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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » DIESEL & MOTOR ENGINEERING PLC (DIMO.N0000)

DIESEL & MOTOR ENGINEERING PLC (DIMO.N0000)

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BenZ

BenZ
Manager - Equity Analytics
Manager - Equity Analytics
Report released today ...
2010/11 Financial year,
Q1 EPS - 17.53
Q2 EPS - 35.12
Q3 EPS - 111.91
Q4 EPS - ?? OMG it will be awesome right ??
Annualized EPS = 111.91 x 4 = 447.64
PER = 1800/447.64 = 4.02

Where will it go on Friday ???
If we assume PER of 10 is fairly valued, then Share price would be 447.64 x 10 = 4476.4  Question



Last edited by Quibit on Fri Nov 29, 2019 9:42 am; edited 2 times in total (Reason for editing : Format condensed)

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics
Suspect

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
@mono wrote: Suspect

Quite amazing performance. But How long will this hyper demand live? No long life? Again, those who bought at this higher prices.....

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@BenZ wrote:Report released today ...
2010/11 Financial year,
Q1 EPS - 17.53
Q2 EPS - 35.12
Q3 EPS - 111.91
Q4 EPS - ?? OMG it will be awesome right ??

Annualized EPS = 111.91 x 4 = 447.64

PER = 1800/447.64 = 4.02

Where will it go on Friday ???

If we assume PER of 10 is fairly valued, then Share price would be 447.64 x 10 = 4476.4 Question

OK.. do u want us to believe this valuation? There's no point in taking the last qtr EPS and annualizing it to project the value..
We cant expect this performance to last as duty gets reduced on the way every month now and ppl even start opening LCs and bringing down vehicles.. MY view is its better to take an avg...
So with current performance DIMO can be valued around 2000-2200.. But thats again a great figure I guess... This is only my thinking..

Anyone analysed this and have other views?

Academic


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Ya. The boom in luxury automobile and other vehicles sales was observed after lifting the tax. Specially in October as people were hurry to cultivate the opportunity thinking the tax would be re-enforced in November budget speech. That is why you see this jump. I dont expect the same performance in Jan-March quarter. Anyway they will have a growth in long run. Hope Nano will be another cash-cow for them. However anualizing 3rd quarter EPS is not fair.



Last edited by Academic on Tue Feb 15, 2011 5:01 pm; edited 1 time in total

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@smallville wrote:
@BenZ wrote:Report released today ...
2010/11 Financial year,
Q1 EPS - 17.53
Q2 EPS - 35.12
Q3 EPS - 111.91
Q4 EPS - ?? OMG it will be awesome right ??

Annualized EPS = 111.91 x 4 = 447.64

PER = 1800/447.64 = 4.02

OK.. do u want us to believe this valuation? There's no point in taking the last qtr EPS and annualizing it to project the value..

Right on the money smallville. I have always believed that it's absurd to multiply a quarters EPS by 4 to get the annualized EPS. 4 * 9 month earnings / 3 is more realistic. My favourite approach is to add the last four quarters.

As for sustainability. There is no way these figures can be maintained. However DIMO is in better shape than the other motor companies (not just saying that because I have a few hundred DIMO shares). They are also the agents for Bosche, Osram, Blaupunkt and Siemens in addition to Mercedes Benz. All famous Germans brands. However, I think a large part of their revenue also came from Tata buses and Lorries. The duty cuts had no impact on that segment.

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics
i think there is a massive subsidy given to transport vehicles by the recent budget. DIMO will benefit from that

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@mono wrote:i think there is a massive subsidy given to transport vehicles by the recent budget. DIMO will benefit from that

Yup... For passenger vehicles

TelesHope

TelesHope
Senior Equity Analytic
Senior Equity Analytic
Sustainability may be a definite concern...This might be a safe play for a harvest while the sun shines Smile

Berryfund


Stock Analytic
Stock Analytic
@smallville wrote:
@BenZ wrote:Report released today ...
2010/11 Financial year,
Q1 EPS - 17.53
Q2 EPS - 35.12
Q3 EPS - 111.91
Q4 EPS - ?? OMG it will be awesome right ??

Annualized EPS = 111.91 x 4 = 447.64

PER = 1800/447.64 = 4.02

Where will it go on Friday ???

