Top Ten Universities of America - Specialization and Tuition Fees

The best among the best. Here is the list of top 10 universities of America with their specialization, Location, Undergraduate enrollment numbers (approx.) and approximate tuition fees.

http://www.capmaa.org/2014/09/top-10-universities-of-america.html

This stock could generate 10% return in a week

In this super boiling market where people are busy scouting for stock that can pop up 10% or even 20% in a day, and why not this has been the trend since past one week, it is very lethal to buy stocks for ultra short term but expecting superb gains. On repeated requests from my readers, clients and friends, though I stay away from the concept of buying stock for a week or so, I think people can put their bet on Punjab Sind Bank at Rs.63 for last week of this month (26th to 30th). 

Few quick reasons for why this stock...

1. Public sector banks are flavor of the month and even elephants (SBI, BOB)  are dancing with 10%, 20% moves in a single day. SBI, having market value of over 2 lakh crores is up 90% from it's low of Rs.1450. PSB is just 67% from it's low till date. Union bank, OBC, BOB, PNB, Indian Bank are up anywhere between 120 - 200% from it's 52 week low.

Stocks to Avoid in BJP govt. regime

With BJP having full majority at the center, there are many themes in the stock markets to play for an upside such as PSU Banks, Road Infra, Power and capital goods etc. which are expected to do well over time. But not all stocks are good for investment under NDA regime and careful selection is important as if you are in those names you might be in for a serious disappointment. Two such names that comes at the top of my head are DLF and Jindal Steel and power. 

Naveen Jindal the promoter of JSPL is already being charged under coal scam and he has lost his MP seat from congress in 2014 Lok Sabh Election. Valuation wise the stock trades at hefty valuation on EV to EBIDTA basis compared to Tata Steel and JSW steel. With debt rising every year and the power of the promoter to compromise system gone, JSPL as a company has tough times ahead. So avoid this stock completely.

Model Portfolio Update - May 2014

Lot of fresh addition to the portfolio after 1.5 months of status quo. Investments made in stocks with reasonable value, good upside potential due to stable govt. at the center and adequate diversification.

Check out the latest portfolio here: Amit Agarwal Stock Portoflio

Wonderla Holidays IPO allotment to Retail Investors unfair

Individual small retail investors have been hugely disappointed with the IPO of Wonderla Holidays as far as the allotment of shares are concerned. Many individual investors who applied for one or two lots hoping to get shares as per SEBI's minimum allotment rule, have not received any shares. As expected the stock listed at 165 on the listing day as on 9th May 2014 but many of the small retail investors who had the applied in the IPO couldn't gain as they have not been allotted any shares.

There was huge demand for shares in the HNI category which were rumored to have borrowed 4000 crores to apply in the IPO at very high interest rates. 

http://www.business-standard.com/article/markets/rich-investors-borrowed-rs-4-000-cr-to-bet-on-wonderla-public-offer-114042400842_1.html

There is a possibility of company management and these HNI investors forming a nexus and gain at the expense of retail investors. There was huge grey market activity in the marketplace as well. As per SEBI rule each retail investors must get minimum allotment to encourage wider participation (See articles below).

Top 20 Bank loan defaulter companies in India

Few corporate defaulters have brought most of the public sector banks to their knees eroding their net-worth and compelling them to dilute equity to comply with Basel norms. PSBs have been huge wealth destroyers since past couple of years partly due to economic slowdown and partly because of willful defaulters. 

Following is the list of top 20 loan defaulters in India:

Top 10 highest dividend yielding stocks in CNX 100

With stable govt at the center and likely peak out of interest rates in India, quality stocks with high dividend yield could provide sufficient downside protection and reasonable upside potential. Following is the list of top 10 stocks in CNX 100 (top 100 companies listed on NSE) with highest dividend yield.

Name	LTP(Rs.)*	Div Yield
Oil India Ltd	482.5	6.2
NTPC Ltd	114.45	5.0
Union Bank of India	153.15	5.0
Coal India Ltd	295.3	4.7
NMDC Ltd	152.2	4.6
Canara Bank	285.4	4.4
MphasiS Ltd	414	4.1
Bank of India	233.05	4.0
Power Finance Corporation Ltd	187.3	3.8
Reliance Capital Ltd	349.2	3.7
*LTP as on 2nd May 2014

Ranabaxy Insider Trading - Where is SEBI?

