Trading and investment calls

ADSL as predicted making upmoves

2010-01-13T08:38:00.000-08:00

ADSL 6% up in 4 trading sessions
first target achieved: 254 reached 253.85 today.....
Expecting to breakout tomorrow. If not sell half at 252 and hold half

This month: 3 targets given and all achieved in just 6 trading sessions with more than 10% gain in just 1 week...

Further updates 17th oct calls...

2010-01-09T23:45:00.000-08:00

Patience pays ... NOv was dull but was compensated heavily in Dec.. Status of the calls

Havells: more than 30% up
2) Navbharat Ventures: Flat
3) Lakshmi Energy: more than 30% up
4) Heidelberg Cement: Flat
5) ADSL: Flat
6) Parekh Amulinax: more than 30% up
7) Sintex: flat
8) VST tillers: moe than 25% up.....

As I said in 15th Dec post...
Wait for the flat counters to ride next wave of magic.....:-)....
Bookk prfits in stocks which have appreciated by 25-30% and out of stocks which were flat from past 2 months current status now..

1) Havells: more than 65% up
2) Navbharat Ventures: 7.5% up
3) Lakshmi Energy: more than 30% up
4) Heidelberg Cement: 20% up
5) ADSL: Flat
6) Parekh Amulinax: more than 40% up
7) Sintex: 11% up
8) VST tillers: moe than 25% up...

Overall gain in 2 months : more than 25%.....

Stay invested in NB Ventures,Sintex, ADSL & Heidelberg accumulate more on every 10% decline..

Book profits in other counters

Target acheived for FINANCIAL TECHNOLOGY & HEIDELBERG

2010-01-06T08:58:00.001-08:00

Target achieved just in 2 days..
both 10% up 2 days in a flat market..
ADSL will rise to the occasion soon..:-)

HEIDELBERG update

2010-01-04T08:44:00.003-08:00

I recommended t accumulate HEIDELBERG cement at 41 . Those who accumulated can hold it now as it has formed a support at 45 now and expected to reach 48-50 soon.

ADSL & FINANCIAL TECHNOLOGY

2010-01-04T08:41:00.000-08:00

ADSL & FINANCIAL TECHNOLOGY recommended for 2 months perspective have started moving up. Technically, a triangular break put is expected in these 2 stocks in next 5-7 trading sessions if it does not fall from these levels. Volumes are very supportive. So, expecting a breakout in these 2 counters.

ADSL: next target 254 and 275
FINANCIAL TECHNOLOGY: 1427 & 1485

Status of stocks call given on Oct 17th

2009-12-15T14:26:00.000-08:00

Acrysil recommended by Dala street nov 15 edition

2009-12-15T14:23:00.000-08:00

ACRYSIL which has ben recommended by me 4 months back in my portfolio has been flashed in last month edition of dalal street... nice to see i have hit the jackpot before they recognized...:)

http://www.dsij.in/Onlineeditions/DSIJEnglish/archives/2009/Vol%2024,%20Issue_21/All%20Pages%20Issue/All%20pages%20Issue00010.html?zoomlevel=100

ANALYSIS OF SECTOR BUSINESS MODEL: TELECOM VAS

2009-12-10T23:34:00.000-08:00

Introduction of the Sector:

Mobile VAS: Mobile value-added services (MVAS) are the ability for cellular operators and service providers to charge a premium price for the services (beyond voice conversation) they offer to their subscribers (mobile users). Some of the services include: SMS (text messages), MMS (multimedia messages), USSD (interactive menu based services) ,CRBT (caller ring back tone), video streaming , mobile advertisements, participation in polls and contests, location based services, mCommerce (financial transactions), Instant messaging, Infotainment services (news, weather reports, songs, recipes ), content downloads (wallpapers, screen savers, games, ring tones), down loadable mobile applications.

Based on the need fulfillment of the end user, MVAS can be put into three broad categories:

1) Entertainment VAS – E.g. – Jokes, Ringtones, Caller Ring Back Tones (CRBT), Mobile Radio. This drives the VAS market in terms of volume as well as revenue. This is expected to grow at a CAGR of 35%

2) Information VAS – E.g. – Movie reviews, News, Astrology, Stock updates. This is gradually getting popular depending on relevance. This is expected to grow at a rate of 18-20% over next 5 years.

3) MCommerce VAS (Transactional services) – E.g. - Mobile Banking, Mobile payments. This is currently in the embryonic stage.

Entities in VAS Value chain: The various entities involved in MVAS can be listed as:

1) Content/Application Owner – Companies like saregama/mauj/Rajshri who develop copyrighted content.

2) Aggregator – They aggregate content like games/wallpapers/ringtones and distributes it to suit customer needs .Different players are : mauj, hungama mobile, indiatimes mobile etc.

3) Software developer – They develop applications like payment/games/middleware etc. for mobile VAS .The players are - mchek/July systems/webaroo/affle etc.

4) Technology Enabler – provides the platform that plugs into telco networks and acts like a bridge between aggregator and telcos .The players include OnMobile, cellnext. mauj etc.

Operators still dominate the revenue sharing arrangement in VAS .Out of the total amount paid by end users, 60-70% is kept by operator, aggregator gets 20-25% and content app/owner gets 10-15% of the revenue.

Further, telecom sector is a non-cyclic sector. This sector is not heavily dependent on macroeconomic scenario. The ongoing recession has been a perfect example where the profits of the industry were not hit due to macroeconomic changes.

Quantitative as well as qualitative factors about the sector:

Quantitative:

1. Decreasing ARPU- a warning signal for telecom industry:

Even though the number of mobile subscribers has increased over the past 5 years and is expected to grow further, decrease in average revenue per user (ARPU) continuously over past 3 years is a sign for telecom industry to look for alternative modes of profit generation for sustainable growth of the industry.

The ARPU is generated as a combination of voice based revenue and non-voice based revenues which are also known as value added services (VAS).

Nature of mobile service	Contribution towards ARPU
Voice based services	87%
Non voice/Value added services	13%

Source: TRAI (Telecom Regulatory Authority of India)

The reason behind this fall in ARPU is the regular fall in voice based call rates due to extremely price sensitive competitive market. As voice based revenue contributes 87% towards ARPU, a small fall in voice based call rates hits ARPU badly. The situation is expected to continue in future and in fact, expected to get worse as many new players like unitech, Videocon etc have acquired telecom license in various regions. This creates a need for either a product enhancement as a means of organic growth or an inorganic expansion in the overseas market in order to have a sustainable product life cycle to regain the growth phase.

The telecom operators have found the answer for this issue in the form of non-voice/value added services which contributes to only 10% of revenues at present from 5% of total value 3 years back. There is a huge scope of opportunity still left to be tapped in order to create VAS as the next growth driver for telecom industry.

. Expected launch of 3G services in India by year end:

Results from nations having 3G services show significant increase in revenues in VAS after launch of 3G services. Below is data of Vodafone US which has shown significant increase in revenue after launch of 3 G. We expect a similar trend to continue in India after introduction of

3G technology.

Source: BDA Research

Further, after the long going tussle between telecom and defense, government has come forward and declared date for 3G auction. Government sets Jan 14 ,2010 as date for 3G spectrum auction .This will create another growth revolution in MVAS sector.

3. Emerging revenue opportunities due to bandwidth expansion:
Due to bandwidth expansion, GPRS, Internet and online gaming facilities will pick up which will enhance horizontal penetration of VAS services. The below data justifies this fact.

