StockFundoo Methodology

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Sunday, October 28, 2012

Hindustan Construction (HCC) Stock Analysis: Turnaround in offing!

India faces a chronic shortage of anything which remotely resembles Infrastructure. With more than 50% of India’s 1.3 Billion population squeezed in urban areas, this rapid urbanization of India creates a tremendous shortage of roads, highways, power supply, residential spaces, clean drinking water, sewage systems and  transportation to name a few. There are a few renowned private sector players which operate in these doomed sectors, doomed currently because of government apathy, high interest rates, shady practices and cloudy political ecosystem.

Hindustan Construction Company (HCC) is a 85 year old business conglomerate operating in Infrastructure space and have delivered marquee projects in engineering, construction, hydro power, nuclear power, expressways, water and social infrastructure to name a few. HCC has developed Lavasa, a new hill city, a huge project over 12,500 acres executed for the first time in the history of modern India. India, with rapid urbanization, needs dozens of new Lavasa’s to reduce and manage population pressure on top 5 metros.

Saturday, October 27, 2012

Did you make any Money this Week from StockFundoo Trading Signals!

Every weekend we will take stock of how the Trading Signals fared this week and did we make any money from the Trading Signals. Pls see the Profit/Loss from the Signals published this week. Gross Profit this week has been 12.12% for total of 8 trades, out of which 5 were new Swings initiated this week and 3 Swings continued from last trading day of past week.

Metals were shorted en masse on 19th Oct, with Hindalco, SesaGoa and TataSteel, all Shorted within 90 minutes on morning of 19th. These metals continued to trade lower this week, hence StockFundoo continued the Short swing for metals.
Out of 5 new trades this week, 3 were profitable and 2 were losers. Biggest winner was again DLF short and TCS Long, hence Shorts made considerable profit this week on a overall basis. Pls see the table below:

Did you make any money from Trading Signals this week? Pl see FAQ on top-right on how to make use of these signals.
Thanks for reading this article and keep writing in to us.

Wednesday, October 24, 2012

Camson Biotech: Technical Outlook and Fundamental Update!

We analyzed Camson Biotech about 6 months back and our fundamental analysis on Camson is available here. Camson is a gem of a scrip, and this indigenous biotech research firm has a rich portfolio of 22 biocides, 7 bio-fertilizer, and 17 hybrid seeds. Camson has a research infrastructure spread over 25 acres with modern labs and field testing facilities. Additionally firm has also developed a Proprietary Technology platform with microorganism database, screening technology and product compound library.

The results over last two quarters have been good with annual revenues now at 112.7 crores, which is about 13% growth over last year and EPS at Rs 12.49. Book Value is improved to Rs 69.27 per share and at current market price of 56.35, Camson is still available at decent discount to Book Price.

Saturday, October 20, 2012

Did you make any Money this Week from StockFundoo Trading Signals!

StockFundoo has started publishing Swing Trading Signals from last one week or so. Every weekend we will take stock of how the Trading Signals fared and did we make any money from the Trading Signals. Pls see the Profit/Loss from the Signals published this week. Gross Profit this week has been 10.03% for total of 17 trades, out of which 10 were profitable and 7 were losers. Biggest winner was DLF short, which was mired in controversy this week. Pls see the table below:

Did you make any money from Trading Signals this week? Pl see FAQ on top-right on how to make use of these signals.
Thanks for reading this post and keep writing in to us. 

Your questions on Nalco, Hexaware and Eros International and Our answers!

Dear Readers:
We have received few questions from you in past few days and here are they and our replies:

Q: I regularly visit your website and I think you are doing a good job with your analysis. Can you please write something about Eros international. I think its a good company in the media segment.

A: Technically, Eros is near to its support point of Rs 159 and 153, which will be very difficult to break. Eros has been in a downtrend for last one year and next support is also close which is about 137 and 125, which is all time lows. Upside, 185 to 215 range will be difficult to break, so that's the upside targets for short term.

Sunday, October 14, 2012

Ion Exchange Stock Analysis: Challenge of providing Pure Drinking Water to burgeoning population!

Pure Drinking Water is one of the most challenging and underrated issues for most emerging economies, India being one of them. We are already seeing states in India sparring over river water distribution issues and this problem is going to compound in days to come. Consumer is not willing to pay market rates for base commodities like Electricity, LPG, Petrol, Diesel and he will not pay anything for Water. This severely complicates the water cleaning and distribution ecosystem and economics of states and hence this problem will keep on compounding until it blasts in our face.

Shrewd investors like Private Equity realize this challenge in India and are already investing in several cutting edge companies which do research and implement waste water treatment, desalination and effluent treatment  etc. Several international players are aggressively entering Indian markets and today we talk about one of the few listed companies in this space - Ion Exchange.

Update on REI Agro Stock Analysis: Bumper Dividend Crop of 50%

We wrote on REI Agro about 6 months back here, on how the firm is severely undervalued and is available at deep discount valuations. Two quarterly results are out since our post. REI Agro has delivered bumper topline results of 1536 crores and 1508 crores in last two quarters, which is 50% higher than 1002 crores in Dec, 11 quarter. So the firm is clocking a revenue runrate of 6000 crores annually and even today is available at total market cap of just about 980 crores.

Not only this, promoter shareholding has gone up in last two quarters from 47.70% to 49.59%. Now, REI Agro has come up with a bumper 50% dividend which is highest ever dividend payout for the firm. There are  existing challenges for the stock like high debt and promoter pledging their stock, but is expected to deliver multi-bagger valuations for patient investors.

Meanwhile, keep enjoying the bumper dividend yields. 

Sunday, October 7, 2012

Liberty Shoes Stock Analysis: Leader in Shoe Manufacturing and Strong Brand!

Liberty Shoes is one of the top Shoe Manufacturing and Retailing company in India, and stands among top 5 Leather Manufacturing firms in the world. Liberty Shoes is a 50 year old firm and now boasts of top Indian Shoe brands such as Coolers, Gliders, Fortune, Senorita, Footfun etc. The firm produces more than 50,000 shoe pairs per day and retails them through 400 exclusive company showrooms.

Liberty Group compromises of three firms - Liberty Shoes, which is the listed entity, Liberty Retail Revolutions, which is a chain of high end showrooms across the country and Liberty Whiteware - manufacturer of sanitary-ware. The group boasts of combined turnover in excess of Rs 600 crores per annum, with Liberty Shoes turnover in the range of Rs 330 crores for year 2011-12. The firm   is also Marketing and Brand aware and has roped in top Bollywood star - Hrithik Roshan - as its brand ambassador. Branding is what differentiates a run of the mill Shoe company from another premium Shoe Brand with sustainable pricing power.

Friday, October 5, 2012

Another Flash Crash: 15% Down Spike in Nifty: Chart

At 9:55am this morning, there was a whooping 15% spike in Nifty for a brief second. This resulted in Nifty trading 2.5% lower for a while later. Pls see the 30 min chart and 1 min chart below.

What caused this Flash Crash? There might be several traders whose Stop Loss would have been damaged and tremendous loss caused because of this. Pls see below:

Update: Later in the Day NSE updated that "Fat Finger" trade by dealers at Emkay Global, sold 650 crores of equities below market price. This caused severe price correction in bluechip stocks and hence took Nifty down along with them.

Question to ask to Nifty is that: Why to allow primitive price discovery mechanism at bourses. Why can't you sniff for orders with error, i.e. punched price severely away from current market price and halt execution of such orders.

The sentiment was totally destroyed this morning, and Midcaps and Smallcaps took a heavy beating, all thanks to Emkay Global Fat Finger Broking Services. Cheers!
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