Markets Rejoiced the mega merger announcement of Ranbaxy and Sun pharmaceuticals on 7th April 2014 but the real action was happening in the prior week and somebody made fortune by having an insider line in this deal. 

The stock shot up more than 25% in the prior week on very high volumes but very low delivery indicating speculative built up of position prior to the merger announcement. 

Delivery on the National Stock Exchange was around 12 per cent of traded volume on 2nd, 3rd and 4th April when the stock witnessed nine per cent, 5.1 per cent and 8.2 per cent respectively. The closing on 4th April was less than Rs 3 from the share price in the deal. 

Model Portfolio: One Year Performance Review

The model portfolio which was created with an initial capital of Rs.1,00,000 /- on 21st March 2013 completed one year of existence on 21st March 2014. I feel very happy to say that in-spite of very challenging  macro and micro economic situation in India, our model portfolio has outperformed benchmark Nifty by huge margin.

Model Portfolio snapshot as on 21st March 2014:

As can be seen from the Nifty chart below, during the period from 21st March 2013 to 21st March 2014, Nifty has delivered an absolute return of 14.74% while our model portfolio has generated 29.1% return based on the closing price of stocks held in the portfolio as on 21st March 2014.

Sell DLF 220 Call Option

DLF has moved up sharply from the 140 odd levels since the beginning of March 2014 to 180 as on 12th March 2104 mainly due to short covering. Due the sharp up-move in the stock on 11th March on very low delivery volumes and short covering, the IV's in the strike prices of the counters has gone up substantially. One can utilize such high IVs to sell far out of the money call which are adequately safe.

Valuation wise DLF is trading at around 16 times EV to EBIDTA of current financial year which is quite expensive in the context of slowdown in realty sector in India. Also the majority of debt reduction exercise is over which means all the good news in terms of debt reduction is discounted in the price. Technically the stock seems to be highly overbought at current levels and is also up more than 25% since the Feb 2014 closing. Hence there seems to be limited upside (if at all) from current levels. Hence one can sell 220 strike call @ 0.95 or higher which is highly safe as movement towards 220 will imply almost 50% move from the Feb close.

Total Return from the trade:

Buy Bharti Airtel at every decline

With spectrum auction out and the M&A rules defined, the telecom sector is finally getting out of the regulatory interference which is a big positive for all the telecom players in India. Though the debt level of the sector will further rise, consolidation and tariff rationalization will make the leverage position of the sector comfortable in next 1-2 years. Both the big telecom players Bharti and Idea Cellular appears attractive for investment at current levels but Bharti Airtel in particular is very attractively poised at current price of around Rs. 290. Here is why?

1. Back of the envelope calculation suggest limited downside and reasonable upside. Lets consider following valuation points assuming around Rs.92000 crores of revenue, Rs.30000 crores of EBIDTA and net debt of Rs.60000 crores for FY-15.

Corporate Governance Rating for listed companies in India

SEBI is considering a "Corporate Governance Rating" for every listed company in India which, in my view, could be a game changing event for minority shareholders. Security Exchange board of India is in the process of finalizing its new Corporate Governance Code and revamp insider trading norms. Beside having new rules that are largely targeted to protect minority shareholders, Governance Rating for each company will be very handy specially when a small investor is investing in mid and small cap companies.

Like IPO grading, a grading system for companies on governance front is a much needed reform that will strengthen the overall capital market of the country. For minority shareholders, governance is much more important than valuations and the former being subjective it becomes very difficult to asses the score in that front. 

If "Corporate Governance Rating" become reality it will help all of us in flushing out almost all crap and scam ridden companies. All we need to do is check the score and completely avoid companies which are below certain level. 

In my whole investing career more than 90% of my loosing bets were due to governance issues in the companies. Strong insider trading rules and tough penal actions for the guilty along with Corporate Governance Rating will surly help build confidence in the Indian Stock Markets and encourage wider participation by small retail investors. 