4. Niche and fast growing sector:
VAS is a relatively niche and fast moving sector which is still in the growth stage of product life cycle leaving ample scope of growth. In coming 5 years due to lot of horizontal and vertical growth opportunities, the penetration is expected to grow by 22% CAGR and sector is expected to grow at a rate of 30% CAGR according to TRAI.

Qualitative Parameters:

1)    Resolving conflict between telecom & defense ministry over 3G bandwidth allocations: As per government, the conflict between telecom and defence will be resolved and 3G will be auctioned by the end of this year, it is a very positive sign for things in future.

2)    Better technology at affordable prices: Further, the mobile technology has improved and expected to improve further with respect to price leading to provide better technology as reasonable price.

3)    Entry of high end mobile handsets: The entry of high end mobiles sets has lead to increase in technology based VAS services like gaming and with increasing income power of consumers, this trend will continue.

4)    Mobile as next medium of advertising: Mobile is projected as next biggest medium of advertising leading to higher revenues for VAS companies.

Key growth and value drivers in this sector and how they will change:

Increasing subscriber base:
In past 5 years, total number of mobile subscribers has grown with a CAGR of 24% and the growth is still intact. As per TRAI, in next 5 years, it is expected to grow at 30% Which will add lot of revenues for value added services.

Decreasing ARPU:
As average revenue per user is on subsequent decline due to heavy competition in voice call rates, mobile users have started looking at value added services in order to increase ARPU by providing additional features.

Implementation of 3G and technological advancement (Low cost better technology handset, broadband and bandwidth)
With the advancement of 3G, wider bandwidth and technologically better handsets are available at affordable prices. The penetration of value added services will increase both horizontally and vertically. By horizontally, we mean to say range of services like online gaming, chatting which requires higher bandwidth and broadband networks. By vertically, we mean that due to affordable handsets equipped with better technology at affordable prices, even customers at the bottom of the pyramid will be able to use value added services.

Rural VAS a big opportunity:
VAS has not been able to penetrate rural market due to lower spending potential and lack of technological literacy among rural consumers. But technological innovations like integrated voice response(IVR) and local language support have given a major boost to rural VAS and this is expected to grow in future generating lots of revenues as it is a mass market.
Technological awareness and increasing penetration of education:
In current Indian scenario, most of the people in the aging generation are not able to use various features of mobile because of lack of technological awareness and generation lag. As the generation will progress, the existing and coming generations will be more equipped of using various available mobile features like gaming, browsing etc.

Innovation in VAS content and product innovation: VAS is relatively a very new concept which has still not picked its momentum except ringtones & sms as lot of other VAS services require higher bandwidth and higher technological features.

Advertisements (New growth driver): As 21^st generation consumer has become highly mobile, the means of advertisement has changed and marketers are looking for every possible means to create new touch points as the old touch points are losing its connect due to mobility of users. Out of home media is one such effort. Mobiles are being projected as the next big source of advertising which will carry momentum once 3G services are launched. This can be substantiated by the amount of spending companies have done on mobile advertising.

Growing global VAS market:
In developed countries like Europe and North America, subscriber growth has slowed down dramatically and mobile penetration in some countries has exceeded 100% of the population. In these conditions where airtime prices are under severe pressure and subscriber retention is critical, data and Value Added Services are the primary tools for the Operator to differentiate their service offering. App Stores that enable consumers to directly download mobile applications opens a new market opportunity. Indian VAS players like Onmobile, Geodesic are expanding in these markets by finalizing many international deals.
For example, last fiscal year, Onmobile fixed two major deals, one with telefornica and other with Vodafone. This will add to international penetration of Indian VAS players.

Key cost elements and how they will change:

Taking into consideration the wide range of various value added services being offered, the costing of VAS depends highly on the nature of value added service being offered. Value added services can be broken into two groups:
1.    Content based value added services (80%)
2.    Non-content based value added services (20%)
a. Product based value added services (20%)
b. Advertising based value added services(in pipeline)

In order to understand the cost structure of value added services, it is very important to understand the supply chain and the stakeholders involved in providing VAS.

Content based value added services: These are services for which the content is derived from a parent company by the aggregator. For example, if the aggregator provides ringtone of a specific music to the end customer, the company holding the music rights provides the original content. The role of an aggregator is redesigning the original content in a form which is adaptable to mobile subscribers and provides necessary software and interface to the mobile subscriber through the mobile network operator in order to make the subscriber use the facility. Currently, this sector contributes to 80% of the revenues of aggregators.

Non-content based value added services: In this case, the aggregator does not derive content from any other source but develops his own product which can be offered to the mobile subscriber as a product. For example: Phone backup management software, Mobile radio based software etc. The current contribution is 20% and is on the rise.

In order to beat the index by investing in VAS based business provided by aggregator to telecom based network operator, one needs to understand the cost structure of whole supply chain and analyze investing in companies at which level of this supply chain will help us to beat the sensex index. So, in order to extract maximum growth from VAS sector, an investor can either choose to invest in a network operator like Bharti Airtel, Idea, Reliance communication or it can go at the second level of supply chain and invest in aggregator based value added service providers like Onmobile Global services, Geodesic etc. So, even though we realize, the growth of this sector will beat the growth rate of sensex, from an investors point of view, we need to understand in terms of profitability, which of these two VAS participants will generate maximum profits for an investor beating the index. So, let us understand the cost pattern for these two sector participants.

Analyzing the current % share of various value added service being offered, we find the following distribution:

Cost elements:
The various additional cost elements involved at network operator level are as follows:
1)    Spectrum/3g cost
2)    GPRS Adoption cost
3)    Infrastructure issues
As network operator level will be a highly capital intensive business in order to reap benefits of MVAS, it will be more logical to look for less capital intensive/high gain players which can reap the growth of MVAS.
This brings our focus on VAS aggregator/Software developer/Technological enabler. The various cost structure involved at VAS aggregator/Software developer/Technological enabler   level:
1)    Content cost (24%)
2)    Technological cost: Hardware & software (10%)
3)    Manpower cost (38%)
4)    Administration, Marketing, R&D and other costs (28%)

As we can see VAS aggregator business is a less capital intensive business where cost incurred in infrastructure & technological setup is far lesser than telecom operators and so, higher profit can be expected with minimum possible breakeven period for the companies operating at this level. Now, let’s analyze the probabilistic future changes in respective cost elements:
1. Content cost: The content cost is the cost which is paid to the content providers. For example, if we consider Ringtones of music as a value added service, cost paid to the company who holds the music rights will be the content cost. In case of gaming, this is valid only for content based VAS. As this is a means of secondary revenue for the supplier i.e. content provider and the market has a large number of content providers with lot of options to choose for very few VAS aggregators, in future too, aggregators will have an upper hand in costing of content. Further, aggregators have ample scope to diversify their revenue base in the form of non-content based VAS and mobile advertising based VAS which is slowly reducing its over dependence on content providers. This means that in future the content cost will be supportive to aggregator’s profit margins.

2. Technological cost: As it contributes to approximately only 10% of total operational cost and technology becomes cheaper day by day, in future also, this cost will be lower in terms of its total share in operational cost in future comparing to current levels.

3. Manpower cost: This is the most significant cost which is spent on the salaries of employees developing the required network, interface, product and software. This cost will increase in line with revenues and will be similar to IT sector manpower cost structure growth but since this sector can grow with a rate of more than 40% for next 5-6 years, the impact of this cost on the revenues and profitability will be much higher than IT sector which already in the matured phase of product life cycle.

