Savita Chemicals
Pl keep this scrip in your watchlist
I'll start with 'things-that-hurt' on this scrip. The stock -
a) Is rather close to it's 52-week high
b) Is below my 10 crs a quarter rule
c) Is fairly above it's NCAV (4x above)
d) No news value
Now, what I like about this stock.
a) Savita Chemicals has improved in sales and profits by 20% for the last three quarters
b) It's fwdP/E ratio is 11.08
c) The company hardly deploys debt in it's balance sheet .. just 20.24 crs
d) Cash in the company is 21.66 rupees per share. Not much, but good enough to convince me of another dividend ... of atleast 12 rupees.
e) Dividend yield would come to 2.33%
The charting of this scrip has me stumped. Savita Chemicals has virtually no volumes to speak off, however it has consistently grown in the stock market. Price on 16-March-2004: 100 rupees; Price on 16-March-2005: 235 rupees. Only one dip - in the month of Nov 2005 when it went down to 275 from 375. I feel the stock will fall down to 350 rupees and not more ... sooner or later. It might be a good idea to pick a small stake once the stock touches 375 rupees to a share.
I'll start with 'things-that-hurt' on this scrip. The stock -
a) Is rather close to it's 52-week high
b) Is below my 10 crs a quarter rule
c) Is fairly above it's NCAV (4x above)
d) No news value
Now, what I like about this stock.
a) Savita Chemicals has improved in sales and profits by 20% for the last three quarters
b) It's fwdP/E ratio is 11.08
c) The company hardly deploys debt in it's balance sheet .. just 20.24 crs
d) Cash in the company is 21.66 rupees per share. Not much, but good enough to convince me of another dividend ... of atleast 12 rupees.
e) Dividend yield would come to 2.33%
The charting of this scrip has me stumped. Savita Chemicals has virtually no volumes to speak off, however it has consistently grown in the stock market. Price on 16-March-2004: 100 rupees; Price on 16-March-2005: 235 rupees. Only one dip - in the month of Nov 2005 when it went down to 275 from 375. I feel the stock will fall down to 350 rupees and not more ... sooner or later. It might be a good idea to pick a small stake once the stock touches 375 rupees to a share.
posted by Shankar Nath at 9:04 PM
85 Comments:
Update: The stock rose by 3.48% today. Price has jumped up to 446 rupees on the BSE
Hi Shankar..
I must say excellent blog... And what I admire the most is yr selection/view on stocks purely based on Fundamentals.
I have KEI Industries / Paramount Communication / JK Cement / Marksans Pharma / IDFC / TCS / AlokIndustries / Aarvee Denim in my portfolio.
Please share your expert view on these scripts.
Thanks and Regards,
Supal
Hi Shankar,
Very good analysis. I am a software Engineer and regularly invest in stocks. Actually I do not have much knowledge in the finance domain but do look at the basic things like profitability, growth, order book, debt etc.
Appreciate your analysis.
Thanks,
-Amol.
These small caps stocks are closley held. As a result the volumes are low. It may be a good idea to see the volumes when this stock drops to Rs.350, if the volumes are low or max 110% of the daily trading average volume, then it makes sense to buy it. If the declining volumes are large - then there can be insider trading or so large investor is dumping the stock. In both cases, its not worth buying the stock at Rs350 or below.
Arun Kottolli
arunkottolli.blogspot.com
Hi Amol,
You might want to start by reading a book called "The Intelligent Investor" by Benjamin Graham.
That's step A. For step B, start practicing the learnings given in each chapter of that book to Indian stocks.
Warm Regards
Shankar
Shankar,
Thanks for the suggestion. Incidently I am on the 5th chapter of the book :-). I have read a few books like 'One up on wall street', 'beating the street' by Peter Lynch, also "the warren buffet way". But somehow I feel Finance guys have a lot more knowledge in this field than us. I am following your blog, its good and helping us to gain better understanding.
-Amol.
What is hell !!! The stock is at 530 rupees. A good 100 rupees more .. in 15 days. And I didnt buy !!!
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Beam me aboard, Scotty..... Sure. Will a 2x10 do?
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Calvin, we will not have an anatomically correct snowman!
The gene pool could use a little chlorine.
actually, that's brilliant. Thank you. I'm going to pass that on to a couple of people.
Lottery: A tax on people who are bad at math.
Friends help you move. Real friends help you move bodies
Give me ambiguity or give me something else.
Wonderful blog.
When there's a will, I want to be in it.
Wonderful blog.
If ignorance is bliss, you must be orgasmic.
All generalizations are false, including this one.
Please write anything else!
Magnific!
When there's a will, I want to be in it.
Hello all!
Give me ambiguity or give me something else.
Oops. My brain just hit a bad sector.
Energizer Bunny Arrested! Charged with battery.
Build a watch in 179 easy steps - by C. Forsberg.
Magnific!
640K ought to be enough for anybody. - Bill Gates 81
Build a watch in 179 easy steps - by C. Forsberg.
A flashlight is a case for holding dead batteries.
The gene pool could use a little chlorine.
640K ought to be enough for anybody. - Bill Gates 81
A lot of people mistake a short memory for a clear conscience.
Oops. My brain just hit a bad sector.
Nice Article.
Change is inevitable, except from a vending machine.
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