Engineers India FPO Analysis: Avoid

Engineers India Limited is coming up with its FPO to offer 33,693,660 equity shares of face value 5 each from 6th February, 2014. The issue details are as follow:

Offer Size: 33,693,660 Equity Shares of face value of 5 each

Price Band : 145 - 150 (Discount of 6 for Eligible Employees and Retail Individual Investors)

Issue Opens on Feb 6, 2014

Issue Closes on Feb 10, 2014

Lot Size : 100 Equity Shares and in multiples of 100 Equity Shares thereafter (Min Investment Rs.14500 to Rs.15000)

Should one apply to this FPO?

The straight answer is "NO" as the company is witnessing falling revenues and profitability. Also the price at which the issue is being offered is very close to the current market price which is Rs.150. As far as valuations are concerned the stock @150 is trading at 11 times FY-14 earnings. 

9 Witty Quotes on Money

"If you have a gun you can rob a bank, but if you have a bank you can rob everyone" - Bill Maher

"The safest way to double your money is to fold it over and put it in your pocket." - Kin Hubbard

"A bank is a place that will lend you money if you can prove that you don't need it." - Bob Hope

"Cocaine is God's way of saying you're making too much money." - Robin Williams

"Finance is the art of passing money from hand to hand until it finally disappears." - Robert W. Sarnoff

3 Mistakes that taught me the golden rules of Investing

In 10 years of my stock investing experience I have done many mistakes which caused me substantial financial losses but in return I learned some invaluable lessons that are now the fundamental pillars of my investing approach. Here are the top 3 mistakes and the lessons I learned from them. 

Mistake # 1:  Over Concentration - During my initial days of stock picking I used to go overboard on one or two stocks and put all my money into them expecting an imminent explosion in stock prices and my invested capital. I invested significant proportion of my capital into names like Prithvi Information, Lloyd Electric, Paramount Communications during 2006-07. Guess what most of them went burst and are today down 90 to 99% from my purchase price. Though I managed to get out of them without loosing all of my capital but I still had to take more 40% knock on those names. I also had winners in the form of UCO bank, Zensar Tech etc but the gains in them were not sufficient to cover the losses. From then onward however confident I am, a stock never occupies more than 10% of my portfolio.

Lesson and Golden Rule # 1: Diversification equals Risk. Adequate diversification must to manage the risk of a portfolio. Never put all your eggs in one basket until and unless there is 100% chance of things happening in the way you want them to happen.

Learn how India's best known Value Investors pick stocks

Value Investing is not a rocket science but an art that requires simple thinking, patience and asset owners attitude. If one can acquire these three skills he/she should not have difficulty in picking high performance stocks. 

There are many text books available which can be read to understand how value investing is performed but to get things in nutshell and help you understand the practical aspect of this style of investing, following is a set of videos where in India's best known value investors discusses live on value investing framework and their individual strategies of picking winning stocks. 

Sell Indian Oil (IOC) 180 put at 1.10

With all the buzz and fuzz about Indian Oil Corporation divestment to meet the fiscal deficit target, IOC stock has been under continuous pressure for quite long. But with all the news flow it appears that govt. wants to sell the stake but at higher price. At current market price of around Rs.197, the stock is a bargain buy and available at a fraction of it's replacement cost. The stock is also trading near 3 year low. Hence there is high possibility that govt. might not go ahead with IOC divestment until price recovers.

Considering all these factors one can sell 1 lot (1000) IOC 180 put at current market premium of Rs 1.10 or higher to generate a return of 4.17% in 15 days. Even if the divestment happens now it is highly unlikely that the price will be set below 180.

Total Return from the trade:

Outperforming vs Under-performing stocks of 2013

2013 was undoubtedly a very polarized market where the companies which delivered on earnings and governance outperformed benchmark Indicies significantly while the companies which failed to deliver on earnings and repair their fractured balance sheets, under-performed indices by huge margin.

For instance Britannia Industries appreciated by more than 84% in calendar year 2013 while at the same time JP Associates fell 44% during the same period. JP Associates is saddled with debt and had to do distress sale of it's cement plant in gujarat while Britannia Industries kept generating high Return on Capital and also witnessed 430 bps margin expansion in second quarter of FY-14.