4. Administration, Marketing, R&D and other costs: This cost involves the money spent on administration, marketing, R&D, travelling, market research. So, this cost is expected to grow in a stable manner as the business progresses and there is a scope of achieving cost operational efficiency and depends a lot on how the company manages this cost internally.

So, from operational cost point of view, this is an excellent business model in terms of profitability for next 5 years without any major risks leading to any unexpected rise in input cost structure.

Converting to numbers & Growth Projections for the sector:

The Department of Telecom (DoT) has following projections:
1)    A billion mobile phones by 2014.
2)    India’s population is expected to be 1.26 billion in the same year, and with mobile penetration at 1.01 billion, the mobile teledensity would be upwards of 80%.
3)    This probably reflects the world’s largest new growth opportunity over the next five years, surpassing even China’s potential.
4)    The above scenario is expected to provide a major boost to the MVAS market. Increase in user base, price decline in MVAS services, new technology adoption (like 3G, NGN) by operators and the entry of Mobile Virtual Network Operators (MVNOs) are the some of the factors that will propel the MVAS market to grow to Rs. 16520 crores by June 2010. This projection can be substantiated by the growth rate of MVAS industry for the past 3 years.

Parameters

2007

2008

2009

No. of Mobile subscriber(mn)

166

250

430

ARPU(Rs)

295

250

205

VAS contribution to ARPU

7%

10%

13%

Total Telecom revenue(Crore)

58764

75000

105780

Total VAS revenue(Crore)

4113.48

7500

13751.4

VAS Growth rate%

82.32737

83.352

Entertainment VAS is expected to remain the VAS driver for the next few years taking over all growth rate to 30% for next 5 years according to TRAI report.Currently, MVAS contributes over 13% of the total revenue of mobile telecom service providers. As per TRAI report, this is expected to rise to over 30% in the next 5-7 years.

Based on the need fulfillment of the end user, MVAS can be put into three broad categories:
1)    Entertainment VAS – E.g. – Jokes, Ringtones, Caller Ring Back Tones (CRBT), Mobile Radio. This drives the VAS market in terms of volume as well as revenue. This is expected to grow at a CAGR of 35%
2)    Information VAS – E.g. – Movie reviews, News, Astrology, Stock updates. This is gradually getting popular depending on relevance. This is expected to grow at a rate of 18-20% over next 5 years.
3)    MCommerce VAS (Transactional services) – E.g. - Mobile Banking, Mobile payments. This is currently in the embryonic stage.

VAS Revenues by Category

Category

% of total VAS
In 2008

% of total VAS
In 2009

P2P SMS

35%

30%

CRBT & Ringtones

35%

35%

IVR / Voice Portal

15%

12%

A2P SMS

15%

13%

Data & Email

              5%

Games

5%

Points to note:
§ SMS & CRBT are still the major growth drivers and will continue to grow with 20%.
§ Data and Email has emerged as next driver for growth contributing to 10% of total VAS revenue without 3G contribution.
§ Games, data and email are growing with a rate higher than 60% and will continue to do so with penetration of 3 G and better technology.

Risks Associated:
·         The limited operating history of VAS firms may make it difficult for prospective investors to evaluate their business:
The telecommunications value added services market is nascent and is rapidly evolving. As a result, any evaluation of their business and   prospects must be considered in light of the industry, limited operating history and the risks and uncertainties often encountered by companies

·         The VAS firms offer white label applications and services to their customers who then market the applications and services to their end-user subscribers, but none of customer contracts obligate the customers to market or promote the services to their end-user subscribers:

In addition, as most of VAS firms customer contracts are non-exclusive; their customers may purchase similar application services from third parties and cease to use the applications and services in the future. Even if the customers retained the services, their customer contracts do not prevent the customers from significantly reducing the level of marketing or promotion of the applications or from electing to market or promote similar applications purchased from and provided by the competitors. Any of the foregoing may result in the loss of future revenue from their carrier application services.

·         Increasingly, the research shows that a substantial number of the new subscribers of carrier customers are from non-metro areas and they tend to have lower levels of average revenue per user:

The customers of the cellular services have declining average revenue per user these days because it is influenced by the demographic make-up of their subscriber base. With the expanding penetration of wireless telecommunications in India, increasingly, based on internal estimates, a substantial number of the new subscribers of the carrier customers are from non-metro areas. These subscribers generally spend less on telecommunications solutions and applications than subscribers from metro areas, which results in lower average revenues for the carrier customers. As most of the contracts with carrier customers are on a revenue sharing basis, this may in turn have a material adverse affect on results of operations of the VAS firms.

More than 90% of revenue for VAS firms is subject to the end-user pricing decisions of cellular operators and reconciliation of billing information:

The VAS firms have no control over their pricing decisions and most of the customer contracts do not provide for guaranteed minimum revenue payments even though some of the contracts have a minimum price clause. As a result, revenue derived from the revenue sharing agreements may be substantially reduced depending on the pricing decisions and pressures of cellular operators which may materially and adversely affect results of operations.

·         Excessive dependence on music related services, including the ringback tones, ringtone downloads and music messaging applications, for approximately 67% of our revenue:

Even though the industry is trying to reduce its overdependence on musical contents, still, it contributes to a significant level and needs to be reduced further. In future, licensing of 3 G services will help a lot in to mitigate this risk by easing technological barriers for other value added services like gaming, GPRS.

·         Delay in licensing of 3 G due to political reasons:

Licensing of 3G services has been pending from a long time due to ongoing tussle between telecom ministry and defense ministry. But current statement from government regarding auction of 3G services on 14^th January 2010 has given ample hopes for the future. Even though, further delay in 3G licensing wont hinder the current projected growth of value added services, of course, it will ct as a hindrance for lot of value added services which are not possible right now and can be possible leading to a completely different growth trajectory once they are launched.

SENSEX Vs VAS Industry Valuations:
Conservative view:
If we see 10 year data between 1995-2004, we will realize that in the long run (defined by a period of 10 years), the market has corrected itself and the BSE sensex has grown in accordance with the real GDP growth rate.

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

CAGR**

Macro indicators

Nominal GDP
growth

17.4%

17.0%

15.9%

11.8%

15.0%

10.2%

8.0%

9.9%

7.8%

11.7%

11.9%

Real GDP
growth

7.3%

7.3%

7.8%

4.8%

6.5%

6.1%

4.4%

5.8%

4.0%

8.5%

6.1%

Quantum
sales growth

29.6%

23.3%

19.0%

(4.3%)

14.2%

23.4%

23.5%

0.7%

11.9%

11.4%

11.9%

Stock market

BSE Sensex*

(13.7%)

3.3%

(0.2%)

15.8%

(3.9%)

33.7%

(27.9%)

(3.7%)

(12.1%)

83.4%

6.2%

BSE-100

(12.2%)

(3.5%)

(5.5%)

15.9%

(2.7%)

75.8%

(41.7%)

1.4%

(12.5%)

97.6%

7.1%

BSE-200

NA

(6.3%)

(4.9%)

14.9%

0.8%

63.9%

(41.1%)

7.4%

(8.9%)

104.3%

8.0%

Source: RBI and Equitymaster database.

