachs said the stock is trading at a discount to its peers on both earnings and book-based multiples. The company will be in the best position to capitalize on a recovery in steel pricing, the investment bank added.

CMP of JSW Steel as on 17th May was 920. The target price set by the investment bank suggest a return of around 46% from the current levels.

SBI Q4 Result - Profit down 99%, stock tumble

SBI reports dismal Q4 results on account of higher provisioning. Fourth Quarter profit is down almost 99% to Rs 21 Crore vs the expectation of Rs 2963 crores, on higher provisioning.

The Bank has made a provision of Rs 4157 crore versus Rs 2349 crore a year ago.

Following the worse-than-expected results, shares of SBI plunged more than 7% to Rs 2,416 on the NSE.

Coal India becomes the most valuable PSU

Coal India overtakes ONGC to become the most valuable PSU of India. The Market Cap of CIL (Rs 2.5 Lakh Crore) has crossed the Market Cap of ONGC (Rs 2.4 Lakh Crore) and is behind the Reliance (Rs. 3.03 Lakh Crore) by few thousand crores only.

Coal India has acheived this position within just 6 months of listing. It came out with an IPO in October 2010 at a price of Rs 245 per share. The current Market price of CIL as on 17th May 2011 is Rs. 398 and has hit fresh 52 Week high today.

ONGC to share increased subsidy burden

ONGC stock came under severe pressure on the rumors of increased subsidy burden that the company might have to share because of large underrecoveries of oil refining companies.

Upstream oil companies like ONGC, OIL India might have to share 38.5% of the total subsidy burden of approx Rs. 78,000 crores for FY-11.

ONGC is down more than 5% today and is majorly responsible for the weak markets today. If government finalizes this decision then the FPO of ONGC will also be affected.

Peter Lynch Quotes Extract from One up on Wall Street

Peter Lynch, the world most successful fund manager has shared his thought and style of investing in his book ONE UP ON WALL STREET which became one of the best selling books of all time on investing and sold millions of copies all over the world. Following are some of the key thoughts extracted from his book.

• Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business.

• Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.

• Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.

JSW Steel Results & Valuation

JSW Steel has come out with its FY11 numbers and the company has registered net sales of Rs 23,900 crore versus Rs 18,957 crore. Net profit of the company during the period stands at Rs 1754 crore versus Rs 1597 crore.

The current market price of the company is Rs. 926 and is trading at a PE multiple of 11.80.

52 week High/low for the stock is 1400 / 752.

Three year return from the stock as on 16th May 2011 is -3%.

Suzlon expects 26,000 crores Revenue in FY-12

Suzlon Energy reported profits in the fourth quarter of FY-11 giving some hopes to the investors that the worst for the company is probably over.

For the three months ended March 31, Suzlon posted a consolidated net profit of Rs 431.59 crore as compared to a net loss of Rs 188.47 crore in the corresponding period last year.

On yearly basis, its net loss increased to Rs 1,103.43 crore in FY 11 from the previous financial year’s Rs 982.56 crore.

Suzlon Energy is targeting to increase its total revenue by around 44% to Rs. 26,000 crores, and EBIT of around Rs. 2000 crores.

MNP Gainers and Losers in India

Mobile Number Poratbility in India did not had huge impact on the fortunes of the Telecom Companies but some players faired well while some performed badly. Following are the gainers and losers of the MNP game till April 2011.

# Vodafone is the biggest MNP gainer with a net gain of 5,13,259 consumers.

# Bharti is the second biggest MNP gainer with a net gain of 5,06,828 consumers

# Idea was third with a net gain of 4,70,986.

# RCom is the biggest MNP loser, with a combined net loss of 10,70,747 users,

# State-run BSNL lost almost 4,09,028 users

Note: The data as per GSM body Cellular Operators Association of India (COAI) data, as of April 28.

High Dividend Yield Stocks

High Dividend Yield Stocks in India as on May 2011. The list comprises of stocks yielding close to 5% or more.