Business Standard has compiled a very good list of key stocks which outperformed / under-performed along with highlights of reasons behind their performance. The doc is available for download in PDF below:

Indian Stock Market Outlook - 2014

In general 2014 appears quite optimistic as far as performance of Indian equities are concerned. 2013 witnessed some major shocks in terms of currency, inflation and deficits which resulted in whipsaw movements in stocks and indices. Gross Corporate earnings in India has also not been encouraging so far. But in-spite of all bad macro and micro news flow in 2013, most of markets globally including Indian markets made new highs. Mutual funds sold more than Rs.75,000 crores worth of stocks in the year gone by while FIIs continued to pump in money and bought more than Rs.1 lakh crores worth of stocks.

During second half of 2013, QE tapering risk kept emerging markets on edge as none of us were able to estimate the impact it would have on capital markets. Finally after lot of suspense the QE tapering did happened and fed reduced the bond buying program by $10 billion. The market reacted positively as the quantum of tapering was low and it also signalled improvement in U.S economy.

So what to expect from Indian equites in 2014?

In a straight answer to this question, 2014 is expected to be optimistic and scale new high. But there will be no straight line movement and we will witness occasional correction on account profit bookings and unknown fears.

Trading rules in stock market for beginners

Whether you enter the market with a trading mindset or an investing mindset, you cannot deny the fact that you want to make money fast and get rich as quickly as possible. You are also unsure about your attitude, whether you are made for trading or investing or none of that, and how much return can be generated realistically from either investing or trading. 

Well you need to find those answers yourself by experiencing the markets and reading others but if you want to be a successful trader then following are some of the very important rules to remember. These trading rules are compiled from the saying of some of the most successful traders on earth.

National Savings Securities - Cumulative: The CPI indexed bonds

Bonds indexed to retail inflation finally became reality in India after long wait. Following are the major highlights of the bond and it's merits and demerits.

National Savings Securities - Cumulative, is an inflation indexed bond which tracks consumer inflation and not wholesale inflation. 

These bonds seek to protect people's savings from price rise, by offering returns over and above inflation at the retail level (Consumer Price Inflation).

Portfolio update

Due to recent correction in Indian stock markets after making new high on 13th Dec 2013, some stocks have come down to attractive valuations and hence the today's (17th Dec) dip was utilized to buy into some quality names thereby allocating more than 50% of the idle cash that was there in the portfolio as on 4th Dec 2013.

Check out the following page for the updated portfolio: Amit Agarwal Model Portfolio

CPI Inflation at all time high

The retail price (CPI) index-based inflation jumped to an all-time high of 11.24%, driven primarily by high vegetable prices. The inflation stood at 10.09% in October, entering double digits for the first time  in six months. The biggest culprit was vegetables where the inflation zoomed to 61.60% in November against 45.67% in October. Overall, food and beverages  inflation rose to 14.72% from 12.56%  over  the period.

High retail as well as wholesale inflation could spoil the rally going on in equities as further rise in interest rate is inevitable. Economists think  that RBI would  tighten monetary policy further at  its review  next week.

Stock Markets in India all set to touch new high

With decisive win of BJP in 4 state elections, stock markets in India are going to be very joyful for at least couple of days if not couple of weeks on the hopes of them forming the govt in center after national election in 2014. 

This coupled with the fact that Power grid FPO received tremendously positive response from retail investors also provides lot of comfort in the rally. Any further leg to the upward movement in Sensex or nifty have to be supported by retail investors which seems to been reappearing since past couple of months. Mid and small cap stocks with low ticker price will surely get active in coming months if market stays comfortable at higher levels. 

Given the fact that Powergrid FPO sucked in more than 40000 crores from the market which was largely the money pulled from secondary market, once the FPO shares are listed around 3rd week of December the additional 35000 crores, which were blocked in the FPO, will get reinvested in secondary market which could propel the markets even higher.

Sectors that might outperform:

Guess the Chart - November 2013

This month's puzzle is not as easy as the previous month's puzzle as the price band at which the stock is trading is the price band of many stocks and the movement it has witnessed since past 5 years is not very unique or exclusive. Answer will be revealed by 8th Dec 2013.

Some clues to help you in guessing the chart:

1. As visible on the chart the stock has been a big multibagger and has been a very strong recommendation at InvestorZclub since past couple of years.

New insider trading norms to benefit minority shareholders in India

By definition "Insider trading is when company insiders such as promoters, senior management and directors trade in the stock of their own company on the basis of information which is not available to the public shareholders". Under current insider trading norms promoters and other company insiders have to make a disclosure with the stock exchange within five days of the trades. 

