How much to believe in Share Buyback?

Shares Buyback - Does it work for investors?

"the data indicates that of around 70 buybacks in FY19, 75 per cent have under-performed Nifty 50 and 60 per cent have under performed Nifty 500."

Further, 45 per cent have given negative returns. A good example is McLeod Russel which, in FY19, announced a buyback of 4.35 per cent of its shares is down by 90%.

It is fashionable for few companies to announce a buyback when prices go low to boost the share price. But, few does not mean to fulfil that.
PC Jewellers has announced a buyback but could not fulfil when Banks has not given NOC.

So, do not rush to buy stocks when you see share buyback news. It may work for intraday traders and BTST traders but not for everyone. As a retail investor, look at fundamental of stocks more than anything else. Buybacks, promoters buy etc are just add little weightage to many many criteria you should look before you initiate a buy call.

In bull market, buybacks and small buy of shares by promoters happen just to boost stocks price by Chor promoters.

Read: Why all stock buybacks are not a buy signal

Hero MotoCorp is looking at right price with right time to take an entry

Already stock market is trading at high valuations but economic growth is not matching. We need to keep ourselves ready for correction. Small Cap investors need to be more cautious. Small Cap investors have earned very high income in past one and half year. Now, time is to either preserve the gain or shift toward more secure counters. 

Time is very ripe to take an entry into Hero MotoCorp at this price. TVS Motor could also be good to take entry but Hero Moto is looking better. TVS Motor has very high Debt.

Current Market price is Rs 2817. In Oct 2020, HERO MOTO has a tie-up with Harley Davidson which will help the company in premium segment later.

The company is trading at PE 18.1 against its long-term average of 19.6. 

Job loss of common people could hurt this company as this is more into entry-level segment. But, auto segment was already into recession here in India for many reasons. Regulatory reason was also there (BS VI).

I think in case of strong market correction, being here is safer than at any other place. Earning potential is also there.

IOLCP CEO on future of demand-supply of Ibuprofen ahead

IOL Pharma & Chemicals CEO on CNBC TV projected good demand ahead of Ibuprofen. Now, PLI scheme is also attractive to the company. It may take part.

IOLCP CEO has said that 

- It generally takes 2 quarters to benefits from a price hike.
- COVID has a negative impact on Ibuprofen due to report from the EU but now everything is clear. No bad impact of Ibuprofen to covid patients.
- I see demand to pickup.

IOL Pharmaceuticals and Chemicals as stock was in downtrend from long time. Now, it looks like it has got it bottom in recent past. Current Market Price is Rs 684.

Whole Interview on CNBC

Time to look into Pharma Stocks again!

Trading Price is very safe in pharma companies. Most industries have gained good enough now. Pharmaceutical companies run previous year, after that cyclicals followed. 

India can't grow very fast. Price to Earning multiple is already very high for most stocks in the market. Pharma is an Export theme. So, I think it will be safe to load pharma stocks at multiple months average prices.

What about these two?

Alembic Pharma CMP ₹ 976

and Granules India CMP ₹369.

Comment on Twitter. Thanks.

Globus Spirits में मोमेंटम बरकरार है। है ना!

#globusSpirits में मोमेंटम बरकरार है। है ना! 

बस मार्केट के नीचे जाने का डर है। नही तो अभी ये बहुत सस्ता है। हर्षद भाई ने कहा है। :)

Promoter and intermediate relatives are still buying Globus Spirits

I am very bullish on Globus Spirits from many months instead years recently. I have echoed this on micro-blogging site Twitter by mentioning many times.

And, after this strong rally recently, promoters and immediate relative are still buying.

"Globus Spirits insider trade: Acquisition of 4,893 equity shares worth Rs 29.11 lacs by directors immediate relative"

#globusspirits

#Globus_Spirits result is today. Can it give a breakout kind of rally?
CMP 394.

One month consolidation. #GLOBUSSPR

— Satya Prakash 🚩🚩 (@sa8ypr) February 8, 2021

#NIFTY tanked 2.5% and Nifty midcap 100 1.7%.
Few of the portfolio stocks that ended in green:
Acrysil 8%
Nitin spinners 2.77%
Amines and plasticiser 1.3%
Globus spirit 0.8% pic.twitter.com/xtAEVWIMh2

— Satya Prakash 🚩🚩 (@sa8ypr) October 15, 2020

 

Globus Spirits still hold very strong potential if it can post similar numbers. It is not costly after recent leg of gain. 

