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Vivek Sukhani
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Joined: 23/Jul/2006
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Posts: 6675
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   Posted: 09/Dec/2006 at 7:40pm |
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Although never looked at ABC but SKF will surely go for buy-back. FAG also likely to do the same. Tumken, somehow the financials never appear to be inspiring. Is ABC also a MNC? The financials as you have said look decent, but as this industry rests on derived demand, I dont know what P/E should they command. At this point of time,I will look for a monopoly co. when it comes to picking up co. which rests on derived demand.... something like a porritts and spencer asia or a foseco india. i read Timken 's international report and they are the global market learders in their category. Actually, these bearing companies are different among themselves.... and hence not very much comparable.
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sanjay3
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Joined: 20/Aug/2006
Location: India
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Posts: 257
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Posted: 09/Dec/2006 at 8:24am |
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basantji
at present level fresh entry in bharti ? your views outlook money recmended
it
Edited by sanjay3 - 10/Dec/2006 at 12:56pm
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SORUB
Senior Member
Joined: 01/Dec/2006
Location: India
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Posts: 155
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Posted: 09/Dec/2006 at 9:15am |
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I THINK GESHIP IS A GOOD PICK NOW...WHATS YOUR VIEW?
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basant
Admin Group
Joined: 01/Jan/2006
Location: India
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Posts: 18403
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Posted: 09/Dec/2006 at 9:20am |
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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nikhil090
Senior Member
Joined: 06/Nov/2006
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Posted: 10/Dec/2006 at 3:40pm |
Dear Vivek,
ABC Bearings was earlier called as Antifriction bearings. It is an indian company. They have their plants in Maharashtra. I agree that they are dependent on derived demand but if Indian economy itself is growing at 8%+, the growth will come in all sectors. The critical point is whether we believe that there is "value" in this company for buying?
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posts: 6675
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Posted: 10/Dec/2006 at 7:33pm |
Hi Nikhil,
Dont get me wrong. I liked the financials and hence I commented. I personally never have had any inhibition against any company with a derived demand but then the market gives a lower value to that category. Thats the reason why somethinf like a Bata trades at a price or for that matter Liberty but BASF which is a leader into leather chemicals trades at a lower multiple.You know what, we suffer from an intellectual inertia and that prevents us from getting into indirect plays like ABC Bearings and the like. We forget that Seimens dont manufacture the entire structurals but sources a lot of matetrials... and it is in that category you will locate gems, for most of them are niches. if you can spend some time on bseindia's website, you will come across value plays even at this moment. the problem is living too much into past or thinking too much about the future. But then buddy, what to go for, ABC or SKF? the valuation may appear tempting for ABC but the other is a MNC and we know these MNCs will immediately jump for a buy-back, if their price corrects significantly, so we have a downside buffer. Also, shall we look at Timken which has such an illustrious parent. What do you say..... I feel even you are as condused as I am.....
Regards,
Vivek
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nikhil090
Senior Member
Joined: 06/Nov/2006
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Posted: 10/Dec/2006 at 8:09pm |
I agree with you Vivek. I am very confused especially on how to differentiate between value and growth. India as I understand is being played for its growth stories right now. NObody is looking at value bargains right now. Moreover, there are other criterias/debate also about cyclicals/non-cyclical, large cap/small cap, value/growth etc. With the interplay of all these criteria's I am not able to decide what becomes a stock worth backing and when. For ex - Lets compare Pantaloon(non cyclical growth stock), SKF (possibly cyclical industry leader), ABC bearings (possibly cyclical industry, player no 5). What should we bet on? At what price? I will just use oversimple PE ratio for comparing - Pantaloon at 50, SKF at 20 and ABC at 9. Does at any point ABC becomes good enough for buying at the expense of Pantaloon? ABC over SKF? What should be the discount that is good enough? To make things easier lets take SKF (industry leader, though cyclical to some extent) - At what PE does it become good enough to buy over any other stock in the portfolio- 20 or 10 or 5?? I am not able to judge this interplay in any quantitative way.
The question of large cap vs small cap also remains. when i can get 25% returns in a HDFC or HDFC bank, then should I invest in Yes bank/DCB?
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posts: 6675
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Posted: 10/Dec/2006 at 8:39pm |
Hi Nikhil,
Search for companies which are least likely to bleed during bad times... compnies whose price fall may inspire you to buy more... think how mych you can lose, and plan your trades accordingly. ABC is looking good.... so press ahead... but then dont lose heart if it goes down by 25 p.c. and get more of them. A company which doles out 40 p.c. dividend and if they are increasing divivdend year on year ... will do well in the long run.
Regards,
Vivek
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