Security Exchange Noard of India or Sebi’s committee feels the post-trade disclosure puts minority shareholders at disadvantage and hence under proposed new norms promoters and top executives, intending to buy or sell shares of their companies, will have to inform the market well in advance before such transactions. Once Sebi makes it a rule, promoters and insiders may have to specify a window, maybe up to three months in prior, during which they would buy or sell their own shares.

Britannia Industries - The Expensive Multibagger

On 27th May 2011 we recommended Britannia Industries (See article here: Ting Ting Tding) at Rs.391 in-spite of being expensive (35 time PE multiple) at that time. Prima facie the stock was expensive on PE front but the growth was cheap as the company was growing at very high pace. Guess what? the stock is still expensive today and is up more than 250% from the recommended price. Closing price of Britannia Industries as on 1st Nov was Rs.940

Fundamentally the company has done exceptionally well with sales and net profit up around 40% and 60% respectively between FY-11 and FY-13 (See charts below). High brand value and size of opportunity for its products across rural india is keeping the stock expensive which is now trading at a PE multiple of 50 times FY-13 EPS. Rise in EPS and further appreciation in PE multiple made the stock multi-bagger.

So what should you do with the stock now?

Sensex journey from 21k to 21k

Sensex, the so called barometer of Indian economy, touched 21000 again on 24th Oct 2013 after almost 3 years gap but why the street doesn't seems to be cheering at all? The reason is that Sensex is not the true barometer of Indian economy as it comprises only 30 large Indian companies. 

SMEs are a major part of our economy and they are in terrible state today due to high inflation, low demand and policy uncertainties  Indian economy is in far terrible state than it was during Nov 2010 when sensex was last seen at 21000. INR is at 61.50 today while it was 44.50 three years ago. Fiscal deficit and current account deficit was in far better shape than it is today. 

Indian IT companies Result and Valuation comparison

Stocks of software service companies in India has been on tear away rally since the beginning of this year and top 5 biggies (TCS, Infosys, Wipro, HCL Tech, Tech Mahindra) are up anywhere between 50% to 75% YTD. 

The run up in IT stocks in India happened on the back of two primary reasons - better demand outlook in US & Europe and massive depreciation of Indian currency vis-a-vis USD-GBP-EUR. CNX IT index is up more than 50% since January 2013.

CNX IT Index 3 year Chart

Sell Tata Steel 370 Call Option at a premium of Rs 0.90

With Tata Steel stock up more than 21% in October alone and up around 73% (Price as on 21st Oct Rs 337) from the August low of 195, the rally has been more than justified and the stock is no longer attractive on valuations front. High debt and soft commodity prices will continue to put pressure on company's earnings in coming quarters. Technically 100 week average for Tata Steel is around 370 and 20 month average is around 360.

Hence option traders can sell 370 call option of Tata steel of October expiry at current market premium of 0.90 thereby generating a return of more than 1.6% in 8 days.

Idea Cellular at life time high

Since we recommended "Buy on Idea Cellular" around 2 years ago, the stock has gone up more than 160% and has overtaken Bharti Airtel as the most favorite telecom stock in India. Fundamentally also the company has one of the healthiest balance sheet with debt-to-equity ratio of 0.9, lower than RCom’s 1.2 and Bharti Airtel’s 1.44.

Idea is now the only telecom operator to have delivered positive returns to its shareholders in the past six years, including the 2008 market crash. At present, Idea’s stock price is 32 per cent higher than that at the beginning of 2008, when the stock market was at its peak. 

Guess the Chart - Oct 2013

"Guess the Chart" is an educational yet fun filled game initiated by InvestorZclub. There will be one anonymous chart, based on Indian Stock Markets, that will be put up on blog every month. You have to guess the company name and write your answer in the comments. The correct answer will be revealed at the end of each month. Some clues will be provided along with the chart to help you find the company name.

Let's see your tuning to the market! Good Luck.

Guess the Chart - October 2013

Which Company's stock chart is given above? 

Clue 1: The Stock Closing price was below Rs 20 at NSE on 7th Oct 2013.

Clue 2: The Stock is part of BSE Group B but used to be a part of Group A sometimes back.

