Points to be analyzed before picking a Stock (Experts kindly contribute)

smallville

smallville

Associate Director - Equity Analytics

Posts : 4119
Join date : 2011-02-03

Good point antonym.. make sense.. After all u discount it well in advance so u buy only the spirit Wink

Now I did the calculation for KGAL on this basis;

NAV = 96.38, EPS = 33.66
SO NAV = 8* EPS = 99.38+ 268.8

And the total is - 365.66/-
Current Share price range - 200-208

Even if we take discounted sector EPS as 7 for cyclicality, this looks valued 33.6*7 = 252/- to me.

Ok now u got one from methods mine & urs Wink

Monster

Monster

Senior Vice President - Equity Analytics

Posts : 1708
Join date : 2011-01-22

Antonym wrote:

Monster wrote:
@Antonym, What's your opinion on CIT and CFI. These two counters looks good for long term investment as they hold attractive investments under their portfolio. BTW I was following your comments on RENU, which let me to dig further into detail.

ps: Currently I am holding RENU and CIT as my long term investments

@Monster: I haven't analyzed CIT and CFI yet. Give me a day or two to go through their financials... In the meantime, why don't you share your findings? Are CIT and CFI also trading at less than what their investments are worth? (Let's start another topic.)

As of 4Q2011, quoted investment of CIT, it's worth Rs 3,125,755,937/=. So, only quoted investment worth Rs 568/- per share.

As of 4Q2011, quoted investment of CFI, it's worth Rs 2,707,952,215/=. So, only quoted investment worth Rs 541/- per share.

I am waiting till the annual report to dig more in to detail. Yes, correct. These two shares never discussed in this forum. We should have separate topic to discuss.

ps: Please don't consider this as a promotion. Personally I don't recommend or promote any share. I have only few hundred shares of CIT. But I am slowly collecting. I don't have a single share of CFI.

Slstock

Slstock

Director - Equity Analytics

Posts : 6610
Join date : 2011-01-22

slstock wrote:

Antonym wrote:@ImeshA: You are on the right track; keep it up!

I have a simple elimination thumb-rule to check whether a share is currently under- or over-valued. Irrespective of the sector, I calculate value of the share as:
NAV per share + 8 X Annual EPS
If the market price is more than this, I would not consider buying it.

It's crude and does not consider the many factors that you analyze. But, as a method of elimination, it works for me.

Interesting formula Antonym. Need to test on some of mine.

I don't own all of the below shares .. but spent some time on this on sake of personal interest and benifit for others to compare

*DIMO marginally fits your bill.
NAV 482
EPS 243

Value = 482+243*8=2462.

60% of it is = Rs 1455 ( trading closer to that now).

* HAYC does marginally. DFCC, DIST with capital gains,

* CSEC,CFVF, COCO,RHL, CTLD,OSEA
* Well there will a bunch of plantation share that will fit in ( KGAL SmallVille already mentioned, MAL,BALA, MASK etc)

there are more..

Soundchips

Soundchips

Senior Manager - Equity Analytics

Posts : 576
Join date : 2011-02-05

On this basis... RICH NTB GUAR KGAL at current prices are very attractive !

Intrinsic

Intrinsic

Manager - Equity Analytics

Posts : 158
Join date : 2011-01-29

Antonym wrote:@ImeshA: You are on the right track; keep it up!

I have a simple elimination thumb-rule to check whether a share is currently under- or over-valued. Irrespective of the sector, I calculate value of the share as:
NAV per share + 8 X Annual EPS
If the market price is more than this, I would not consider buying it.

It's crude and does not consider the many factors that you analyze. But, as a method of elimination, it works for me.

Dear Antonym,

Your rule of thumb really works ! + rep from me.

Chief

Chief

Stock Analytic

Posts : 14
Equity Stars : 4758
Reputation : 3
Join date : 2011-05-27

Antonym wrote:@ImeshA: You are on the right track; keep it up!

I have a simple elimination thumb-rule to check whether a share is currently under- or over-valued. Irrespective of the sector, I calculate value of the share as:
NAV per share + 8 X Annual EPS
If the market price is more than this, I would not consider buying it.

It's crude and does not consider the many factors that you analyze. But, as a method of elimination, it works for me.

Could you please explain how you formulated your "elimination thumb-rule"? And how accurate is it in terms of a share being overvalued or undervalued? Just curious on this rule as I'm still in the process of learning fundamental analysis, technical analysis etc. So an explanation on this would be greatly appreciated Antonym. Smile

RichDad

RichDad

Manager - Equity Analytics

Posts : 184
Equity Stars : 5052
Reputation : 42
Join date : 2011-05-27
Location : Colombo

@ Antonym,

I've found some more stocks which are satisfying your rule of thumb.

CDB
CSD (this is having a negative EPS in the last qtr)
TWOD (if the court case be favorable)

Cheers! Smile

Marketinvest

Marketinvest

Senior Manager - Equity Analytics

Posts : 336
Equity Stars : 5143
Reputation : 21
Join date : 2011-07-02
Location : Colombo

Big player moves and trades going in large parcels if we can analyse that we could pick the right stock

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Points to be analyzed before picking a Stock (Experts kindly contribute)

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