Company Name	MktCap	CMP	FV	EPS	PE	Div Latest %	Div 1 Year Before %	Div Yield
HCL Infosystems	2305	103	2	10.8	9.5	375	325	7.25
Hero Honda	35484	1776	2	100	17.8	5500	1000	6.19
ITC	144277	186	1	6.1	30.5	1000	370	5.36
Castrol	11647	471	10	20.6	23	250	150	5.31
GHCL	398	40	10	11.7	3.4	20	20	5.03
cosmo films	198	101	10	22	4.6	50	50	4.92

Petrol price hike to impact auto stocks

Steep hike in Petrol prices, to the extent of more than Rs 5 per litre, is definitely going to impact the auto sector growth going forward. The four wheeler segment is expected to feel the maximum brunt in terms of volume growth.

Higher interest cost and rising raw material prices have already been playing spoil sport on the growth and profitability of auto companies and now this steep hike in petrol price has added salt to the wounds of the auto sector.

Stocks of Maruti Suzuki & Tata motors are expected to be under lot of pressure when the markets open on Monday. Fresh investment in this sector should be avoided at this point of time.

PFC FPO price fixed at Rs 203

Power Finance Corporation fixed the price for its follow-on public offer at Rs 203 per share, at the upper end of the price band , raising about Rs 4,650 crore through the issue.The retail investors and employees are given a discount of 5 per cent.

The follow-on public offer (FPO) of the public sector firm was oversubscribed by 4.32 times. The navratna public sector undertaking received bids for 99.12 crore shares as against 22.96 crore shares on offer.

Earlier, the price band for the offer had been fixed at Rs 193-203 per share. The FPO began on May 10. The offer comprised issue of about 172,165,005 fresh equity and sale of around 57,388,335 shares by the government, which has 89 per cent stake in the company.The company plans to use the proceeds to mainly boost its capital base.

Buy NIIT Technologies - Recommends InvestorZclub

NIIT Technologies, an IT solutions company, reported a 34.9% increase in its consolidated revenue for the year-ended March 2011 over that of the previous year at Rs 1,232.3 crore.The net profit of the company increased by 44.2% to Rs 182.2 crore.

The company has declared Rs 7.5 per equity share as dividend. The management is confident of improving margins on the back of its non-linear initiatives. NIIT Technologies is among the few midcap IT companies, which has shown tremendous consistency in their earnings performance in the last few quarters. It has shown a 9.4 per cent compounded quarterly growth rate (CQGR) in revenues and a 7.2 per cent CQGR in net profit.

At the current market price of Rs 194 the stock is trading at a PE multiple of just 6.3. The dividend yield at current market price works out to approximately 4% which is far more than the average dividend yield of other IT companies.

Considering the improved business outlook, lower valuation, high yield and several non-linear initiatives taken by the company, we think that NIIT technologies can be bought on declines with a 1 year target return of at least 50% from the current levels.

Rakesh Jhunjhunwala Quotes

Rakesh Jhunjhunwala, the self made billionaire investor - trader, started his career with just $100 in 1985 has net-worth of around $2 billion in 2015 as per Forbes (http://www.forbes.com/profile/rakesh-jhunjhunwala/). 

He hates to be compared with Warren Buffet but has high regards for George Soros. He has appeared in numerous interviews on TV and newspapers and has candidly shared his mantra for success in stock trading & Investing. Following are the 14 best of his quotes for budding investors, traders and his fans.

1. You have to wait for right moment before investing in stocks. Never invest in any stock without proper idea on its business and fundamentals.
2. First quality every investor should have is optimism. Ups and downs are common in stock movements but patience ultimately wins.
3. Monitor price moments regularly. Don't forget the past history of stocks. Never take decisions in hurry.
4. Believe in markets. Markets always do right thing in long term. Do not speculate.
5. Never miss good investment opportunities. If you find them, grab them with both hands.

LIC Increases stake in BHEL

Life Insurance Corporation (LIC) has acquired additional over 2% stake in power equipment maker BHEL from the market for Rs 2,205 crore to become the second-largest shareholder in the PSU after the government.

LIC, which had 7.022% stake in BHEL prior to this round of acquisition, bought shares during June last year to May 3 this year to take its stake to 9.052%.