If we assume PER of 10 is fairly valued, then Share price would be 447.64 x 10 = 4476.4 Question

OK.. do u want us to believe this valuation? There's no point in taking the last qtr EPS and annualizing it to project the value..
We cant expect this performance to last as duty gets reduced on the way every month now and ppl even start opening LCs and bringing down vehicles.. MY view is its better to take an avg...
So with current performance DIMO can be valued around 2000-2200.. But thats again a great figure I guess... This is only my thinking..

Anyone analysed this and have other views?

My dear friends; see following forcast.

Security Q2 EPS Cur. price PE Q3 EPR An Q4 EPS Price1 Price 2
DIMO 111.91 1800 16.08 167.87 223.82 2,700 3,600

Based on first six months EPS, we can project Q3 EPS which is accurate at the movement. However, if we assume share is undervalued price level 1 is a fair value for DIMO. But current market momentum is not overbought and trend is not "bullish".

However, it is definite that DIMO will take it position in the market in short run. Nature of share is highly illiquid therefore it requires split which will depend on the intention of the major shareholders.

11DIESEL & MOTOR ENGINEERING PLC (DIMO.N0000) Empty DIMO is useless, Tue Oct 11, 2011 2:48 am

malsina


Stock Trader
Hi Guys.
I purchased 500 DIMO shares few months ago as there were many people recommended this undervalued fundamental share. But I'm losing money day by day.
Can some one please let me know what is going wrong? Did I do a wrong decision or something else? My unrealised loss is over Rs 80,000.00
I dont know what to do. Please help. I'm thinking of selling this at a loss and buy a non value share.. Sad

I had enough.

My PF is full of undervalued shares but losing money. I bought all for reasonable prices.


Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@malsina wrote:Hi Guys.
I purchased 500 DIMO shares few months ago as there were many people recommended this undervalued fundamental share. But I'm losing money day by day.
Can some one please let me know what is going wrong? Did I do a wrong decision or something else? My unrealised loss is over Rs 80,000.00
I dont know what to do. Please help. I'm thinking of selling this at a loss and buy a non value share.. Sad

I had enough.

My PF is full of undervalued shares but losing money. I bought all for reasonable prices.



Dimo is one of the most undervalued shares in the market. Yes.
Dimo has not moved yet and all fundamentals are not working at CSE yet.Yes

Investing takes patience. But if you think you need quick gain And DIMO is a opportunity cost loss then joining the speculative play band wagon is an option you will have to decide on.

All I can say is this.Fundamentals have gone to .... At CSE now. Its time will come.When? I do not know.
CSE is a gamblers den now.

Think what are your ultimate goals. Decision is yours. I cannot tell to sell or hold as you may have to go through opportunity costs. If at all DIMO runs Properly I see at atleast a 50% gain based on fundamentals. And again fundamentals are not working yet. Chicken and egg story



Last edited by slstock on Tue Oct 11, 2011 8:46 am; edited 1 time in total

sriranga

sriranga
Co-Admin
@slstock wrote:
@malsina wrote:Hi Guys.
I purchased 500 DIMO shares few months ago as there were many people recommended this undervalued fundamental share. But I'm losing money day by day.
Can some one please let me know what is going wrong? Did I do a wrong decision or something else? My unrealised loss is over Rs 80,000.00
I dont know what to do. Please help. I'm thinking of selling this at a loss and buy a non value share.. Sad

I had enough.

My PF is full of undervalued shares but losing money. I bought all for reasonable prices.



Dimo is one of the most undervalued shares in the market. Yes.
Dimo has not moved yet and all fundamentals are not workig at CSE yet.Yes

Investing takes patience. But if you think you need quick gain And DIMO is a opportunity cost loss then joing the speculative play band wagon id an option you will have to decide on.

All I can say is this.Fundamentals have gone to .... At CSE now. Its time will come.When? I do not know.
CSE is a gamblers den now.

Think what are your ultimate goals. Decision is yours. I cannot tell to sell or hold as you may have to go through opportunity costs. If at all DIMO runs Properly I see at alteast a 50% gain based on fundamentals. And again fundamentals are not working yet. Chicken and egg story

Well said slstock.
Nowadays we can see the lack of basic investing skill.
Hope fundamentals will shine near future in CSE.

http://sharemarket-srilanka.blogspot.co.uk/

ranga777


Equity Analytic
Equity Analytic
as somebody said patience is the name of the game dont be in a hurry to earn if you try to earn in a hurry you will end up in losing more i am saying you these according to my experience wait till your day comes i think it will come soon

Jana1


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
If you dont have patient to wait atleast 10 years to get profit don't come to stock mkt. This is not a place for you. first develop patient that s very important, actually most of us don't have

pathfinder

pathfinder
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Jana1 wrote:If you dont have patient to wait atleast 10 years to get profit don't come to stock mkt. This is not a place for you. first develop patient that s very important, actually most of us don't have
absolute truth!!!!