Clue 3: Once market's favorite, the company reported loss in Q1 of current financial Year FY-14

India GDP growth forecast 2013 - 2014

With Indian macro in doldrums since the twin deficits went into uncomfortable zone and industrial growth came to an almost grinding halt, a slew of GDP downgrades have happened since July 2013. The numbers pegged by global rating agencies and financial institutions range from 4 to 5.7 percent for FY-14. The most recent downgrade came in from the stable of Asian Development Bank (ADB) which has lowered India’s growth projection for 2013-14 to 4.7 per cent from 6 per cent earlier, stating that the recent rupee depreciation and capital outflows could adversely impact the economy.

Growth Forecast for 2013-2014 (%)
RBI	5.5
HSBC	4.0
Goldman Sachs	4.0
PMEAC	5.3
Fitch	4.8
ADB	4.7
World Bank	5.7
IMF	5.6
InvestorZclub	5.0

The Reserve Bank of India has also lowered the growth projection for 2013-14 to 5.5 per cent from its earlier estimate of 5.7 per cent. World Bank has the most optimistic target of 5.7% while HSBC and Goldman Sachs forecasting the growth to be at 4%. 

India Q1 FY 2014 CAD in line with expectations

The current account deficit for the April-June quarter of current financial year has come inline with expectation at $16.9 billion or 4.9% of GDP. The reading for the second quarter (July-September) is expected to be better due to growth in exports in Q2 and significant drop in import of gold. The overall CAD for FY14 is expected to be less than 4.0% of GDP. India's Finance Minister has set the FY-14 target for CAD at 3.7% or $70 billion. 

Sell Nifty 5750 Put Option of Sep expiry at 7.00

Considering the setup of options data on Nifty where in the maximum open interest of around 10 million shares are built at 5900 strike, it seems Nifty is likely to close between 5850 to 5950 in September expiry. Put call ratio of 1.07 at 5900 strike all suggest equilibrium of perception at this level. Accommodating the margin of safety one can write 5750 put option of Nifty at current premium of 7.00 thereby generating a return of around 1.5% in 2 days. 

Compound Interest is the eighth wonder - Albert Einstein

No wonder the world's most intelligent person, Albert Einstein, realized the power of compounding much before than anyone else. He once said that "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it". Your saved money earns money and your earned money also earns money thereby making your wealth grow at exponential rate.

India Inc Advance Tax Payment - Q2 FY 2014

India Inc preliminary advance tax payment data for second quarter of FY 2013 - 2014 suggest 7 to 8 percent growth compared to last year. While the pressure points are clearly visible in PSU banking and cement companies, Technology, private sector banks and consumer companies seems to be doing well. 

CLSA Outlook on TCS Stock Price Misleading

CLSA recent report on TCS stock price target of Rs 2200 in medium term and it's potential to attain a market value of $100 billion over next few years is very misleading for investors in general as they might get into the stock at current levels which is exorbitantly high in our view. 

We believe all the good news in terms of currency depreciation and U.S recovery are largely discounted in the stock prices of all the IT companies in general as they have outperformed Nifty by as high as 50% since the start of this year. 

CLSA is recommending a stock which has gone up 20% in 7 trading session from 22nd Aug 2013 to 30 Aug and around 50% in 2 months from June end to August end. 20% and 50% upmove might not be very high for a small or mid sized company but for a company of size around 3,96,000 crores it is huge. In two months since the end of June this year it has added more than 1.2 Lakh crores of market value equivalent to entire Wipro.

	TCS	Infosys	Wipro(IT)	HCL Tech	Tech Mahindra#
Market Value	396000	178000	119200	72400	32000
Revenue	62989	40350	37688	25734	14500
Net Profit	13941	9421	6105	4099	1950

Indian Rupee (INR) vs Pakistan Rupee (PKR)

Forget USD, you will be surprised to see that Indian Rupee has weakened by more than 15% against Pakistan rupee in past 3 months. Three months back an Indian Rupee could fetch 1.85 PKR (Pakistani Rupee) while now as on 28th Aug it's fetching just 1.54.

Countries that support Syria vs Nations against Syria

The countries in the region and western world are divided over the military attack on Syria following the suspected chemical attack carried out in country against it's people which has claimed more than 300 lives. If the tension increases, it could have serious repercussion for financial markets globally. 

Following is the summary of each countries stand as far as military action in Syria is concerned.