Magic stocks or mad?-Recent multibaggers

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Dear Readers,

I wish to discuss about the multibagger concept again in the wake of recent market budges. Basically the concept is one of my close preferences and I am always keen to monitor such episodes in the market. For any investor, buying stocks which can be multibaggers are the most appealing option. But how does one spot a multibagger. So far, the question is unanswered. You may get more confused after reading this article and I am really sorry for that.

Probably, we talk about the multibagger concept with a long term outlook, but sometimes it happens with in no time, where all the fundamentals, technicals, industry perceptions, growth perspectives, economical supporting scenarios, managerial competence and other related elements, everything or few of them befalls claptraps. I would like to share my findings on such a juncture, none a surprise, but it is there.

I have an excel sheet of BSE stock prices on 02nd April 2009 in my archives. I usually keep the entire price list of certain days for a future review. I was analyzing the performance of various scrips comparing with the prices of 20 October 2009 as part of my homework. It is really surprising and the findings are mind-boggling. I found such scrips which earned more than 1000% returns in just 6 months, more than 2200% return in a year. Is it possible? I am trying hard to make believe my eyes as it is unusual in the market with in such a short span of time.

Right now, I am not paying attention to discuss the exact reasons behind such rocket moves, rather I wish to state my findings and figures as well. Please rectify me if anything noticed wrong and I shall grateful for that. I am not sure about the exact number of stocks listed in BSE, but my analysis based on the stocks traded on or between 02 April 2009 and 20 Oct 2009. We have to keep in mind that the accrued overall gain by BSE Sensex for last 6 month is around 115%, from the lowest 8000 levels to ongoing 17000 mark. And let us compare the findings with this as a benchmark.

Let me list some real magic or mad stocks for you:-

BSE Code -531358
Scrip-Choice International
Sector - Investment and Finance
Price on 02 April – 13.15
Price on 20 October – 150.00
Gain – 1041%(6 months)
52 Wk Low – 6.50 ( Yearly gain 2207%)


BSE Code -517973
Scrip -DMC International Ltd
Sector-Construction
Price on 02 April – 2.26
Price on 20 October - 24.85
Gain – 1000%(6 months)
52 Wk Low – 1.66 (Yearly gain 1397%)

BSE Code - 533055
Scrip-Edserv Softsystems
Sector – Education/Software
Price on 02 April - 21.60
Price on 20 October – 233.90
Gain – 983 %( 6 months)
52 Wk Low – 18.70(Yearly gain 1150%)


BSE Code - 526544
Scrip - Scanpoint Geomatics Ltd
Sector – Niche (GIS and Image Processing Software, IGIS Mobile GIS, Q-Pad etc..)
Price on 02 April - 3.47
Price on 20 October – 34.50
Gain – 894 %( 6 months)
52 Wk Low – 2.07(Yearly gain 1566%)

BSE Code - 531882
Scrip - Kwality Dairy (India) Ltd
Sector – Food Processing
Price on 02 April – 97.30
Price on 20 October – 900.90
Gain – 826%(6 months)
52 Wk Low - 14.60(Yearly gain 6070%)

I have placed the details of 5 toppers above. I would like to state again, I am not yet scrutinized the exact reasons behind such rocketing of scrips mentioned here, whether it was related to speculations or anything else. I am examining one by one to find the probable reasons behind such unbelievable darts as well as their sector profiles. The list is lengthy and I will certainly provide some brief statistics on the same.

The following %age return figures are from approximate 6 months (02 Apr 2009 to 20 Oct 2009)

Number of stocks gained more than 150% returns - 434

Number of stocks gained more than 200% returns - 220

Number of stocks gained more than 250% returns - 124

Number of stocks gained more than 300% returns - 91

Number of stocks gained more than 350% returns - 64

Number of stocks gained more than 400% returns - 40

Number of stocks gained more than 450% returns - 28

Number of stocks gained more than 500% returns - 21

Number of stocks gained more than 550% returns - 20

Number of stocks gained more than 600% returns - 13

Number of stocks gained more than 650% returns - 11

Number of stocks gained more than 700% returns - 10

Number of stocks gained more than 750% or 800 % returns - 7

Number of stocks gained more than 850% returns - 4

Number of stocks gained more than 900% or 950% returns - 3

Number of stocks gained more than 1000% returns - 2

As a common trend, the majority of scrips comes under Small Caps (almost 80%) which seized more than 300% gain in a 6 month duration.

