Saturday, January 07, 2006

A missed opportunity - Titan Industries

I first observed Titan Industries when it was around the 90 rupees per share mark. Seemed enticing, but the heavy debt in it's book stilled me away. The 90 in due course became 190 ... then 290... then 390 ... and 490 .... 590 (phew !!!) ... 690 (i was going crazy) ... 790 before it reached a high of 864 rupees per share.

Very few would have observed that the company had reached a P/E of 140. Crazy high for any company. This could have been a potent opportunity for short-selling the scrip. Something I strongly discussed with a colleague (Sonal). But then laxity-mania caught me and i didn't short the scrip. Day 1 after laxity-syndrome, Titan Industries drop by 6.6% and Day 2 it further dropped by 4.5%. Two days of killing lost !!!! (BSE Chart)

An over-heated market is like oil .. slick and slippery. Too much heat more often than not leads to a fire where even good stocks are not spared. Some other mid-cap stocks which are overheated - (stocks with P/E of 40 and above; market cap of over 500 crores)
a) Aztec Software & Technology Services Ltd.
b) Honeywell Automation India Ltd.
c) Trent Ltd.
d) iGate Global Solutions Ltd.
e) Atlas Copco (India) Ltd.
f) Ingersoll-Rand (India) Ltd.
g) J M Financial Ltd.
h) Astrazeneca Pharma India Ltd.
i) CRISIL Ltd.
j) New Delhi Television Ltd.

There are some big names here. Research strongly, there may be a strong case for short-selling and making crazy profits - EVEN IN HIGH MARKETS. (Remember, Mr Market)

3 Comments:

Blogger KS said...

Yeah! i missed out on Titan too although picked it up at 700 levels and sold out at 800 levels to make a small profit. Lets see if it sustains at such expensive P/E levels.

cheers,
-KS

5:47 PM  
Blogger Shankar said...

Hi KS, i think lady luck shined on you. At 700, Titan was a tad expensive. The quarterly profits are good but a price of 450 is justifiable. Anyway, good show to exit on the scrip.
- Shankar

8:01 PM  
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