Assuming the similar trend to be valid for next 10 years and assuming the economy to grow at a rate of 6% for next 5 years on conservative basis as per RBI guidelines

FY 05

FY 06

FY 07

FY 08

FY 09

FY 10

FY 11

FY 12

FY 13

FY 14

CAGR

BSE Sensex

7096

7808

8534

9173

9718

10302

10920

11575

12269

13006

Real GDP
growth rate

9.18

10.03

9.30

7.48

5.95

6.00

6.00

6.00

6.00

6.00

7.20

We expect sensex to hover around 13006 but as market moves on future optimism and pessimism, the future values can have huge variations. So, considering the extreme positive optimistic deviations from past, taking a scenario when at height of optimism in Jan 2008
Jan 2008: BSE Sensex : approx 2100 i.e. 2.5 times of projected value based on GDP. So, considering same extreme optimism, the markets can go up to 13006*2.5= 32500 on the upper limit.
So, on conservative basis:
Considering present value of sensex at Oct 27, 2009 = 16353
Return from Sensex from current levels in next 5 years considering sensex at 13006 = -3.8% on CAGR basis
Optimistic basis:
Considering present value of sensex at Oct 27, 2009 = 16353
Return from Sensex from current levels in next 5 years considering sensex at 32500 = 15% on CAGR basis.

Since, our projected rate of growth for this sector is more than 15% on normal basis without any high optimism, we expect the companies involved in VAS based telecom sector to beat the index by a decent margin.

SUMMARY:
Geographical coverage of mobile telephony has gone up from 13%, a couple of years ago to 39% now. Despite the economic slowdown, the telecom industry continues on a dynamic growth path. As the new subscriptions will largely happen at the bottom of the pyramid, they will lead to a reduction in the Average Revenue per User (ARPU). Further, most of the subscribers added are from the bottom of the pyramid having low usage resulting in low ARPU. With new licenses being offered, the number of Operators in the already crowded market is set to go up, which will bring with it further price cuts in airtime and for basic messaging. In this scenario, Mobile Value Added Services (MVAS) is a potential long term-revenue stream. Not only does it lead to an increase in the ARPU, it also acts as a differentiator between operators. Besides, consumers today seek more from their communication devices than just mobility and connectivity and MVAS serves this very need.
So, in short the reasons for MVAS outperforming sensex can be attributed to:
1)    Recession free growth
2)    Projected growth in subscriber base
3)    Ample opportunity in information VAS & m-commerce VAS still to be tapped
4)    Healthy growing entertainment VAS
5)    Rise of Indian VAS players like Onmobile services, Geodesic etc as global MVAS players adding overseas growth revenues.
6)    Business in nascent stage , so, huge innovative and growth opportunities left
7)    Mobile as next medium of advertising provide next scope of growth for MVAS
8)    Low capital high return business model

Disclaimer: This report was prepared by me along with my friend Jaybind kumar jha. The data has been collected from TRAI and BDA research reports. Special thanks to prof. Som sekhar for providing clarity over the subject.

Current status of my portfolio:

2009-10-22T13:19:00.000-07:00

This is the current status of my portfolio which I started 2 months back.I will be posting an update on each and every company once all quarter results are declared.
Out of trading calls given for this months,
Havells
Federal bank
Voltamp
Navneet
ADSL
zoomed 4-10%..
I would still recommend accululating ADSL, Financial technology, LAKSHMI ENERGY and onmobile.

Stocks to show Good returns from current levels in next 2 months

2009-10-17T14:09:00.000-07:00

1) Havells
2) Navbharat Ventures
3) Lakshmi Energy
4) Heidelberg Cement
5) ADSL
6) Parekh Amulinax
7) Sintex
8) VST tillers

Where my money is stuck?

2009-10-08T08:41:00.000-07:00

Let me put a list of stocks where my money is stuck

1) ONMOBILE
2)NAVBHARAT VENTURES

1) ONMOBILE: Bought 6 stocks @ 650..As the stock appreciated from 400 to 680, there was correction.My view was fundamental.The stock fell because of slightly poor quarter results. When this stock reached 490 and showed strength at support i bought more..Currently i have averaged it out to 524 Rs but, last week fall was one which i never thought. It broke 490 support level and looked for immediate next support of 460. I am not going to add further to average out further. The quarter results are near. A good show will drive it up but again a bad result will take it to 400 where again it can test 400 support level. As i believe in its business model, I am not going to sell even with bad quarter results but this time, i will dig deep to find why poor results..Lets wait and watch.
I discussed with my friend as a reason for this fall. The projected reasons were bad sentiments about telecom companies due to new pricing but i feel other way. I feel its a boon for onmobile, as telecom companies will look for increasing revenues through non-voice services when voice charges are going down and there , onmobile will get an advantage.. lets see..

Navbharat ventures: averaged out and holding at 390 right now. I am sure within 30 trading sessions there will be a breakout which will take it to 450 levels again. So, I am resting in piece for this stocks. None of my other investments are in loss as per my portfolio.

Results of trade done between 07-10-2009 and -08-10-2009

2009-10-08T08:31:00.000-07:00

sold Hiedelberg @ 44.6 ie. 5% profit in a day.. renetered at 42.6 again
accumulated more patelairtemp @ 58..avg . purchase price for 2 days 58.3
Purchased :
Navneet @ 38
Federal Bank @ 232
lakshmi@ 123

Sold lakshmi energy @ 127...3% profit in a day
Heidelberg sold @ 44...3.5% intraday profit again
Federal bank.. still holding
Nvaneet.. still holding
Patel Airtemp.. still holding
Financial Technology ..It maintained its support of 1283 and today went till 1350.. Hope this new trend continues .. holding after averaging out @ 1311

Breakout this month: ADSL, Lakshmi energy, voltamp

2009-10-07T14:02:00.000-07:00

Stocks in which I am expecting a breakout by this month end.
1) ADSL: from 492 levels
2)Lakshmi energy: from 138
3) Voltamp: very soon

A breakout is awaited in this counter from a long time which looks very likely seeing the charts.
1) Volumes building up after a long time in perfect way.
2) CCI has turned positive from past 3 days.
3) Seeing the price chart, the stock has touched the lower lows of uptrend line, so, from here it should make highs which it is doing from past 2 days and now a breakout should follow soon.

I think a good quarter result report will mark fundamental breakout as seeing the fundamentals of the stock and its past history, the stock is still available at cheap valuations seeing other stocks in the market.

Trading for the day

2009-10-07T03:19:00.000-07:00

Book profit in Havells

2009-10-06T23:53:00.001-07:00

Booked profit in havells at 321..
Gain in 1 day: 7%

Shares purchased for trading

2009-10-06T14:39:00.000-07:00

Accumulated following shares from 1 month trading point of view:

1) Patel Airtemp: Rs 58.6
2) Heidelberg Cement: Rs 42.6
3) Havells: Rs 301

Accumulate on dips medium to long term, short term tarders avoid

2009-10-05T04:29:00.000-07:00

Accumulate ADSL, ONMOBILE, FINANCIAL TECHNOLOGY,HIEDELBERG CEMENT on dips:

ADSL: Accumulate around 460
ONMOBILE: short term traders (3-4 days...it has turned risky now..can go down further till 460 in short term)..medium to long term view, accumulate more at 485+ levels

FINANCIAL TECHNOLOGY: It hit 3 months low of 1283 and bounced back to 1311. Accumulate at these levels

HIEDELBERG CEMENT: Accumulate near Rs 43

As NIFTY has turned bearish in short term, traders need to be cautious.Lot depends on the quarter results. Friday, INFOSYS is going to declare quarter results. It will set the mood of markets depending on how it has performed.