The single highest category of gainers is from small non banking institutions involved in financial sector, but most of them are unheard.

The majority of Mid caps restricted with a decent gain of 150 – 300%.

A large number of gem penny stocks are also played their roll well in the team with more than 400% gain.


I wish to conclude this post as it is getting lengthy, but will share this data to my regular clients for free of cost by mail.

Readers are requested to comment whether negative or positive which encourage me to bring more in this row.

The above information is a pure history and I am not responsible for your investment decisions based on the data above. Please do your own research before make any investment.

Warm regards

Shabu Thachat – sthachat@gmail.com

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Diwali Wishes-Temptations

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Dear Readers,

Wish you all and family a happy, prosperous and sweet Diwali.

I have registered a domain for this blog and readers can access it by typing stockinfos.in

I wish to recommend a scrip to readers as well to my clients as my present for this Diwali. The scrip is sweet indeed as the company involved in the field of food processing including fruits and Vegetable. One more imperative reason to suggest this stock as it comes under one of my much preferred sectors, Agriculture! the only sector, which have'nt a way back.

India with its population of about 1.10bn people, growing @ 1.6% pa is a colossal and growing market for food products as well as other processed eatables. Spending for food is the single largest element of personal consumption expenses. The increasing numbers of modern retail stores are itself the sign of high growth rate of Indian retail revolution. The consumer lifestyles are changing drastically with an increasing need of eased and hygienic edibles. All of the above factors will help to grow the underlying demand for the convenient food whether it is fresh or frozen. Above all, the role of food processing and preservation becomes significant since agricultural production is targeted to double in the next 10 years by Govt of India.

BSE Code - 519228
Sector - Agriculture(Food Processing)
CMP (15/10/2009) - 36.10
EPS - 23.61
PE - 1.55
BV - 98.79
FV - 10
52 Wk L/H - 18.85/264.75
Buy Range - 30-40

Ever High post 2000 - 350(Jun 2008)
Market Cap - 92.14 Cr
Chairman/MD - Vinit Kumar
Promoter(s)’s holdings - 21.13%

Temptation Foods Limited (TFL) established in 1991, affianced in the frozen processed fruits and vegetables belongs to Agricultural Sector. The company uses the most modern IQF (individual quickly freezing) technology for preserving the products. TFL has established it’s modern processing facility in the midst of fruit and vegetable farming zone at Jejuri, Pune. The plant involved in deep freezing of mangoes, pineapples, papayas, melons, grapes, strawberries etc. TFL also processes a variety of vegetables like green beans, green peas, cauliflower, okra, corn, carrots, chillies(red and green), ginger-garlic cubes, samosas, parathas, paneer products and a variety of other ready to serve eatables. The company has an Installed capacity 4000 MT for IQF Frozen Fruits & Vegetables.

TFL processes a variety of vegetables and fruits for the Indian markets and also exports to several of the biggest brands in USA, UK, Europe and the Middle East. The company has acquired the Everfresh brand of frozen Fruits and Vegetables from the K. K. Birla group in November 2007, one of the biggest domestic brands in the segment, Everfresh has reached in the top line of Rs 200 million in 2007. Ever Fresh offers quality IQF products over 50 types of vegetables and fruits such as French beans, carrots, cauliflower, coconut, sweet corn, tapioca, mixed vegetables, okra, spinach, karela, green peas, drumstick, brinjal, onions, Green Peas, American Sweet Corn, Baby Corn, Broccoli, Palak, Sarson ka Saag, Shredded Coconut under Delika brand name and different varieties of fruits like Alphonso Mango etc..

The company also processess, fig and orange, strawberry, chunky orange marmalade, plum, mixed fruit, and peach; sauces, such as pizza, Italian pasta, Szechwan, and Mexican salsa sauces; and dressings, including eggless mayonnaise, garlic mayonnaise, whole grain mustard, Italian salad dressing, French dressing, fresh mayonnaise, and sandwich spreads under Karen Anand brand name.

