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Topic: Smartcat - Portfolio Checkup

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smartcat
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Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243

Posted: 23/Jul/2009 at 5:08pm

Bought Hindustan Tin Works

They make tin cans for the FMCG beverage sector and is a market leader. When you go hang out with your friends, it doesn't matter if you drink Pepsi, Coke, Kingfisher Beer or a Nescafe coffee - Hindustan Tin Works makes money. They also have the infrastructure to print on the tin cans.

Market cap: Rs. 30 crores

P/E: 4.5

Dividend Yield: 5.5%

4 Yr Sales Growth: 14% CAGR

4 Yr Profit Growth: 30% CAGR

FY09 Sales/Profits: Rs. 244 crores and Rs. 6.73 crores

Dividend/share from FY04 to FY08: Rs. 0.5, 1.00, 1.20, 1.50 & 1.60

Sensex Outperformer since 2000: YES

However -

- Net profit margins are around 2 - 3%

- Profit growth is a bit lumpy

- Company is not backward integrated - they source the raw material from a promoter group company.

- Promoter owns 2 or 3 unlisted companies

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Vivek Sukhani
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Joined: 23/Jul/2006
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Posts: 6675

Posted: 23/Jul/2009 at 5:45pm

You may also look at Hindusthan National glass, if this packaging story interests you....

http://www.bseindia.com/stockreach/stockreach.htm?scripcd=515145

Of late, your picks are gradually becoming more and more interesting.

Jai Guru!!!

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smartcat
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Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243

Posted: 23/Jul/2009 at 5:52pm

I have recruited my wife to do the stock screening based on parameters like div yield, sales/profit growth, P/E etc. She has a list of 100 companies in her XLS sheet right now.

Will take a look at HNG - client list looks promising.

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Hitesh Shah
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Joined: 12/Oct/2008
Online Status: Offline
Posts: 3656

Posted: 23/Jul/2009 at 8:38pm

Originally posted by smartcat

I have recruited my wife to do the stock screening based on parameters like div yield, sales/profit growth, P/E etc. She has a list of 100 companies in her XLS sheet right now.

Will take a look at HNG - client list looks promising.

Say no more. All is clear. For a while, some of us may have thought you personally had somehow acquired gyan beyond all measure Tongue

.

Anyway, very honest and upright of you to give credit where it is due Clap

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subu76
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Joined: 25/Feb/2008
Online Status: Offline
Posts: 5709

Posted: 23/Jul/2009 at 10:06pm

Originally posted by smartcat

Bought Hindustan Tin Works

I have not heard of this company....but right off the bat this one looks terribly exciting. Excellent choice.

Looks like you have been reading Peter Lynch recently.

Edited by subu76 - 23/Jul/2009 at 10:07pm

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smartcat
Senior Member

Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243

Posted: 23/Jul/2009 at 12:04pm

For a while, some of us may have thought you personally had somehow acquired gyan beyond all measure

You can't teach an old cat new tricks! :)

I wonder if I should expand my in-house equity research team. Hum Doh, Hamaare Doh!

Looks like you have been reading Peter Lynch recently.

Actually, I started thinking about this style of investing after a casual comment by Basant on why he picked Voltamp (or Thermax, not sure) - high dividend yield on a growth stock will protect downside.

I'm just applying the same logic and unfortunately or fortunately, I'm getting a bunch of micro, small and mid-caps. So basically, all the new stocks I buy will have both HISTORY and PROMISE of growth - with a fairly high dividend yield.

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subu76
Senior Member

Joined: 25/Feb/2008
Online Status: Offline
Posts: 5709

Posted: 23/Jul/2009 at 12:11pm

This one is something linke cork crown and seal which lynch talked about in his book.

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Hitesh Shah
Senior Member

Joined: 12/Oct/2008
Online Status: Offline
Posts: 3656

Posted: 23/Jul/2009 at 12:22pm

Originally posted by smartcat

...- high dividend yield on a growth stock will protect downside....

This is absolutely nothing new. It is a standard opening line used by proponents of dividend-yield investing for years.

My comment may be totally inaccurate, but recently (Sep & Oct 2008 and March 2009), I got the feeling that nothing but nothing protected the downside for several stocks. I loaded up on several Tata stocks and a couple of housing finance stocks which were getting more and more attractive on the basis of their past DPS. They have now appreciated in price and based on past DPS, aren't really that attractive for dividend yield alone.

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