Wrote previously about this here Looking at Nucleus Software’s massive eight years of yawning under performance made me look further back in its history. There is a lot wrong with the company and the company is generally compared with OFSS and Polaris. This may not be the right comparison, 80% of revenues of Nucleus are earned outside India.All continents account for nearly equal percentage of revenues now giving it multiple legs.Annual revenues and Profits Year Revenues INR Crores Profit After Tax INR Crores 2000-01 27 10 2001-02 40 10 2002-03 60 7 2003-04 54 10 2004-05 67 15 2005-06 94 28 2006-07 146 42 2007-08 288 61 2008-09 328 32 2009-10 291 38 2010-11 270 26 2011-12 282 35 2012-13 293 45 2013-14 346 64 2014-15 350E 65E The company is dependent on a very narrow and niche segment with lumpy earnings and marked by absence of growth for multiple years at times.- No Growth, Value Trap, Mediocre Management and a few more issues with the company.Positives:… [Read More...]
Turner’s Take Podcast | US Crop Tours and Black Sea Exports
Play Turner’s Take Ag Marketing Podcast Episode 324 If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! New Podcast In this episode we talk about the US recession, UK inflation, and what that means for energy prices this year and next. We then talk about the grain markets and how prices will be dictated by the success (or lack of) in the Black Sea export market for the next few months. We end with canola and soybeans and why oilseeds may break hard during N. American harvest. Make sure you take a listen to this week’s Turner’s Take podcast! About Turner’s Take Podcast and Newsletter If you are having trouble listening to the podcast, please… [Read More...]
Hairy (squared) Business – Radix Industries
Unique and thematic businesses are characterized by steep PE multiples, disregarding DCF or other sane measures of value.This company (RADIX INDUSTRIES BSE: 531412) piqued my interest as it bids and sells hair ( remy hair ) donated in South Indian temples. Human hair sell for as much as 50 Lac INR per tonne. Industry size is roughly 2500 Crores INR.This hairy business get more hirsute as I feel the company’s share have already been cornered by promoters and their friends and family members indirectly leaving no value. Company is growing 100% YoY but the industry size / MCAP (300 Crores) of 8 times leaves little room for appreciation for investors as promoters bought shares for 2 Rs but have artificially kept the price inflated at 300 Rs.TTD sells human hair … [Read More...]
Sarup Industries
I had written a deep value investment idea for the partners in 2013. I had only invested in personal capacity and then sold most at no profit no loss.I got a bit late in identifying the changes recently and again entered at 80 Rs levels post BSE announcements in Dec 2014, which I failed to notice and another on 6th of Feb, bought only after 10th Feb. Main proposition of the footwear company that started same time with same financial muscle as Relaxo, i.e. little to nothing, (and is 50 times smaller today than Relaxo) is a mall project. This project was held in suspended animation due to some conflicts, my guess and real estate slowdown.The six floor mall project would have market value anywhere between 400 – 600 Crores. Even … [Read More...]
Turner’s Take Podcast | Wheat and Corn Prices Hinge on Black Sea Exports
Play Turner’s Take Ag Marketing Podcast Episode 327 If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! New Podcast In this week’s episode we go over the latest central bank rate increases, inflation, slowing global growth, and why interest rates are likely to stay elevated until 2024. We then talk about energy and why we are long term bullish on crude but bearish on natural gas. We wrap up and make our case for a bear bias for soybeans and canola over the next few months but the jury is still out on wheat and corn. Make sure you take a listen to this week’s Turner’s Take podcast! About Turner’s Take Podcast and Newsletter If… [Read More...]
Birkin Bag
Hermes is a legendary company. A great company, however does not always translate into a great investment for numerous reasons.This is a fairly large and mature company with 37 Billion USD market cap. with stock up 15x in past 15 years, not bad.If you remember Warren Buffett’s money spinning antennae turned on when he saw a Rich Person smoking expensive Cigar during the depression era, salivating over the profits for the business owner.One of the prestigious products of Hermes is a Birkin Bag, costing as much as sports car, ~50,000 to ~80,000 USD. In Auctions it can go up to 150,000 USD. Money isn’t enough, there is a waiting list for many years. Birkin Bag is classic example of a Veblen Good (http://en.wikipedia.org/wiki/… [Read More...]