The company has recently introduced combination products like Gajar Mattar, Mattar Paneer, Aloo Mattar etc. Ever Fresh farm products are procured from Haryana, Punjab and the Terai region, the heart of the Northern Agri-belt of Western India. The farm produce is plucked and processed with the IQF technology within 24 hours. The products are then packed in unique food grade packaging at -20 degree C. The company claims that 'Ever Fresh' range of products are processed and packaged without any chemicals and preservatives and meets the national and international quality standards including FPO.

TFL today represent one of the biggest organized publicly listed companies in this sector. The Karen Anand range of gourmet products has also become a part of TFL’s list. The company produces the Karen Anand range of products at their plant in Jejuri near Pune. TFL processes Fruit and Vegetable produce at 6 plants: Sonepat, Karnal, Rudrapur, Kashipur(2 plants) in North India and Jejuri in West India. The plants have a combined annual capacity to process, pack and Individually Quick Freeze (IQF) over 60,000 tonnes of Vegetables and Fruits. TFL’s installed capacity of above 30,000 Tonnes is the largest company with such facilities in the country. Similarly, in-plant cold stores have a combined capacity of over 5,400 MTs again the largest such cold storage in India.

The company procures fresh fruits and vegetables mostly from the Terai region in North India and the Agriculture Produce Market Committee (APMC) of Mumbai and Pune. The plants are strategically located in the heart of the agricultural zones. TFL is the first Indian frozen food Company to get ISO 9001 certification. The Company also has International Quality Accreditations such as the HACCP and RINA ISO 9001:2000 approvals. TFL exports 90% of their products, however the company has recently started supplying goods domestically under the Everfresh brand. Nearly all large domestic retail chains are TFL clients. This segment includes retail chains like Metro, Shoprite, Big Apple, Spencers, Reliance Fresh, Spinach and Food Bazaar.

My View on the scrip

I expect substantial multibagger returns from this scrip with a 2-3 year term. The current valuation and growth prospects are really attractive. The food processing sector becomes significant as agricultural production is targeted to double in the next 10 years by the Govt of India. It is expected that the fast growing retail chain spectrum is an added advantage for the company for bulk orders from the retail giants. The increasing population and changing food habits even in urban areas will surely beneficial for the company. The recovery symptoms from the recession turmoil must increase the consumption by foreign/domestic clients. TFL comes under a distinctive class in this sector as well as keeping an enhanced reputation in its clients. A bit of speculative history is there with the scrip but still I expect Its a safe bet for long term.

Readers are requested to place their comments on the scrip.

I am not responsible for your investment decisions, please do your own research before make any investment decisions.

Shabu T - sthachat@gmail.com

The simple legend

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Warren Buffet, the second richest man in the globe who has donated some $31 billion for charity. I think he is real legend in humanity too.

I wish to light on some interesting aspects on his life. You can read much more in between the lines…

He bought his first share at age 11 and he regrets now that he was too late! He remembers, things were very cheap at that time.

He bought a small farm at age of 14 with savings he accumulated from delivering news papers.

He still lives in the same small 3 bedroom house in mid town Omaha that he bought after he got married some 50 years ago. He says, he has everything he needs in that house as a human being. The house does not have a compound wall or fence.

He drives his car himself everywhere and does not have a driver or security people around him.

He never travels by private Jet. He owns the world’s largest private Jet Company.

His company, Berkshire Hathaway owns 63 firms. He writes only one letter to each of his CEOs in a year, specific to the goals for the year. He never holds meetings or calls them regularly.

He does not socialize much with high society people. He prefers to watch television in leisure.

Bill Gates, the richest (busiest too) man scheduled to meet him for half an hour, but the meeting lasted for some 10 hours.

Some of his advice to youngsters:-

Stay away from credit cards/Bank Loans.

Money doesn’t create man but the man who creates money

Live your life as simple as you are,

Don’t do what others say, listen them, do what you feel good.

Don’t go on brand names, just use those stuff you feel comfortable for you.

Don’t waste your money on unnecessary things; spend on them which are necessary.

After all, it is your life; never give a chance to others to rule on your life.

I wished to write more on his personality... but wordless now

Comment please

Regards
Shabu Thachat