Agarwal industrial is a multibagger

Agarwal industrial proved to be another multibagger stock. You may need to check Twitter: sa8ypr as I was not updating this blog. I sold some recently thinking how far it can go. A microcap creates fear when Market corrects. But, it is non stop. 

Sugar companies dynamics has changed parmanently

"when it comes to remuneration for farmers, there is no other crop as compared to sugarcane."
Output increase due to new variety and option to use sugarcane for sugar or fuel has changed the dynamics. 

Due to above reasons, we can expect re-rating of Sugar stocks. It will start commanding more Price to Earning than earlier.

Three stocks I have discussed as my favorite. Two big companies are Dhampur Sugar and Balrampur Chini. One mini one was KM Sugar. Now, after 3x return from KM Sugar, I do not suggest this. 

KM Sugar CMP is Rs 31.

How India's sugar sector managed to shrug off its perpetual cyclical nature

#KMSUGAR is at Rs 11.50 from Rs 9 when I mentioned. Now, it started gaining after testing my patience. Good that I re-entered free days back. #stocksToWatch https://t.co/gRb4SoP1uQ

— Satya Prakash (@sa8ypr) August 19, 2020

Ajanta Soya and Agarwal industries

I have mentioned two microcap stocks - Ajanta Soya and Agarwal industries months back. Both are doing very good after some gap.  

Twitter link to the post (Feb 15, 2021).

Ajanta Soya is now at ₹121 from ₹72. You should wait for the rally to stop then see how it behaves. Good stock to load, I think.

Ajanta Soya is into edible oil milling and Branding. It has market in Rajasthan.

Agarwal has also gained recently. This company is in logistics and fuel oil. Please check the tweet series for more details. Agarwal industries is at Rs 206 from Rs 168.

Thanks

MASTEK is still very undervalued

Mastek has doubled from the price I have mentioned but it is still very undervalued. Very good result is coming so this stock will close gap with its peers. In the process, we can have handsome gain.

Time to look for Realty Stocks

Real estate time is back after 10 years. People are hopeful of turnaround. Reality stocks are beaten down very much. Most of the reality stocks has not gained from 10 years. Now is the time to load few and gain handsome.

I have tweeted about Ajmera Realty & Infra India Ltd at Rs 123 on Dec 7, 2020 at 11 AM during market hours. Now, it is trading at Rs 140. 

13% gain in 5 days.

 

Ajmera reality is at Rs 123.
Worth to keep Reality stocks in mind.
How is this?#AJMERA

— Satya Prakash (@sa8ypr) December 7, 2020

Look for few Realty stocks. Check Arvind Smartspace.

It won't be easy to look for good stocks in Realty space as most of them are stressed with loans. You need to look for good companies and good stocks too to made profit as stock market investors.

Two stocks to look for decent gain ahead

West Coast Papers and Bhansali Engineering Polymers are worth checking. West Coast papers is at Rs 173 and Bhansali Engineering Polymers is at Rs 103. 

Paper industry was a hit like many others due to COVID. Paper industry has not receoved as colleges, schools and offices were closed and are still mostly closed. But, due to high valuation of other industry, paper stocks may run now.
Anyway, West Coast papers is a great company. The stock is trading at very attractive valuation to buy. Sales in Sept is 20% lower but margin was a big hit.

Bhansali Engineering Polymers is going to get benefits from lower crude oil price in Dec quarter as well. In Sept quarter it has posted excellent result. The stock is at multiyear low.

BEPL is a vertically integrated petrochemical company that Manufactures ABS which acts as a raw material for leading companies dealing in Automobiles, Home Appliances, Telecommunications, Luggage, Bus Body and various other multifaceted applications.

 

I have mentioned Bhansali Engineering two times in this blog. One time BEPL has worked very good and second time BEPL has not. Bear market has not allowed it to work second time. 

In paper companies, West Coast is doing good from some year. I have mentioned  WSTCSTPAPR few times.

For monthly getting stocks ideas, do track my Twitter account.

West Coast Paper Mills

What stocks are you currently investing in?

Recent addition of stocks to my portfolio are 

Nitin Spinners

Welspun Sorp

Amines and Plasticizers

 

Also, I have sold some from Global Spirit and Prince Pipes after decent gain. But, that was proving to be a mistake. So, added again to Global Spirit. Wish to do so for Prince Pipes too.

These all are mentioned to my Twitter followers. 

Intro of Sayee–Subbulakshmi

Sayee–Subbulakshmi are two dancers who were very famous in bygone era. When watching Aplam Chaplam song, I thought to watch more songs where these dancers are dancing. Upon checking, I saw that these dancers were famous for dancing in sync.

