Online brokers are usually involved in research of stocks. Based on which they come up with the recommendations of stocks primarily for their clients. Normally theses stock recommendations are for long term. That is to say that if a broking house comes up with recommendations today it does not mean that it will hit the target tomorrow. So it is always advisable to hold stocks (recommended or non recommended) for a longer period provided the fundamentals are good.
Based on the above introduction I present a case study of 4 stocks which are recommended by the broking houses. I have taken 3 stocks recommendations from SHAREKHAN and 1 from KOTAK. The selection of these 4 stocks is based purely on the maximum upside potential from the current market price. The 4 stocks for case study are
1. Universal Cables (By Sharekhan) [Target Rs 179, Current market price Rs 120]
2. Hindustan Unilever (By Sharekhan) [Target Rs 280, Current market price Rs 198]
3. Strides Arcolab (By Kotak) [Target Rs 500, Current market price Rs 335]
4. Tourism Finance Corporation of
It should be clearly noted that the case study is just an experimental way to track the market .The case study involves the following plus points viz.
1. Those who are new into the market can track these 4 stocks on experimental basis along with the general index (SENSEX, NIFTY) movements.
2. Keeping track of these 4 stocks one can fairly judge the quality of recommendations by the brokerage houses.
3. And of course one can invest in these 4 stocks for long term investments. (Purely on their own risk and no one should be blamed either for profit or loss!!!)
Now let us discuss each of the recommended shares
1] UNIVERSAL CABLES
Currently Universal cables is trading at an average rate at Rs120.This stock comes under the Power cable sector.
Universal cables manufacture cables, conductors and capacitors. The company was established way back in 1962.They are based at Satna, Madhya Pradesh. The company is part of M.P.Birla group.
Its 100% subsidiary Optic Fibre Goa Ltd (OFGL) has turned profitable. The subsidiary is into optic fibre business.
Universal cables has recently commissioned and commenced the first phase of the technological up gradation-cum-expansion project. The project uses Vertical Continuous Vulcanization (VCV) process for manufacture of XLPE Power cables.
The company is implementing a capex plan of Rs64 crore wherein it will double its capacity of medium tension cables and put up a new capacity of extra high tension (EHT) cables (>220KV). This plant is expected to get fully commissioned by December 2007, after the capacity expansion. Universal cables will be the only player in
In the optical fibre division the company has successfully developed a newer version
of fibre known as Low Water Peak Optical Fibre (G-652D), with its in-house expertise and has also taken necessary approvals to supply this fibre to most of the customers in
Final Comments: Due to the above plans one can definitely expect a lot of buying interest in the coming months. So this is the right time to enter into the stock. Its financial performance is improving. And as per Sharekhan’s calculation the target for this company is around Rs180.If anyone is interested in financial aspect or any other detail of Universal cables they can just visit their website www.universalcablesltd.com
2]
Currently Unilever is trading at an average rate at Rs198.This stock comes under the FMCG (Fast Moving Consumer Goods).Its a SENSEX and NIFTY component stock.
Unilever is ranked 2nd world wide in FMCG. It hosts popular brands such as Clinic, Close up, Fair & Lovely, Lux and many more. The list is endless.
But the movement in stock price is really dull due to the disappointing financial performance owing to margin pressure and stiff competitions. But the worst is over due to a management make up and stringent measures and hence Sharekhan has recommended this stock with a target at Rs 280.
The food business and ice cream business are reportedly doing well compared to other sectors which in turn are expected to boost the profits. The processed food business recorded a strong growth o 48% with all the key brands, viz Kissan,
Final Comments: Recently there is a strong rumor going around world wide that Colgate may buy part or full of Unilever. Though Unilever is 3 times more than Colgate it is quite surprising. Anyways the news is in rumors phase.
If the merger happens then Unilever-Colgate will command more than 60% of tooth-paste business.
There is yet another major managerial shake up to restructure the company.
So one should carefully look at these news before taking interest in the company. This stock is sure to test the patience of any investor. It has been a laggard in the bull market.
One can visit www.hll.com for more info on numbers and products
3] STRIDES ARCOLAB LTD (STAR)
Currently STAR is trading at Rs 335 and KOTAK has a target of Rs 500. The stock comes under
Their main focus is on AIDS, TB and MALARIA. They have a leadership position in soft- gel capsules and have a huge expansion plan which are identified as a key growth drivers as per KOTAK.
The company has tied up with
STAR is emerging as a global player in steriles with a wide range of capabilities in freeze drying (FDV), pre-fill syringes (PFS), ampoules and vials, and specialized therapeutic formats, namely, penicillin, cephalosporins, penems and oncology.