The latest shareholding pattern of BHEL is as follows:

GOI - 67.72%
LIC - 9%
ICICI Prudential - 1.4%
The remaining stake in held by FIIs and the public.

BHEL has announced highest-ever turnover of Rs 43,451 crore in 2010-11, registering a growth of 27% over the previous year's. The net profit stood at Rs 6,021 crore, an increase of 40% over the previous year.

BHEL secured orders worth Rs 60,507 crore in 2010-11. The company is expected to achieve a manufacturing capacity of 20,000 Mw by March 2012 from the current level of 15,000 Mw

52 week low stocks - BSE A & B1 Group

Stocks that hit 52 week low on BSE and NSE as on 6th May 2011 and which belongs to A & B1 category of BSE Stocks

Company	New Low Price	52 Week high
SKS Microfinance	331	1490
Power Fin Corp	210	383
United Breweries	171	346
Advanta India	233	531
ICSA India	109	162
Mastek	95	312
Adani Power	107	145
Transport Corp	88	161
Copyright - investorzclub

Crude falls below $100 - Great news for India

Crude oil and most of the other commodities were on free fall on 5th May becasue of weak economic data from Europe. US crude specifically fell the hardest and was down more than $12 at one point of time before closing down $9.44 to settle at $98.26. This suggests the huge speculative position unwinding in the commodity.

Additional pressure came from the news that OPEC was considering raising formal output limits when it meets in June to convince oil markets it wants to bring prices down and reverse the impact of fuel inflation on economic growth.


Oil is definitely on a strong tragectory but this massive fall will keep the crude prices under check for considerable period of time. This augurs well for India which is struggling to keep inflation under check.

JP Morgan downgrades SKS Microfinance

JP Morgan has cut the price target of SKS Microfinance from Rs 550 to Rs 200 due to its poor business outlook.

JP Morgan expects that the company will report a loss of close to 700 crores in the current fiscal year.

The SKS microfinance stock has reacted to this downgrade and the stock has corrected more than 16% to Rs 345 this morning.

Buy IDFC on declines - Recommends Investorzclub

IDFC, the Infrastructure development finance company, is India's largest exclusive Infrastructure finance company. It is directly proportional to India's growth story and hence can be included in your long term portfolio.

Recent RBI action is expected to put some pressure on margins and credit offtake for the company, and the stock price is expected to fall 5-10% from current levels, but considering it's unique business model and catering to the infrastructure sector, it's a classic top down bet for long term.

Investorzclub recommends accumulate rating on IDFC at every decline. At Rs 134 the stock is available at less than 11 times FY-12 earnings and 1.8 times fY-12 PBV.

Magic of compounding - The Millionares Secret

Millionares are not built overnight. Becoming millionare and staying millionare or perhaps become billionare from millionare requires dicipline and master of a trade. There is a very strong invisible natural force which helps us in growing our wealth exponentially and that is called the force of compounding. Most of us either don't know its true benefits or have failed to realize its advantages while doing investments.

Following is given a chart which assumes a one time investment of 1,00,000 bucks at the begining, and then calculates

Buy CESC - Recommends Angel Broking

Angel Broking is bullish on CESC and has recommended buy rating on the stock with a target of Rs 380 in its May 3, 2011 research report. The CMP of CESC is Rs 287. At the CMP, the stock is trading at 6.9x FY-13E EPS and 0.7x FY-13E P/BV. Retail Business and real estate business of CESC is valued by them at Rs 15 & Rs 11 Per share.



Download the full report here - http://www.moneycontrol.com/news_html_files/news_attachment/2011/CESC_AngelBroking_050511.pdf

Warren Buffet Biography

Early life

Warren Buffet was born in 1930 in Omaha, Nebraska, the son of a stockbroker and Congressman, and has become probably the world’s most successful investor.

As a boy, irrespective of his family background, he delivered newspapers to make extra money and this probably sparked his interest in the media where he has made several successful investments including the Washington Post Company, a stock that has made him a lot of money and which he vows never to sell.

Imbued with a determination to make good and an entrepreneurial nature, Warren dabbled in several part time businesses but his destiny was chartered early in the piece when, after graduating from the University of Nebraska, he studied business at the Columbia Graduate Business School under the legendary Benjamin Graham.

