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basant
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Quote basant Replybullet Posted: 03/Apr/2009 at 5:52pm
One of the reports suggest that low material prices do not affect it quite favourably because many of the contracts are cost plus but at some point in valuation one needs to ignore the extarnalities. ALso
companies that are dependent on SEBs will be able to keep their flag flying high. That is because any Govt. which comes to power will start with "power".
 
Now a stock that trades at 3 times Ex cash indicates that the company can theoratically earn back its market cap in 36 months with zero growth and at that  valuation we do ignore the worst as being priced into the stock in case one can get it at that valuation with some degree of research that earnings are real and not just on paper.
 
The environement in case industrial recovery does not happen will deteriorate quite fast though and that is the only threat.
 
 
 


Edited by basant - 03/Apr/2009 at 5:56pm
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Hitesh Shah
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Quote Hitesh Shah Replybullet Posted: 09/Apr/2009 at 9:52pm
EMCO.
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basant
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Quote basant Replybullet Posted: 09/Apr/2009 at 10:24pm

EMCO's RoE is quite low compared to its peer group. It also carries a lot of debt. In tough times we need companies with cash on B/S rather then Debt.

Power generation is a regulated RoE business and makes a stock less interesting we need free Cash flowing businesses with smaller and thinner Balance Sheets and there my choices are limited but the kind of batterting these stocks have taken over the past 15 months even with a 30% upmove in the past few days there does seem a scope for more.

 
Also if one stock moves moves so would the other transformer companies the stock correlation within the sector is strong.
 


Edited by basant - 09/Apr/2009 at 10:29pm
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Quote chimak10 Replybullet Posted: 09/Apr/2009 at 10:40pm
So basant bhai you still think this are tough times?

don't you feel that most of the worst is over?

i personally feel that the worst in stock price is over, but i do think the real economy will still be grow slow .......and down the line lot of stock might suffer..........cause of missed or lower earning. But at the moment the stocks bottom has been made.

But this is coming from a trader's view ..........what do u say
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Quote basant Replybullet Posted: 09/Apr/2009 at 10:50pm
The worst is over in the stock price maybe but not in the results. If this is agenuine recovery stock prices will keep rising as companies report bad results just as stocks kept falling as companies reported good results.
 
But who knows whether the pain is over or will continue for a couple of quarters so we need to buy the stocks with lowest debt and high return ratios and companies that are run by good aggressive managements who know where to park their cash!
 
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Quote Hitesh Shah Replybullet Posted: 15/Apr/2009 at 12:41pm
BBL just hit the upper circuit!
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Quote basant Replybullet Posted: 15/Apr/2009 at 1:17pm
Yes, all transformer companies are on a roll Voltamp is up some 13%. they were going for a song about 15-25 days back and now they are singing a different tune.
 
I do not know whether this is a suckers rally or a dead cat bounce but this rally has created a sense of excitement just see the way in which the smaller companies are participating.
 
There seems to be a buyer's panic!
 


Edited by basant - 15/Apr/2009 at 1:19pm
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Quote nav_1996 Replybullet Posted: 15/Apr/2009 at 1:38pm
Do these transformer companies have any moat? As I understand normal tranformers are commodity business with a large number of unlisted players across country.
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