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WTF: Sintex Promoters Didn't Buy After All

I noted last quarter – on October 13, 2011 – that :

The promoters of Sintex “plan” to buy 4.78% and take their stake up to 40%, says MD Amit Patel in a post-earnings conference call.

I don’t really get this. Why would you announce a purchase BEFORE you buy? The stock will run away. Typical promoter buys are announced about 10-15 days after the acquisition of shares. There needs to be a SEBI restriction that needs them to announce within a week, but that’s a different story.

It’s been a quarter from then, and two things have happened:

a) The promoters have NOT bought a single share. Not a single announcement has come from Sintex to the exchanges post October 2011 – and they have to announce any promoter buys.

b) The stock price has fallen over 42%, from 115 then to Rs. 66 now.

Sintex chart

 

The point is: Don’t trust announcements, especially where they say they will do X, when they can be doing X already.

I really liked Sintex promoters before this and now have a bad taste in the mouth. I have traded the stock – mostly successfully but recently took a loss when the stock fell from 185 to 140 (my 25% wide stop was hit). But the stuff that’s been happening recently is triggering big time alarm bells – at this time I would trust the technicals, and distrust all fundamentals.

The current rumours in the market are – a) The Ambani brothers will reunite and b) RCOM may be close to a tower deal. I am Sintexofying those rumours also.

  • Praveen says:

    “RCOM may be close to a tower deal” – Hearing about this from one year 🙂

  • Soham Das says:

    I was horrified as well, after I checked a few days back the SAST announcements and Insider Trades, that I didnt see what I expected. And to think I was highly bullish on SINTEX at the price of 91.
    I think I will take a pass on this, purely because I am going to ignore a cheap co. with shady mgmt.
    Deepak, can we make a list/graph or something like that of people with shady integrity, then we can do our own investment process fairly robust. This bear phase has thrown up quite a few shady management our way- and the people involved in those companies can prove to be quite a “set” to exclude from our “list-of-allowable-management”

  • Sanjay says:

    Did the promoter sold the stock instead of buying?

  • Srinath says:

    These things have been going on for a long time but the market regulator keeps mum. Something needs to be done

  • Kshitij says:

    Gentlemen,
    Not only the promoters but several professional investors could also make the common investor wear a cap!
    Its a regular rumour that top notch IBs release a report and do the opposite!

  • kaushal says:

    Heard promotors bought some good quantity.