Add ONMOBILE at current levels of 490s for Short term trading

2009-10-02T13:16:00.001-07:00

Stoploss: 485
First target: 520
Second Target: 545

My 2nd Quarter performance in trading

2009-09-30T17:38:00.000-07:00

Started this Blog from July,2009. Performance of my monthly trading calls so far:

July: 7% Profit
August: 60% Profit
Sept: 10% Profit

So, keeping a base of Rs 100,
July 1: Rs 100
Sept 30: Rs 188.3

So, quarterly return on Trading: 88.3%

For details, check the previous posts......

ADSL: Predicted a rise on 19th Sept

2009-09-30T17:31:00.000-07:00

As I mentioned on Blog on 19th Sept, based on technicals, a rise in ADSL from 22nd Sept, 1 week late but it happned. A jump from 450 levels on Monday to 480 levels today 7% gain. More to come.

Why I bought Financial Technology

2009-09-30T17:14:00.000-07:00

These are the opportunities to look for. A pullback from a very strong support region of 1300 with extremely good volumes.Collected at 1330,1340,1380 levels averaging out at 1352. Will hold for a month. I never check stoploss as my trading is also based on fundamentally selected companies.
So, for both trades ADSL & Financial technologies, will follow remaning two stoplosses which are fundamental stoploss. For reading my concept of "Stoploss" , Please read my previous blog " the operation management of trading and investment".

Why I bought ADSL again

2009-09-30T16:57:00.000-07:00

I am invested in this stock from 310 levels. This stock made a high of 560 and then corrected to 500. Showed some support but again fell and showed tremendous support at 440 which used to be a strong resistance few months back. A strong support and from there upward movement supported by increasing volumes shows a clear uptrend in future. NIFTY is already very high but then, last time this stock went 20% up when NIFTY was 100 points down.Moreover, when whole last month NIFTY crosses one limits after another, this stock was in pure correction phase.So, since, there has been no change in fundamentals, no bad news for this stock, I expect it to touch 500 soon and once it crosses 500, The next level will be 560 within 20-25 trading sessions.

My current Portfolio as on Oct 01,2009

2009-09-30T16:43:00.000-07:00

Here is the status of my portfolio which I started building up 1 month back and shared here

Profit Booked in
   1) Viceroy Hotels: Rs 2510
   2) Navneet Publication: Rs 95
New Additions
   1) Federal Bank (Undervalued as compared to peers)
   2) Financial Technology ( Big correction, was waiting to enter from a long time, Picked up at major support level of 1310-1350 range)
   3) Heidelberg Cement ( Recommended by Dalal Street, Found worth investing)

Accumulated:

   1) ADSL: After making a high of 560, corrected and showed lot of support at 440, started collecting at 448 levels
Those who want to Book Profit can book 50% Profit tomorrow in:
1) Natco Pharma:
   2) Denso India:
   3) Lakshmi Energy:
   4) Rallis:
   5) Omnitech:
   6) Parekh Aluminax:

Further purchasing can be done in ADSL, Onmobile, Navbharat Ventures & Patel airtemp at current levels.

My funda of Value investment

2009-09-30T13:31:00.000-07:00

I try to look over the following points while analyzing a stock from long term perspective.

1) Analysis 1: Management Analysis

2) Analysis 2: Sector Analysis

3) Analysis 3: Business Model analysis

4) Analysis 4: Financial Analysis

1) Management Analysis: This must go through a "Pass" status else other 3 analysis does not matter.

a) Reputation

b) Educational & Professional Background

c) Linked in profiles(If any)

d) Company's image among its consumers & supply chain members

e) Senior Management's Salary/Net Profit

2) Sector Analysis:

a) High Growth/Growth/Saturated sector?

b) If saturated, then, I check if company's business model is a differentiating one?

c) Is the sector highly regulated?

d) Total market size of sector? Expected future market size?

e) Company market size/Total Market size?( Acceptable limit will differ sector to sector based on competition and number of players)

f) PEST Analysis ( If something is really threatening)

3) Business Model Analysis:

Does the company do things in a different or innovative way? If the answer is a big "Yes" and Analysis 1 has a "Pass" status,even if, Analysis 3 & 4 are not encouraging, I may take risk based on my conviction in the future of business/business model the company is in. This is pure judgmental decision based on qualitative arguments and conviction part from analyzing through few strategic models.

4) Financial Analysis: What I look for over 5 Years data(Vital Parameters differ based on sector):

1) Nature of Business (Cyclic/Non-cyclic)?

2) ROE/ROC/ROA

3) Net Profit increase %

4) Net Sales increase %

5) Operating Margin

6) Current P/E

7) EPS Growth rate & PEG

8) Debt/Equity ration<.25

9) Free cash flow

10) Market Capitalization/Sales ratio

11) P/Book Value

12) Number of employees added( I consider it a very important parameter for growth companies in service sector)

13) Dividend History

14) Ratio Analysis(This will differ sector to sector)

15) P/E band & range in past 5 years

Some Important facts which prove very handly:

1) Promoters stake change (increase/decrease)

2) Mutual Fund's interest in stock(History o mutual fund & Fund manager)

3) Warrants, ESOPS issued by company

4) Equity dilution history

5) Buyback, Bonus history

A final decision is based on the overall outcome of all these points and relative strength and priority of each point.

Books on Value investment

2009-09-30T13:24:00.000-07:00

A must read list of books on value investment:

1. The Intelligent Investor by Benjamin Graham (known as father of vlaue Investing)

2. Stocks for the Long Run by Jeremy Seigel

3. One up on the Wall Street by Peter Lynch

4. Beating the Street by Peter Lynch

5. The Intelligent Asset Allocator - William J Bernstein

6. A Random Walk Down Wall Street, by Burton G. Malkiel

7. Security Analysis by Benjamin Graham

8. Common Sense on Mutual Funds by John Bogle

Call for Oct, 2009

2009-09-30T13:07:00.000-07:00

Call for Sept ends with Parekh Alumnax giving 10% max returns from the level call given@Rs 110 to a high of 121...

Those who accumulated more ADSL@ 440-450 already in 6% gain..

Call for OCT

ADSL at current level of 478

Financial Technology current level of 1382

Be cautious while trading in this month,Always have 30% of money in cash for mitigating effect of correction.

The operations management of Trading & Investments

2009-09-28T02:45:00.000-07:00

I always wanted to write about why I picked up my blog’s name as “tradingandinvestingcalls”. So, today, I am going ahead with what I wanted to do from a long time. There is always debate between technical analysts and fundamental analysts and most of the time they love to hate each other. Its my personal experience which I see respective forums, industry and while interacting with people of these two communities. But as I learned, my belief became stringer and now its my conviction that if we bring best out of these two field of study and use both of them in sync with each other, life cannot be much better. Well, one reason behind this rational is my own emotional psychology also which matters a lot in share market. I am not a person who I so strong on long term convictions that even despite of good fundamental analysis and projections, if the stock does not move for months , I can stay invested. At the same time, I have made mistakes of following stoplosses because of various reasons

a) Lack of emotional control

b) Market did not allow

c) Those 2 days, I was too busy with my core job and by the time I saw, I lost the time to exit

d) Every analyst on TV channels was gaga over this stock, so, I hold in loss and made more losses.

So, after trying various models and system, finally I came up with a system which suits my IQ,EQ and which utilizes my knowledge of both technical and fundamentals ( as the purpose of learning was to utilize each, each having its own set of advantages). It has worked for me from a long time. This system becomes more important when you don’t have regular source of income to add to your portfolio and you expect continuous profit generation from an existing money in your portfolio( For example, for a student like me who will not be earning for next 2 years after saving some money in previous job).

