A brief update on some of our stocks discussed before:
Sree Rayalaseema Hi-Strength Hypo (BSE Code – 532842, NSE Code – SRHHYPOLTD): We had discussed about the company’s expansion plants earlier. In the September quarter, the company has reported a good growth of 27% in turnover and the stock looks quite cheap, if it is able to maintain this growth in up-coming quarters (which is should cause of the recent expansion).
The company is operating in a niche area of water treatment chemical – Calcium Hypochloride and it’s the only Indian company doing this work. The company has healthy operating margins of about 19-20% and the business requires little working capital. The valuations seem quite attractive as the stock is trading at a PE of just 3.5 times and the Price to Book Value of only 0.50. We feel it’s a value pick at these levels.
Negative – The promoters have been increasing stake by doing preferential allotment and merging of group companies.
Continue reading Sree Rayalaseema Hypo and other updates
We received an overwhelming positive response to our article on “How to find better investments using Accounting Ratios” and few of our readers asked to share few stocks which met those criteria. These are some interesting mid/small cap stock ideas, which have been doing well yet go un-noticed. They have good accounting ratios and seem to be trading at very compelling valuations.
1. Mazda Ltd (BSE Code – 523792): Mazda is an engineering company, specializing in steam jet vacuum systems and condensers and they find application in process and power industry. The interesting part is the balance sheet and the valuations at which the stock is trading. At CMP of 92, the company is available at a market capitalization of 40 Cr while it has cash of close to 15-20 Cr on Balance Sheet. Company is generating annual sales of 100 Cr & net profits of 10 Cr and is available at an Enterprise Value of just 20-25 Cr. Stock is trading at a PE of just 4 and Price to BV of just 0.60. Company has also started a new factory at the end of March, 12 and may help in growth.
A good detailed post was recently done by Dhwanil, do go through that for details.
2. Kakatiya Cement (BSE Code – 500234, NSE Code – KAKATCEM): KCL is a south based company having three divisions – Cement, Sugar & Power. Though first two segments are cyclical in nature but the interesting thing is that this company hasn’t been expanding, rather they have utilized the cash flows to repay the debts and become a debt free company.
Continue reading Stock ideas: Debt free companies