Continues to Ooze sweet
I wrote about this company as “The only company I like in Australia” two years backhttp://multibaggersindia.blogspot.com/2013/09/roe.htmlFor a developed country, it offered decent growth and was below the radar. Sadly, I only talked but not walked as the company was satisfied with 10% revenue growth. The stock has grown quite well backed by acquisitions, not only organic growth, and is 6 times up since 2013 when I wrote i.e. 210% CAGR.Even now no institution has evinced much interest in CAPILANO HONEY It is certainly hard to foresee such a strong performance from a mere low revenue compounder.But the 70% market share Capilano had in Australia, conjoined with 5% yield was screaming for attention.These days I am mulling a company which is … [Read More...]
Sandalwood Oil 100,000 INR or 1,500 USD / Kg TFS Corporation Australia
I spent 3 days researching on an idea after it passed several filters including excess of 30% return on equity and a niche business model. The idea was based on a rare commodity, due to lack of sustainable farming practices in India, the production has fallen 95% over past three decades in India. Regulation is decades far in India, even if regulation for sustainable farming were to be passed on 15th of June 2015, i.e. tomorrow, it will be 15 years before India would be back in the game.India’s loss was gain of an Australian listed entity, TFS Corporation which grew from a 20 Million AU$ company in 2004 to 620 Million AU$ company in 2014, 30 times.I feel that the company will grow even larger in the time to come. They … [Read More...]
Why India is still expensive Sensex @ 25,000 ( just 20% down from peak )
Munger uses opportunity cost as a very frequently used tool.Munger opines that if you have the opportunity to purchase an investment that is better than 98% of all businesses, then you can use it as a filter to automatically eliminate the other 98%. Ultimately in the long run, investing world is full of toads that do not transform to princes.I wrote in 2013 about Unilever Nepal @ 10,000 NPR / share. The company is growing @ 20%, not less than it grows in any other emerging country.http://multibaggersindia.blogspot.com/2013/09/multi-generational-investing-idea-3.htmlNow, after two years of irrational bull market (not backed by productivity improvement) companies are over priced on every continent.Unilever Nepal (where FII investment is not allowed) is also trading at reasonable … [Read More...]
NSE Kenya – 50 bagger
Having seen a large number of research reports, focusing on next 20-25% only, but on equities that went up several fold, are in stark contrast to how a long term investor should think and a great dis-service to long term investors. I read a statement recently, “Best investing articles are the ones that have nothing to do with investment”. I see this all the time, with investing newsletters venturing into philosophy.The problem I find with this statement is that the person in context has defined himself / herself narrowly as an investor. I have not. As a man shall not live by bread alone but by every word of ….., no investor shall live with stocks or financial analysis alone. It is too drab to focus on … [Read More...]
Tart Chart
In a bear market, stocks may seem like mouthful of hot molasses, too sticky to spit out, too hot to swallow.While claims of creating material wealth are true in equity markets, emotional impact on full time dedicated investors is not well studied and reported. It pays to be a bull as markets are mostly up rather than down over long term.To be informed is to be empowered.You should know, if you are not already aware that equity indices may or may not move for 11 years (eg: Sensex) or 16 years( eg: Dow Jones) or even 25 years (eg: Nikkei) except for 1% of stocks (that we may or may not own). Person who has not read history is like a child, doomed to repeat mistakes (of … [Read More...]
Turner’s Take Podcast | Higher Interest Rates Have Not Decreased Inflation…Yet
Play Turner’s Take Ag Marketing Podcast Episode 329 If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! New Podcast In this episode we look at the Federal Reserves interest rate hike last week and why traders sold stocks and commodities and bought the USD. We then turn to the grain and oilseed markets and why we think there is more downside in soybeans and canola but expect a wide range for wheat and corn. Make sure you take a listen to this week’s Turner’s Take podcast! About Turner’s Take Podcast and Newsletter If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! Craig Turner – Commodity Futures… [Read More...]
Organic Food – Long term trend
What we call Organic Food was called Food by your grandparents. It is a trend that will continue to show up now, in my opinion.A couple of exemplary companies at the moment on my radar that I may miss being on the sidelines due to the Infosys nature of stock (high growth but equally high PE multiple).First is in the United States. Where Food Comes From Inc. It provides Organic Certification, Labelling, Third Party Verification http://wherefoodcomesfrom.com/WFCF is still a small cap at 65 Million USD market cap. The company will be engaged in McDonalds tracking and verification program and has lions share of market.On the face of it quite dear, 6 times revenues and 100 times earnings.Second is an Australian company, just noticed … [Read More...]
The J-Hook Pattern for Massive Partners
How to use the J Hook Patterns in Trading Often you get in an uptrend when trading and you just know that it is about to pull back or do a trend reversal. Thus the J Hook becomes your best friend. Robert Hooke FRS was an English natural philosopher, architect and polymath. He originally discovered what became the J Hook pattern. He made contributions to human knowledge spanning Architecture, Astronomy, Biology, Chemistry, Physics, Surveying & Map Making, and the design and construction of scientific instruments. The J-hook starts with a strong uptrend that produces stronger than normal returns in a short period of time. The J-hook provides some simple profitable applications. The first uptrend usually shows candlestick sell signals when the initial upmove comes to … [Read More...]