So, here it is:

I always love to bring two different field of studies to a commonality. I believe, this concept of integrating & cross-utilization of knowledge of one sector/subject across other other make Biggies in the world. Be it Tatas, Ambanis who entered almost into ever business. Be it the mechanical engineer who made the concept of artificial heart pumping on the concept of engines( I saw this on discovery). Ok, lets not dig much into it and jump to lets discuss

The operations management of trading & investing

These are findings and lessons from what I have experienced in past 2-3 years of trading. It is based on my own behaviors, psychology and emotional quotient which will differ from person to person despite of acquiring similar kind of technical analysis knowledge.

OPERATIONS MANAGEMENT: I call it a profitable conversion of inputs into output through various processes.

Input --------> Processes ---------> Output

Objective of article: To develop a money management system for doing short term trading as well as long term investment, which can overcome problems pertaining to blocking of money, opportunity loss and costly mistakes

Opportunity loss: you find an opportunity which is more attractive than all previous one but your cash is stuck

Costly mistake: You take 10 right decisions and then one wrong decision and you are stuck. We are humans. So, at some point, surely, we will do mistake. So, the emphasis is how to minimize the after effects of mistakes.

Assumption:

1) The person has basic knowledge of both technical analysis and fundamental analysis.

2) This is valid only for long calls

3) This is valid only for uptrend and range bound markets which we define based on time frame based on nations economic signals. As I believe, India has to go a long way. In next 10 year time frame, I find this point valid even though there might be troughs like we had last year.

Solution:

Inputs:

I divide it into 2 categories

a) External Inputs:

a. Technical knowledge in the form of books, Websites, forums

b. Latest news about stocks and companies we are in

b) Internal Inputs:

a. Our Intelligent quotient,

b. Our Emotional Quotient,

c. Behavior & trading psychology

How these two inputs are important?

External Input: Its acquisition of external input which matters.

Internal Input: Its identification of internal input which matters. If your internal

input is harming the quality of output(profits), it has to be followed by a process of rectification.

And then, it is all about implementation of the acquired one & identified one in a symbiotic way.

Word of caution: External acquisition is easy, what proved more difficult in my case was internal identification and even more difficult was rectification phase as I had to work very hard to control my emotions.

PROCESS:

Here, I divide in two parts.

1) Process steps which we should follow

2) Things we should avoid

Process steps which we should follow:

1) Make a note of your current cash, how much more cash you can put on a regular basis.

2) Selection of stocks: Select a list of 20-30 stocks in your watch list. This is how the current portfolio which I am sharing with you in my previous blogs has been built.

Criteria for Selection:

i) Stocks which are fundamentally sound and you can believe in its fundamentals and according to you are undervalued or you see a future value in these stocks.( For fundamental profit booking)

ii) Stocks having good volumes in trading.( For technical profit booking)

Now this is important since our time frame is only 7 days on the max. For example, CRISIL & VST TILLERS have been good fundamental stocks but most of the time, negligible volumes (they pick up in a 10-15 days period when the volume increases and then again it remains low for a long time).So, I might have this share called CRISIL in my kitty from fundamental point of view, I will make it sure I never play with this one in a short time frame of 1 day or 1 week. There is a separate strategy to play such stocks completely based on major support & resistance in order to extract maximum profit based on fundamentals.

iii) Make sure all these stocks or stocks in which you have put your money don’t belong to same sector else there are chances that at one time all your stocks might be in profit and other time all in loss. Why to avoid because even though all your cash is held, if you find a great opportunity, you can exit out in profit and cash the big opportunity.

3) 3) Now, once I have my system ready, I divide my portfolio equally. For example, if I feel going long on 20 stocks for 1 week period and have 2 lakhs, I allocate 10k for all. Based on probability of success of call for individual stock, utilize the money allocated for the stock.

4) 4) Wait for the right time to enter into each stock based on technical. Enter when you get signal.

5) 5) Always follow stoploss whether your heart allows or not.

Now, in my system, I have 3 stoplosses since I work on a system based on technicals and fundamentals.

STOPLOSS 1: Technical stoploss (Based on charts)

STOPLOSS 2: Fundamental stoploss ( Based on fundamentals of company, this is not a share price but rel news about company which gives a bad sign for future)

STOPLOSS 3: 30% fall from purchase price

Scenario 1: If the first stoploss hit is fundamental, no second thought, I exit immediately with whatever loss I have.

Scenario 2: If the first stoploss hit is technical, I might exit

a) If I have cash obligations of 1 week or something like

b) I get a big positive signal in some other stock

c) I discover a highly undervalued stock for long term

d) I have done my first mistake by not holding 20% of money in cash

Else I hold and average out at next buy signal keeping an eye on stoploss 2 and stoploss 3.If stoploss 2 also occurs, I exit.

Scenario 3: If stoploss 3 occurs after stoploss 1 has occured, I try to find is there a fundamental reason, it can based on profit, macroeconomic scenario, sector scenario, nature and steps taken by management ( if it is means somehow, I missed stoploss 2) and exit. Event if it is not, 30% fall means, I did a bad job as a technical analyst, I do a review of my decision and note the mistake I did in the technical analysis, make a note and add it in my list and try not to repeat it again.

6) 6) Keep track of all latest news happening you the stocks you are holding. One big news can change the game for that stock.

7) 7) If you are not able to watch stock for whole trading session, do keep stoplosses and trigger prices for buying and selling. ( you really never know what can happen. I lost heavily in suzlon due to blade problem because I was in train for 2 days).

8) 8) Always have 20% of your money in the form of cash for urgent circumstances.

For example, even if the whole sensex takes a massive dip, you can take your money out without losses by averaging out. Now why I say averaging out because we have selected fundamentally good stocks and we believe fundamental strengths are intact.

This is a situation when you done the first mistake i.e. not following stoploss.

By having 20% of money in cash and 20 stock portfolio, you always have chance to bring the money stuck in a specific stock without making loss and increase your cash holding which will make your job easier in taking cash out of other holding stocks without making losses.

9) 9) When you get big gains, Always book partial profits.

What is Big gain: Gain in terms of money over time

A 20% gain in 3 months and a 10% gain in 1 week. I would like to go for the later one if I m not sure of further upward movement ( For example, I see a sure shot decline in NIFTY because NIFTY is highly overvalued, I see a major resistance and it is only the first time the stock is trying to cross this resistance, Now, that is why I believe in mastering the stocks. There are stocks who always try to break major resistance, go in a range bound, comes near support resistance range 2-3 times and then break it and there are some who crosses it in one time, This itself is subject of study which depends on macro SENSEX scenario also).

Second, partial profit booking always helps you to re-enter on corrections with an added capital.

In short, book partial profits when either you made good profit of 20-40% and expect a retrenchment or you made good profit in a day or in a week and you see a short term resistance. Even though, we miss some bigger profit, always remember, we have other 19 stocks, so , we will keep getting our chances.

10 10) Based on your EQ & Market, try to find what a happy profit percentage is over time for you.

Things to avoid:

1) 1) Anything which is not based on system mentioned based on but based on your emotion. Here, sometimes, the level of emotions goes so high that we don’t even evaluate on system before executing our decision. For example, you made big profit on a stock call and now you feel you can’t get wrong on movement of this stock. To hell with system, you put all your money in this favorite stock to make big profit and hell, third time unlucky because no one can make 100% correct moves all the times neither technicalist nor fundamentalist.

