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Saturday, December 22, 2012

Your question on Amtek Auto!

After my inane musings on TV Songs here, which continues to provide insane amount of Page-views and attention to this blog, I'm back to steady business doing stock analysis and staring at charts!

Question from our valued reader:
Question: Amtek Auto is a mid cap stock and at a 52 week low. It has a good history with good sales and pays regular dividend. This stock owns 61% in Amtek India.

I have done an initial investment at 76 and currently it is quoting around 70. I would like to take more exposure but am not sure why does it keep going down
Any info/analysis from your side would be appreciated.

Answer:
So i have been late in answering this question and stock has already bounced back from support level of 70. With two great green candles, Amtek Auto is hovering at around 84 and next set of resistance levels are at 86, 100, 110 and 145.

110 should be a reasonable target for the scrip, looking at two strong green candles with good volume. 

Fundamentally as well, things are good for Amtek Auto, with a annual topline of Rs 2368 crores and EPS of Rs 13. Last five quarters are steady with flattish topline and bottomline. 

High debt of Rs 3400 crores can be a issue for this scrip, which was probably one of the issues why the scrip was in good downtrend from so many months. Market cap is at around 1800 crores currently. 

Dividend is consistent and firm paid 25% for this year last and two years dividend was at good 50%.

Shareholding for the promoters is slightly increasing which is a good bullish sign and retail shareholding is also low at 2.4% which is again very good for price increase.

All in all, a good scrip and hence can see levels of 110 or so in near future.
Thanks for reading this post and keep writing in to us.

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