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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posts: 6675
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   Posted: 19/Jul/2009 at 9:55am |
Originally posted by smartcat
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Surprising....you used to appear as one of the most 'enterprising' investors.
However, in stocks, you have to take into account relative valuations, rather than just take into account absolute valuations. So, although a Great eastern Shipping may be offering me 3.5 p.c yield, but I may sell it if SRF is getting me almost 9-10 p.c. So, its not just what valuations my stocks are commanding, its also important to keep the eyes open to spot better opportunities. |
What I mentioned there was just my new entry/exit strategy, not a stock picking plan. Dividend yield is not everything for me - I need to like the business before I buy it.
For example, I gave Graphite India and TNPL a pass inspite of high yield.
Graphite India gets a big percentage of its sales from outside India - that could affect its performance in the future (it hasn't in the past, but still..). Plus Graphite India has no control over its raw material costs.
TNPL is a bagasse based paper company. And bagasse is obtained from sugar cane. And sugar cane industry in India is crazy. So TNPL is a big NO for me - I would rather go for WCPL which has control over its raw material costs. |
I see your argument like this:
Business is a necessary condition, but dividend is a sufficient condition for making an investment.
So, in effect, dividend becomes a part of your stock-picking plan without your realising it.
Edited by Vivek Sukhani - 19/Jul/2009 at 9:56am
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Jai Guru!!!
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go4sheel
Senior Member
Joined: 23/Mar/2009
Location: India
Online Status: Offline
Posts: 105
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Posted: 20/Jul/2009 at 4:29pm |
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Hi Smartcat,
According to CNBCTV18:
"One stock which has been highly buzzing on back of this Adani Power IPO is Adani Enterprise which is a listed entity and that is because Adani Enterprise holds nearly 153 crore shares in Adani Power, which is going to be coming up with an IPO. If you just assume Rs 100 the total value of that stake in Adani Power comes to around Rs 15,300 crore (fifteen thousand three hundred crore) and if we count Rs 110 per share then it goes to Rs 16,800 crore"
Now it is said that AEL holds 83% in APL and post IPO it will comedown to 73.5% or 70.25%, then how did they arrive at 153 crore shares...?
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smartcat
Senior Member
Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243
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Posted: 20/Jul/2009 at 5:03pm |
http://in.reuters.com/article/businessNews/idINIndia-41170720090720
| The IPO through a fresh issue of 301.65 million shares will constitute 13.84 percent of the post-issue capital. |
13.84% equals 30 crore shares
So, 70% equals around 150 crore shares.
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go4sheel
Senior Member
Joined: 23/Mar/2009
Location: India
Online Status: Offline
Posts: 105
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Posted: 20/Jul/2009 at 12:39pm |
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If Adani Power lists at Rs.110 then its value in AEL will be Rs. 16800 crore (153 crore shares), so what will be value of AEL without considering the Adani Power's value...?
Current market cap of AEL @ 850 = Rs. 20,000 crore.
So post IPO listing @ Rs. 110 = Rs. 16800 + ?
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smartcat
Senior Member
Joined: 29/Mar/2007
Location: India
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Posts: 4243
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Posted: 20/Jul/2009 at 11:36am |
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Adani Enterprises could have a 20% higher market cap than Adani Power, in my opinion.
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go4sheel
Senior Member
Joined: 23/Mar/2009
Location: India
Online Status: Offline
Posts: 105
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Posted: 22/Jul/2009 at 12:18pm |
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Hi Smartcat,
After Adani Power, have you studied the plans of Indiabulls Power and Sterlite Energy...? is there any value unlocking in them...?
Also are you tracking Cals Refinery...?
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go4sheel
Senior Member
Joined: 23/Mar/2009
Location: India
Online Status: Offline
Posts: 105
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Posted: 22/Jul/2009 at 12:22pm |
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Hi Smartcat,
In IDFC-SSKI and Enam report they have shown that after FY 2014, the growth of Adani Enterprise will be quite flat if no capacity addition of power is done... then what will be the PE of AEL at that time, because then that will lead to PE contraction...
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catcall
Senior Member
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 1076
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Posted: 22/Jul/2009 at 9:12am |
Originally posted by go4sheel
Also are you tracking Cals Refinery...? |
Unless you have a speculative interest in mind, stay away from Cals refinery , one look at it's 'vital statistics' will tell you why...
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There are two times in a man's life when he should not speculate-when he can't afford it and when he can-Happy investing!
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