2) Don’t jump in market with all your money until you have achieved full control over your emotions if you know you are doing mistakes due to losing control over emotion. One big mistake and it can take away your years of hard earned money and then it can take decades to get it back.

3) Don’t do further mistakes if you have done once. It’s a common mistake we do. First, we don’t follow stoploss 1 loosing control over emotions. Second, we don’t

follow stoploss 3 because some analyst is betting high on this and we end up loosing all money put in that stock. One such example is TELEDATA INFORMATICS. Even the famous ENRON on which the analysts were positive till it doomed.

Output:

1) Low risk despite of being a short term trade

2) High probability of profit

3) Peace of mind

4) Extracting profits based on both technical and fundamentals

5) Out of 20 stocks, even 2 turns multibagger, we will be the one to go through this ride despite of using technical.

Expecting your views, suggestions and quesries…….

ADSL & Parekh Aluminex joins Forbes list

2009-09-20T03:57:00.000-07:00

Two of the stocks mentioned here for long term prospects 2 months back have featured in Forbes list of best under a billion dollar company. Expecting great days ahead for them.
Still, according to me, for shareholders, the movement in parekh will be a slow and steady movement for the time being.

Add ADSL in your portfolio if you missed it last time

2009-09-19T15:12:00.000-07:00

Add ADSL at current levels, today it bottomed out . a higher close on monday will confirm its upside.Expecting it to rise agaiun now from monday provided there is no big bear rally in NIFTY.

Additional buying in ADSL

2009-09-17T12:41:00.000-07:00

Buying more of ADSL as it has consolidated from a high of 560 and currently looking very attractive at 446 with a strong support at 440.Expecting a positive upside from here within few days.

New addition to portfolio

2009-09-13T13:51:00.000-07:00

As i sold out Viceroy hotels & booked partial profits in parekh & lakshmi.With this cash i m going to add one more stock to my portfolio. FEDERAL BANK at 230 Rs tomorrow.
This was one of the stock mentioned by dalal street at 250 Rs in Aug 15 edition. I find this as a low risk, high value stock which will give returns more than a bluechip stock but having risk levels similar to a bluechip stock.
In short, it is one of the few private banks which is available at a valuation of public bank at current time.

My portfolio to be on monday, 7 sept,2009

2009-09-06T00:28:00.000-07:00

Going to sell Viceroy hotels in between 42-45 Rs which was bought at Rs 32.75.
Will be investing this amount in Praj industry & onmobile( has corrected and showed very good support at 495-510 levels.

Status of Long term calls

2009-09-03T05:06:00.000-07:00

Long term callos given in past 2 months..

1) PAREKH ALUMINAX: given at 92-100 Rs range: 10% profit from max. price
2)ADSL: given at 312, current price 474,made a high of 560 last week, accumulate more at current levels: 48% up..
3) LAKSHMI ENERGY & FOODS: Recommended at 82, current price 128: 60% up
4)VICEROY HOTEL: Given at 32,current price 42.25...33% up (This call is from 3-4 year perspective+technical perspective).If you are ready to wait for 4 yrs ok as the profits will be generated only from 2011,so might not increase from technical resistance level of 45.. Those happy with 33% earning and want to play without risk can sell it off at 42-46 levels...
5)ONMOBILE: recommended at 650, current at 490...,25% loss...This is time to accumulate more of this, start accumumating more.......

so, over all..
1) PAREKH: 10%+
2)LAKSHMIEFL:60%+
3)ADSL:48%+
4)VICEROY:33%+
5)ONMOBILE:25%-

Assuming equal allocation to these calls, over all gain in 2 months: 25%
Checks: Sell viceroy, buy more of ADSL & ONMOBILE at current levels...

I am following my portdolio which i have shared with you through the image...

Lakshmi Energy & Foods 60%+ up from recommended price

2009-09-03T05:00:00.000-07:00

Lakshmi Energy & Foods, which was recommended almost 2 months back at 82 crossed its long time resistance 121, made a high of 131 and closed at around 128, a 60%+ gain in portfoli in 2 months...Enjoyyyyyyyyy...........

2009-08-30T14:36:00.000-07:00

Merryl lynch have increased their stake from 4.62% to 5.13% last week. Another positive sign for the stock.
This was recommended when it was at 82, 2 months back,now, at 116.. Those holding this for long term can hold it. Its 12% of my portfolio and i am going to hold it.

My portfolio as on 28 Aug 2009

2009-08-28T06:18:00.001-07:00

Today's gain:

Lakshmi Energy & Foods: 600*(115-108)= Rs 4200 ( Reduced holding to balance the portfolio)

HDFC: Exited to create some cash( was not sure if will be able to sell LAKSHMI, will be entering again)

Transactions done on 28th Aug on Portfolio

2009-08-28T05:58:00.000-07:00

Please find the transactions done today on my existing portfolio.

Key changes:
1) Reduced holding on Lakhshmi as it was covering more than 50% of my portfolio, made a decent profit of 6% on 600 shares

2) Increased holding more than alloted 12% on ADSL as the script is fundamentally looking very strong right now.

3) Tried to bring other stocks to allocated level by bringing cash from sell of lakshmi

CASH IN HAND: Rs 48000

Trading call for September month

2009-08-27T09:02:00.000-07:00

Those holding Parekh Aluminex, keep holding
Buy parekh aluminax at current levels @ 110 as call for september

My current portfolio

2009-08-27T08:14:00.000-07:00

Please click to view the portfolio

I am sharing my current portfolio. Some of the stocks I am holding from 2-5 Years Perspective and some from 0-2 years perspective. I have selected these stocks based on fundamentals and for buying opportunities at its best, I am using technical skills. I will be further updating reports, reaosn for purchasing and selling and updation for any change in my portfolio.

Stocks where % allocated has not reached 100%, I will be increasing subsequently to make it 100% and those which are more than 100% (lakhsmi energy & foods, viceroy hotels), I will be reducing it subsequently to make everything 100%.

Buy: means this is the time to increase holding

Watch: Wait for signals to confirm buy

Wait: Stock is consolidating, so, till that time , we will have opportunities to buy this stock, so, better, use that money in those stocks which re in uptrend

Disclaimer: The blog is to share my views and knowledge and have discussion to gain more insight.Following my portfolio is follower's own independent decision. I am not responsible for anyone's decision making.

ADSL made a high of 560 i.e. 83% from call price in 30 days

2009-08-27T08:08:00.000-07:00

One & Only call....Blasted..........

ADLS trading at 511.. 60% profit in a month

2009-08-26T00:48:00.000-07:00

This month i came up with a single call for invesment...
ADSL@ 312 Rs(check my previous post)
Current Price: 511Rs
Gain : 60%
last month gain 7%
Total gain in 2 months: 67%....
People will short term view can sell.. Its a long term hold...
I enter and exit in this stock again and again based pon technicals to maximize my gains in the range..dont bother bout downside as its a fundamental call for next 2 years

Added Onmobile at 510 from remaining 50% money allocated for this share

2009-08-18T14:55:00.000-07:00

Now the average price stands at 580

CRISIL: Right time to enter

2009-08-18T14:53:00.000-07:00

I was watching this stock from past one month waiting to enter.Time has come.Accumulate in range of 3600-3700, both for short term(technical) & long term( fundamentals)

ADSL 60% up in 20 days

2009-08-18T14:52:00.000-07:00

ADSL made a high of 496 which was recommended at 312 Rs 20 days back.Stay invested in this..