Working with Benjamin Graham

He tried to get a position with Graham’s firm and was at first unsuccessful. He finally got the job and, as he generously acknowledges, learned a lot about stock investment from The Master.

Cognizant overtaking Wipro

Cognizant Technology Solutions Ltd. reported stellar set of numbers on 3rd May showing a revenue growth of 43% to $1.37 Billion from $959.7 Million in the year ago period.

Cogniant is anticipating a revenue of $1.45 Billion in Q2. For full year Cognizant is expecting to clock a revenue of close to $6 Billion.

With this revenue outlook, Cognizant will overtake India's third largest software exporter Wipro, which has a target of $1.39 billion to $1.42 billion revenue for the April-June quarter. For full year Wipro is expected to clock a revenue of $5.8 Billion.

Reliance Industries block deal

Reliance Industries(RIL) today witnessed a huge block deal of 65 lakh shares at Rs 945 per share.

The stock is down more than 10% in last 10 trading sessions. On one year basis the stock has given a negative return of close to 8%.

RBI Hikes Savings Rate to 4% from 3.5%

 Reserve Bank today raised its short term lending (repo) rate by 50 basis points to 7.25%, while lowering the economic growth projection to 8% for the current fiscal.

The reverse repo, the rate at which bank park funds with RBI, has been raised by 50 basis points to 6.25%. CRR remains unchanged at 6%.

The RBI has also increased the saving bank rate by 50 basis points to 4% to give higher returns to depositors in the wake of high inflation.

Savings rate is increased for the first time since 2003, which is negative for banks having high CASA ratio such as SBI, PNB ICICI Bank, HDFC Bank.

The tighter monetary policy have played spoil sport on Indian markets and the stock markets are heavily down today mainly draggged by the bank stocks

Related article http://investorzclub.blogspot.com/2011/05/should-one-invest-in-banking-stocks-now.html

Will Osama bin Laden fall have any positive effect in our Markets. Guests, please leave your comments in the comments section

Buy Crompton Greaves - Recommends Prubhudas Liladhar

Prabhudas Lilladher is bullish on Crompton Greaves (CG) and has recommended accumulate rating on the stock with a target of Rs 304 in its April 29, 2011 research report.

The current market price of the stock is 250. The stock is currently trading at 15.5x and 13.3x its FY12 and FY13 estimated earnings, respectively.

Download the full report from the below link

 

http://www.moneycontrol.com/news_html_files/news_attachment/2011/Crompton_Greaves_PL_020511.pdf

Lloyd Electric FY11 Results & Valuation

Lloyd electric & Engineering at the current market price seems to be tremendously undervalued in terms of price to book and PE multiples. For FY 11 the PBV and PE ratio of the company at the current market price of 62 are as follows:

Should one invest in banking stocks now?

Savings account deregulation is a fresh challenge that is emerging for all the banks and particularly those banks which has high CASA ratio as there will be compression in NIM once this regulation is implemented. Already banking stocks in India were at the top end of the Interest rate cycle 9 months back when the entire regime of loose monetary policy was about to end and RBI became hawkish on Inflation and started increasing rates. 

In an article dated 1st FEB 2011 "Banking stocks injured by tripple edged sword"  it was discussed how the pain on asset quality and lower NIMs will start getting reflected from the 4th quarter of FY11 onward which will take at least 6 to 9 months to bottom out. Only then the investors having 1 to 2 years of investment horizon should enter into quality large cap and mid cap banks. There is still enough pain to be witnessed by bank stocks going forward. So fresh allocation in bank stocks at this point of time should be avoided until both time and price correction happens and valuation on 1 year forward basis is compelling.

Infosys Management Change

Infosys Technologies, India's second largest software exporter reshuffeled its top managment to steer the next level of growth in the company and stay ahead in the competition with TCS, Cognizant & Wipro. The latest Mangement team announced is

Chairman - K V Kamath, formerly ICICI Bank Chairman, replaces Narayan Murthy


CEO & MD - SD Sibulala, formerly COO of Infosys


Executive Co-Chairman - Kris Gopalakrishnan, formerly CEO & MD of Infosys