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On Slack: FIIs love Eicher, Cummins One-Timers, Goldman Gets it Right, IndiaBulls dividend…

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The Slack Discussions

The Slack group at Capital Mind Premium has been extremely active and if you haven’t been there, pop us a note by replying to this email. (If you’re a trial member this probably sound like Greek to you; it will be available when you sign up!)

Things out there are just going fantastic and we’ve only been trying to keep up! AP has had a fabulous week, with his trades netting a phenomenal return – so high, we’re scared to reveal percentages but let’s just say “very high”. 

Vashistha has been brilliant too and we’d like to thank him for all the links and insights. Also to awesome discussions on stocks and options by Japan, Sunil, Kunal, Rajesh, Dev, CoderZombie, Raj, Neerav, Anupam and so many of you that we honestly apologize for not having mentioned. 

A brief summary of some of the interesting things discussed there in the last few days:

Eicher Gets Lots of FII Love

Eicher Motors FII Holding currently is 27.5% (QoQ increase is 5.4%).

This was just quarter on quarter! Foreign Institutions must love the Enfield Bullet.

Eicher

NBFCs Go Big?

“The likes of Bajaj Finance join Reliance as a NBFC (Non-Banking Financial Companies) whose net worth size matched mid-sized state-run banks, like Oriental Bank of Commerce(OBC) and Andhra Bank.”

Further Reading: http://www.business-standard.com/article/companies/leading-nbfcs-are-bigger-than-many-psus-banks-115073101480_1.html

Goldman Gets it Right, Makes Up for a Past Sin

“Goldman Sachs predicts bottoming out of commodities: oil, gas, steel etc…over the next five years”

But of course they predicted oil would reach $200 when it hit $140 in 2008, and that’s -1, so we’re even.

More Reading: http://www.bloomberg.com/news/articles/2014-07-16/goldman-sees-lower-commodity-prices-over-five-years-on-supplies

Snowman Logistics: Results were ordinary

Supplemental Reading: http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/AF2F592D_7DB1_4C6C_A731_82C8280C3468_162230.pdf

“Motherson Sumi has broken 350”

Not a good day for the company that dropped 6% and looks rough on the chart.

MothSumi

 

“Sustainability of TataMotors?”

Tata Motors released results post market hours on Friday. (Note: Profits down 49% on what are lousy JLR sales in China) But that verdict seems to have been given by market a few months in advance:

TataMotors

 

HUL fut

Hindustan Unilever has been in this incredible range recently. And Friday was interesting, if you look at the tight Profile:

From Vashistha:

HUL

 

“TV Experts recommend straddle on Nifty”

Straddle trades are getting common enough for experts to give away for free. This probably is a good time to start thinking it might stop working. (See Tweet)

“Nasdaq: 200 points drop on the cards?”

Nasdaq

 

“FIIS and CLIs are always against each other”

Sam Seiden shares why most retail traders are trying to make money the wrong way and how you can trade like an institution: https://www.youtube.com/watch?v=ChQ0SUiPExI 

Business Standard says that EPFO will invest in ETFs

• Likely to invest in public sector ETFs, like those in Nifty Bees, PSU Bank Bees, CPSE ETF

• Select PSU stocks will likely go up, when the government starts buying

• Another thought: what if the government introduced a spanner by selling their stake into the ETF?

• 60% of CPSE in ONGC, GAIL and Coal India: these three will have support as EPFO keeps buying some every month

• SBI MF has launched a new ETF (SETFNIFTY) for EPFO: http://www.indiainfoline.com/article/news-top-story/nifty-based-new-etf-launched-at-nse-to-facilitate-epfo-investment-115080600673_1.html

• Not much activity into that ETF, though. 

The Lowdown on Cummins India Li
mited

• Appear to have “one-time gains” for the last few years: http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/2174A442_E8D6_4DC7_9187_77EDF3D39732_142932.pdf

• Their other income is 60cr this year, while it was 106cr last year. The other income is like 40% of the operating profit.

• The June 2014 quarter report says it includes one time profit on sale of investments at Rs.82.63 cr. Rs.82.63 cr was because they divested their stake in KPIT during this quarter.

• They have clarified later, apparently, that the gains have been due to the selling of bonds they hold, which is why one-time gains showed up big in their report. 

• Operating profits are up 25% or more which is good.

For those new to trading, here are some…

… basic tips:.   

Why is IndiaBulls at a 12% Yield?

It does pay out dividend every quarter. There’s no hard evidence of it being a chor company. But here’s a great chat between Anupam and Sunil:

• Valuations in most brokerages are being driver by range of activities but mostly related to financing. this in IB case is being captured by IBHSNG

• Pure Brokerage business without a great Institutional franchise, will not make money. Retail is loss leader

• With the [WSJ] case going on doubtful if someone will come forward to buy the company.

Stocks Updates:

• Igarashi Open Offer at 324.60

• Tata Global Q1 disappoints, net falls 15% to Rs 82.3cr

• EBITDA slipped 6.5 percent at Rs 188 crore in Q1 from Rs 201 crore while EBITDA margin was at 9.3 percent Versus 10.5 percent (Y-o-Y)

• Ambika results come out Saturday. Very disappointing; FLAT EPS and hardly any sign of the big textile boom

There’s more on IDFC and a few other things like changed Lot Sizes. Different posts on them!

We hope you liked this summary. We’ll post it every few days as we collect more interesting information!

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Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion. 

Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.

 

Next Gen Financial Analytics

 

  • piyush says:

    oh on Indiabulls ventures, dont buy if you are looking for capital gains… do buy if you are looking for fixed income returns.. if not at current levels,, slightly lower in late twenties maybe. I saw this one paying a regular 1 re dividend per quarter couple of years back and bought some at 11 and then again at 13… at 11 bucks that was a 36% annual yield. I was also not sure like what’s the scenario here etc so didn’t buy in large amount. Sad !
    Got 30-35% annual return from dividends, and then 2-3x capital gains as well. I think your argument is right that there is nothing in the brokerage business, but i think what they have done is slashed costs over 2011-13 to bare minimum.. so even with the low volumes that are happening now, they still make about 1 rs earnings per quarter, which they then pay out as dividends. so yeah you are right in the sense that the business is not going anywhere, its not growing, but even with the meagre volumes they can do 1 bucks EPS/qtr. At 11 it was a no brainer, at 33 not as great as there is risk of capital loss. Mid-20s risk is evenly spread out.