Microcaps, Money, Retirement, Aim of Life
MicrocapsI have stopped investing in conventional microcaps and nano caps (1 Million USD to 10 Million USD range) and feel the need to at least bet 7-10% of the funds on an idea. As the future of companies are hard to forecast in that nano cap range, the bet size has to be small as a percentage of portfolio. Nevertheless I am investing in similar companies in 30-50 Million USD market cap range in other countries. Nairobi Securities Exchange (KENYA) currently has only 66 companies listed, going by the news 50 more micro caps should list in the next two years, juices have started secreting in a capitalist’s jaws.http://www.businessdailyafrica.com/Corporate-News/Top-100-finalists-target-NSE-listing-to-boost-capital-/-/539550/2905394/-/13j9o1dz/-/index.htmlMore MoneyI completely understand … [Read More...]
Candlestick Sentiment Trading
Trading Candlesticks As many of you know, I have been trading for over 22 years. As the years go by I become a bigger and bigger fan of Candlestick analysis because it shows investor sentiment. Here are four of my friend Steve Bigelow’s latest “How to Trade…” series. Moving Averages – We all use moving averages. Here is the “insiders” way to profit from them Trend Analysis – The trend is your friend and now it becomes your profit center Projecting Price Targets – After you get he 1-2-3 signals from the Futures Trading Secrets Course, you will no exactly where to get out Gap Analysis – I love gaps and you will too after mastering this technique These programs are practically guarantied to work … [Read More...]
Arbitrage Opportunity India – Amal Ltd & Atul Ltd merger
I am not blind to the fact that multi-fold growth per annum is possible in micro caps. I wrote about few opportunities earlier like Millennium Beer, a 2-3 Million USD company at the time (which merged with United Breweries, a 4 Billion USD market cap company) which wiped out the possibility of multibagger gain. (http://multibaggersindia.blogspot.com/2010/11/arbitrage-opportunity-millennium-beer.html)Similar fate has struck another company that I had an eye on, for over three years, ever since it was with BIFR. Amal Ltd, a 4 Million USD market cap company.http://www.amal.co.inhttp://www.bseindia.com/stock-share-price/amal-ltd/amal/506597/The board has decided to merge it with the parent company (Atul Ltd), nearly 800 Million USD market cap, but there is likely … [Read More...]
Price Action to Predict Market Turns
Predicting Market Turns with Price Action If you watch market action closely you will pick up on a reliable market pattern. Strangely enough it is almost totally independent of the time frames you use. It does not matter if you are using 1 minute 15 minute, one hour, daily or even weekly time frames. Watch this video or any of your charts on any stock, ETF, or index and research this for yourself. You will find that the market reverses itself after runs of 3-4-5 or 6 consecutive trends. Technically this is called the Reversion to the Mean. After a short run like this it seems to just run out of gas. 3-6 bars from William F. McCready on Vimeo. .dpsp-networks-btns-wrapper.dpsp-networks-btns-content {margin-bottom:20px !important} … [Read More...]
Why Eurozone stocks have lagged
Since the low point for the equity markets during the global financial crisis in 2009, Eurozone equities have lagged their US counterparts by an impressive 300%. Why is this? By the look of things, it’s a combination of different factors. The first – and most important – reason is that US companies have performed much better than their European counterparts when it comes to corporate earnings. The graph below shows that since March 2009, the earnings per share of companies in the S&P 500 have increased 170%, compared with an increase in earnings of precisely 0% for companies in the Eurostoxx 50. Some of this difference can be explained by share buybacks, but for the most part it can simply be put down to profitability. Heavyweights The second reason is … [Read More...]
Independence, Reality, Age and Limits to Growth
I had written a blog post five years back (in 2010) on how your family can own 70% of Indian listed and unlisted companies here http://multibaggersindia.blogspot.com/2010/12/how-your-family-can-own-70-of-india.htmlIn the previous article in 2010 I touched on how you could set up a foundation, where nobody could touch the capital, convince your next five generations to continue to compound money on value investing principles and accumulate over 70% of the financial wealth of India.I though it was time to raise the bar 🙂 , being a big fan of DIY, methinks, why depend on your family office / foundation, rather why not do it yourself, and why limit to India, why not the entire planet.IndependenceWhen I started getting greedy for … [Read More...]