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics
I take a different view.DIMO is a good share .It is fundamentally Strong .
But company is not looking after their shareholders .No share spilits.
Very illiquid share. No rights issues .
You will have to hold on , but dont forget value is there .You will get it if you have some more patience.

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics
There are different periods in CSE. Look at last year. When the market is stagnant people are playing with small shares and speculative shares. With runs on small cap shares indices are not moving.
When indices are moving people through away speculative shares and move on to others. Best thing is hold good valued shares, participate in runs on speculative shares but dont hold.

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics
Yes, DIMO is one of the most stagnant shares in the market. This is possibly, the price it’s trading as most retailers can’t afford it. To buy 100 shares you have to allocate Rs.135,000/- at current price. The liquidity factor is the other. If you want a big quantity you can’t collect without moving price. As we can see this trend in PHAR, SLND, ASHO, etc.

This same scenario happened to CFIN in last year. It was the mostly sound share in the financial sector with a PE of around 6X when all others were at above 15X. It was traded in Rs.820/- to Rs.870/- for about three months. Then dropped to Rs.750/- levels. All of a sudden it started the climb. Lot of people exited from it when it reached Rs.900/- level, as it was a good price for the stagnant share. But it went up to its true value and hit Rs.1, 700/-, giving more than a 100% return within a very short period.

Despite all this DIMO is good share to keep at least 100 shares in the portfolio.

• Since it’s illiquid very difficult to buy on the run.
• May be only fundamentally sound share with a very good management without a share split announced yet. So it can happen at any time, possibly when the market conditions become good.
• Asset re-valuation is pending.
• Last year dividend was Rs.61/-

Dileepa


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@malsina wrote:Hi Guys.
I purchased 500 DIMO shares few months ago as there were many people recommended this undervalued fundamental share. But I'm losing money day by day.
Can some one please let me know what is going wrong? Did I do a wrong decision or something else? My unrealised loss is over Rs 80,000.00
I dont know what to do. Please help. I'm thinking of selling this at a loss and buy a non value share.. Sad

I had enough.

My PF is full of undervalued shares but losing money. I bought all for reasonable prices.

Since many investors seems to be ignoring the facts, a word about fundamentals.
Assume there are two investors A and B.
A is the smartest guy in the world, he gets all information before others and he invest on junk shares.
B is an average investor, he play safe and invest only on fundamentals.

Here is the scenario:
①Since A is so smart, he knows exactly when price is going go up or down.
A does following transaction on ECL.N (a popular share among speculators)
----------------------------------------------------------------------
Jan-09 Buy 100000 shares @ Rs.1.00 = 100,000
Apr-10 Sell 100000 shares @ Rs.3.50 = 350,000 ⇒ profit 250,000
Dec-10 Buy 140000 shares @ Rs.2.50 = 350,000
Jul-11 Sell 140000 shares @ Rs.7.00 = 980,000 ⇒ profit 630,000
Aug-11 Buy 163333 shares @ Rs.6.00 = 980,000
Sep-11 Sell 163333 shares @ Rs.8.50 = 1388333 ⇒ profit 408,333
----------------------------------------------------------------------
Total Profit of A = 0.8 Million (after transaction cost)
============================================

②Since B believe on safety and fundamentals, B does following.
----------------------------------------------------------------------
Jan-09 Buy 1640 shares @ Rs. 61.00 = 100,000
Sep-11 Sell 1640 shares @ Rs.1400.00 = 2,295,082 ⇒ profit 2,195,082
----------------------------------------------------------------------
Total Profit of B = 1.9 Million (after transaction cost)
============================================

If you look carefully I have used actual data and
I have selected best possible entry/exit points for A.

In summery,
・You have to be seriously lucky and smart to be A. Yet still your take a huge risk by investing on junk.
・Even after being so lucky and taking that risk Fundamentals(B) beats you in the long run.
・Above may not be an ideal example, but you are welcome to point out if there are any mistakes on calculations.







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