Sayee and Subbulakshmi mostly worked for Tamil films songs. Both have worked for few Hindi songs as well. Here is a famous song Aplam Chaplam from movie Azaad.

Here is another famous song Man Bhavan Ke Ghar.

Tube Investment - 36% market share in bicycle

Tube investment is a Murugappa Group company holds 36% market share in bicycle. Due to COVID, there is a big possibility that personal vehicles demand will increase. Tube Investment has bicycle and auto segments in its portfolio.

Recently Atlas Cycle has announced closure of its last plant due to debt.

The company operates under 3 business divisions namely
1. Engineering – Pipes. 45% of revenue
2. Bicycles –36% market share. 30% of revenue
3. Metal Formed Products – automotive and industrial chain. Railways. 25% of revenue comes from here.

Shanti Gears is a 70% subsidiary of Tube Investment.

CMP: Rs 395

J Kumar Infraprojects from Construction and Engineering space

JKIL (J.KUMAR INFRAPROJECTS LTD) is still very cheap after gaining some in recent time. Worth checking. CMP Rs 96.45.

Index: S&P BSE SmallCap

Construction and Engineering

I am not feeling to write more. That's why not updating blog. But then thought to give some stock ideas to you.

One thought was telling to avoid Roads and construction space as govt may not have funds to supports this industry but then for employment, this cannot be stopped. Poor laborer are employed here. Also, stocks are at dirt cheap now. So, we have reasons to looks at this space.

J Kumar Infraprojects Clients

J Kumar Infraprojects was founded in 1980 and in 2008, it got listed on BSE and NSE.

Recently, I has won Rs 174 Cr project from Mumbai Metro Rail Projects of MMRDA.

P/E 3.38

P/B 0.41

P/S 0.23

Interest Coverage ratio 3.7

Dividend paying company.

RoCE 16

RoE 11

Are there any danger investing in stocks under ASM list?

I was thinking if ASM list tells anything about quality of management? Does it say anything about financials?

Securities in ASM is checked after 2 months. If all criteria discussed does not meet then it will be out of ASM list.

My study confirms that financials and promoters quality is not included under ASM list. ASM list is totally based on market movement of securities.

So, overall you can think securities behavior under ASM may be jerky. I was invested in Indian Metals and Ferro Alloys and it was very jerky. Many days it showed me 5% gain during market hours but next I used to find no gain.

At this COVID time, think little more before investing in ASM stocks as market won't give value to these stocks so soon.

More on Additional Surveillance Measure (ASM)

Multiplexes may gain some business from Single Screen

Corona is hurting PVR and INOX but there is something that may be benefiting these multiplexes also. Single screen owner may not have resources to tide over this lockdown like biggies who run multiplexes in many cities. This may kill many single screen which can transfer some viewers to Multiplexes thought single screen charge very less per movie.

From 7,031 single-screen theatres in 2016, the country by 2019 was left with 6,327 single screens.

PVR and INOX screens are adding screens aggressively but still the screen density has gone down. https://t.co/DcCtrFLiHt

— Satya Pra (@sa8ypr) May 19, 2020

PVR and INOX kinds of stocks you need to keep in radar. If it correct too much you can think of loading in your portfolio. Currently, it has not gained like many others from March 24, 2020 price.

Alembic Pharma is looking good to laod from Pharma industry

Alembic Pharmaceuticals Ltd is a good stock to check from Pharma industry. Available at a very attractive valuation. More fear of Corona and spread means more value to Pharma companies. So, load few pharma stocks.
Alembic Pharma is trading at CMP: Rs 874.
Careful there is one stock named Alembic Ltd too. I only talked about Alembic Pharma.

You can also check IOL Chemicals. Available at very cheap PE but has gained recently. Any bad news can make it down but it does not look like a dangerous stock at this valuation. CMP: Rs 380.


Caplin Point Lab is trading at Rs 325 is also a good stock. It was having very high margin and profit early. After entering to USA market, its expenses has increased. So, it has lost some momentum but I think it is very cheap. Worth checking.

Wait to Load Sugar Stock

I have mentioned Sugar Stock to load after Corona virus bloodbath. That time Sugar stocks gained too as this was treated as consumption stocks. But, I read that 65% to 70% of sugar is used by industry. This way consumption of sugar cannot reach high level.

Wait for Sugar Stocks. It may take some time before Sugar Stocks starts gaining. Sugar stocks are good compared to many years back. But now it not the right time to stick to it.