The company proposes to construct a green-field facility in
Strides Arcolab has signed an agreement to acquire 100% of Grandix Pharmaceuticals Ltd and its subsidiary Grandix Laboratories Ltd.
Grandix is a branded pharmaceutical company mainly focused on south
Final Comments:
Currently TFCI is trading at Rs 23. As per Sharekhan the target for this stock is Rs 30. It comes under Tourism sector.
TFCI is a government owned company in which banks like SBI, Canara bank etc have stake in it. It provides financial assistance to tourism-related activities/projects. TFCI provides financial assistance to enterprises for setting up and/or development of tourism-related projects, facilities and services, such as Hotels, Restaurants, Holiday Resorts etc.
TFCI has improved its financial parameters which resulted Sharekhan in up gradation of the stock. The revival in the demand from the hotel and tourism sectors has helped TFCI to register an 81% y-o-y growth in sanctions for FY2007 compared with a 20% sanction growth in FY2006.
The business fundamentals of the company have improved significantly on the back of the capacity expansion in the hotel and tourism sectors planned for the next three to four years.
Final Comments: TFCI is in a sector which does not have much of a trading interest. So this serves as both advantage as well as disadvantage for the stock.
The stock had a 1 way journey from Rs 16.5 to Rs. Rs 24. The circuit breaker for this stock is 5%. So traders should be cautious since the stock tends to hit the circuit either upwards or downwards frequently. To know about the company one can visit www.tfciltd.com
Critics are most welcome along with suggestions. Please correct me if I had gone wrong somewhere. For the first timers one could do a Google search on new terms such as circuit breakers in stocks etc to gain knowledge.
HAPPY INVESTING!!!
DISCLAIMER: I personally have interest in all of the above stocks. No one should be blamed for any profit or loss!
The current market prices given are based on 10 day average prices rather than a particular day price. One can view the latest stock price by visiting the official website of the stock exchange www.nseindia.com
11 comments:
I think you would make a better financial analyst than an embedded engineer but nonetheless your work reflects the obvious efforts you have made.
Good work brother:)keep blogging
Pranav
Thanx bro..
Embedded / Vlsi is my profesion whereas stocks is my biz...!!!
Good blog guru.So keep blogging.
Here the objective of the case study is not quite clear(at least I think so).
Its not clear if these case studies are presented to help an investor or a speculator. Stock reseachers analyse the companies mainly based on their pervious track record, blance sheet analysis and cash flow analysis, and current market value of shares rather than some market rumours.
Predicting a company's stock prices based on market rumours and market trends is a very superficial manner of analysis. Any investor can analyse in this way at his own peril. Only and only a speculator involved in secondary market trading can do such an anlysis. Remember that secondary market is a place where most of the players lose more than what they gain.
An investor invests in stocks mainly to maximise his wealth over a period of time with some risk. This risk is inevitable.But its always his duty to analyse carefully before taking this risk. Thus, to invest in stocks, its not only essential to take risk, but to make a bottom-up anlaysis rather than a superficial analysis of the current market trends. And more importantly one should have enormous patience.
Thus I opine that the cases presented here will not help much for an investor who is serious about his wealth maximisation.
@Sushil
Thanx guru
@Harsha
Thanx for the review..
The objective is to make freshers track the market..and not to advise any1 to invest..and the targets which have been mentioned are from sharekhan and kotak..
Therby one can fairly judge the brokerage house..actually for me this blog is nothing but to assess the quality of these brokerage houses
Hey man.... looks like u become stack analyst in near future. I read one of ur case study.. Good effort buddy..
I can feel ur enthusiasm in ur blog.
Good .....
Good effort buddy... Nice work...
It was a good piece of work and it at least helped me in analysing the different stocks... As am new to stocks...
Thanks.. :)
How long do you want us to read the same blog??Post some new stuffs man and ya was just seeing the videos you have updated on orkut....trust me bro if you use the "ni**a"word here you are arrested without bail.Nonetheless you are in B'lore and all safe:)
Cheers
Pranav
@Pavan & Sik
Thanx for the support
@Pranav
Sure man,I am coming up with atleast 2 blogs shortly.
Will change the video name if at all i come to UK!!!
Dude, First of all I would like to tell, I loved ur presentation.. It was quiet interesting to start off but I loved it completely.. and coming to the case studies, dude, the analysis and ur ideas are put in a very beautiful manner and I loved it. I would like to give an advice.. Please quit ur electrical field, U are of no use there. U would make it big and better as a financial analyst. Great efforts dude.
@ Bharath
Thanx dude...
By the way I am not in electrical s I am in VLSI!!
ha ha
Post a Comment