Saturday, January 22, 2011

Have some investment opportunities started emerging?

With a correction of more than 10% in NSE Nifty over the last two months from a high of 6338 on 5 November 2010 to 5624 on 17 January 2011 and more than 20% in BSE SMALL CAP index from a high of 11168 on 10 November 2010 to 8860 on 17 January 2011, there are fair amount of chances that some investment opportunities will really be available. There is a big contradiction between the two set of companies since some large caps are still trading at a P/E multiple of 30-50 while some small caps are available just near their book value with a P/E of 4-10. Following is the list of some of those small caps:

CompanyCurrent Market PriceMarket CapTTM ProfitsTTM P/EAverage Profits of last five yearsP/E of five year average EPS
Ador Welding18425028.858.6730.69.4
Asahi Songwon749115.995.697.512.14
Eldeco Housing153309.223.255.95.07
GM Breweries10699.216.595.989.1410.85
Gandhi Special Tubes12017725.926.8417.829.93
Premco Global257.71.535.030.888.75
WimPlast17010217.15.966.30616.17
Dynemic Products2528.327.024.042.7510.31
Plastiblends17011013.668.0512.778.61

And there are many more like Natural Capsules @51, Medicaps @65, Eimco Elecon @270, Garware Wall Ropes @72, VTM @160, Mac Charles @ 230, Mazda @ 110, SI Paper @ 47. Most of the companies I have mentioned have been profit-making companies and some are consistently giving dividends over the last 15 years and still Mr market is quite depressed about their future. None of these are burdened with high debt that may affect their future profitability and existence. Are they really value traps?
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1 comment:

kdaaku said...

I have covered a couple of stock mentioned here in my blog -

Gandhi Special Tubes - A buy for sure, although it hasn't moved much in the past 5 yrs inspite of exceedingly good results - http://kiraninvestsandlearns.wordpress.com/2011/01/04/stock-analysis-gandhi-special-tubes-gandhitube/

Mazda Ltd - Needless diversification, I'd likely stay away from the stock - http://kiraninvestsandlearns.wordpress.com/2010/12/19/stocks-analyzed-and-rejected/

Would love to hear your thoughts on these two.

I will check on the others you mentioned.

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