ADSL:19% up in 5 days

2009-08-02T23:26:00.000-07:00

ADSL which was recommended 5 days back, 19% up from purchasing price,just in 5 days...

SEBI's website for company's financials & annual reports info

2009-08-02T14:46:00.000-07:00

http://sebiedifar.nic.in/

Purchased onmobile@645 from 5 year perspective

2009-07-30T14:26:00.000-07:00

Its high business growth stock with sound management...a perfect long term stock...

ADSL: Status

2009-07-30T14:22:00.000-07:00

Previous call ADSL 9% up from purchasing price in 4 days..

Stock Updates

2009-07-28T12:30:00.000-07:00

Hi..
As per my views , Firstsource made a high of 27.5 very next day.So, previous calculation remains valid.
To of my stocks viewed for long term prospects have started moving up.

Parekh Aluminex: now @105
Lakshmi Energy & Foods: @ 87

Lakshmi seems to be trapped by
1) big rice scandal by govt where on one hand itbanned export of non-basmati rice and on the other hand.it seems to be exporting rice secrelt to nigeria , got exposed when nigeria refused to accept rice import..
2) Late monsoon

With both factors weakening slowly, Share is expected to gain momentum further after today's breakout.
Read full report here:
http://ibnlive.in.com/news/upa-caught-in-alleged-rs-2500crore-rice-scam/97697-3.html

Good website for checking important finanicial informations

2009-07-26T09:06:00.000-07:00

In order to check consolidated financial reports and details of a company's raw materials,salesm and important ratios for analysis,I found this website very good.

http://www.firstglobal.in/

Allied Digital(ADSL): A good Buy at current levels fo next 2 years

2009-07-24T15:23:00.000-07:00

The Company:
Market Capitalization: 583.38 Cr
P/E: 7.53
EPS: 42.76
Year EPS Growth Rate ROE
2004 4.3% 19%
2005 87% 30%
2006 364% 80%
2007 (29.5%) 55%
2008 40.3% 36%
2009 68%

Allied Digital is a leading IT Infrastructure management and Technical Support Services outsourcing Company which enable global, large and medium enterprises and service providers to reduce their total cost of ownership using a combination of onsite and remote services.

Business Model:
Remote Infrastructure Management System(RIMS)
Among the first to start a pure play Security Operations Centre (SOC) at Mahape, Mumbai to monitor and proactively manage security for entire Information Lifecycles.
Centralized delivery system of NOC (Network Operation Centre)/SOC (Security Operation Centre) facilities. This unique centralized delivery system has enhanced cost competitiveness through the use of shared resources at a delivery centre, instead of dedicated resources for each customer; and thus breaking the problems inherent in the Linearity model of people vs. revenues.

Developments:
1) Transforming itself from a system integrator to a managed services provider. We have widened our service offering. Currently 70:30 mix is for RIMS & Services respectively. Company working on increasing service revenues as margins are higher in services
2) Successfully launched its Remote Management Services at the Companys Remote Management Services Centre at Millennium Business Park, Mahape, Navi Mumbai which is now fully operational.
3) Started its liasioning offices in Sydney (Australia) and New Jersey (United States of America) to expand.
4) During the year under consideration, signed the End User License Agreement with SAP India Limited for SAP licenses for its internal implementation.

Acquisitions:
1) On April 10th 2008 ,entered into a Share Purchase cum Subscription & Shareholders Agreement for the purchase and subscription of 51.05% fully paid up equity shares of Digicomp Complete Solutions Pvt. Ltd. Digicomp, incorporated in the year 2001, operating out of 17 offices across the country and more than 300 professionals on board, is engaged and specialized in the business of end- to-end technical support, customer care, warranty services, helpdesk services, project roll-outs, etc. This acquisition will help your Company to strengthen its Technical Business Process Outsourcing (TBPO) offering in the coming years.
2) On July 9th 2008 your Company has entered into a Limited Liability Company Interest Purchase Agreement to acquire 80.5% stake in En Pointe Global Services, LLC, (EPGS) which was a services arm and wholly owned subsidiary of En Pointe Technologies Sales Inc., (A subsidiary of En Pointe Technologies). En Pointe Technologies is a NASDAQ listed Company with revenues exceeding USD. 340 million. This acquisition is expected to strengthen the opportunity pipeline for your Company in the US market for its Remote Service offerings. The acquired entity shall also be helpful as a platform for several other inorganic growth initiatives across the globe. This acquisition underlines our commitment to expand geographically in the IT infrastructure management domain. The fact that En Pointe Global Services, LLC is a well-established Company serving the US market, gives us a ready base to expand our presence and leverage on the tremendous cross selling opportunity in Remote Management Services and Managed Security segment in the USA.

Employee addition in 2007-08: 56% (Good signs)

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Favorable points from business:
1) No dependence of foreign currency market like Indian IT companies as based on PAN India revenues
2) Diverse list of customer base
3) Scope of bringing revenues from global markets further
4) Scope of RIMS , Please read this article

http://www.thebusinessedition.com/remote-infrastructure-management-rim-the-next-growth-opportunity-1009/

Financial check points:
1) Very low debt
2) 35% plus ROE over past 4 years
3) P/E of 7.5 at current levels

4) 80% plus profit growth rate from past 4 years annually

Future Points:

The ROE is decreasing at 33% rate which is obvious based on product life cycle. If they maintain same decrement in this rate to reach a saturation level still, for next 2 years we can expect decent returns from current levels with a P/E of 7.5.

The asset turnover has been decreasing. So, is there a chance to increase sales based on assets? Need to find, Is there a chance of increase in sales due to current asset buildup.
Does company has any further plans of diluting the equity?

Reports from other sources:

1) http://economictimes.indiatimes.com/articleshow/msid-3644530,prtpage-1.cms
2) http://www.valuenotes.com/Manuj/manu_gem_20Jul09.asp?ArtCd=147840&Cat=C&Id=1553
3) http://www.valuenotes.com/SChhabria/sc_allied_21Mar09.asp?ArtCd=143194&Cat=C&Id=1553

Technical:

There was a pullback from 440 to 280 and sustained 280 levels showing consistent upper levels for 3 week average closing price signaling no further downside technically for the time being.

I feel at current market levels, this stock is a good buy for next two years based on its current scope of business.

I will post link for excel calculations soon.

July 27-Aug 30 Cycle

2009-07-24T05:04:00.000-07:00

1st Buy:
Allied Digital...Baught at 312 Rs today..
( Suited both from long term and short term time frame)

Final Report July 03-July 26 Cycle

2009-07-24T04:58:00.000-07:00

Jagran Prakasan: +20%
Provogue: +7.6%
Lakshmi: +5.9%
GVK Power: + 4.6%
Kohinoor Foods: -2%
FirstSource: Current +4% profit closing expecting 8% on monday at time of Sell
Assuming equal money allocation to all scripts,
Over all Profit/loss for 3 weeks of trade= 20+7.6+5.9+4.6+8-2/6=7.3% for 3 weeks of time frame..

status check: stocks baught on 3rd july

2009-07-24T04:49:00.000-07:00

exited 4 postions already with minimum 5% max 20% profit..
First source : purchase at 25...today 13% up close price 26.05...4% profit..
sell at 27-27.5 with 8-10% profit (expected in a day or 2)..i am still holding
Kohinoor foods: exited @50 with a loss of 2%....

Added viceroy hotels for long term

2009-07-22T03:24:00.000-07:00

Added at current levels(Rs 30) which is justified both technically and fundamentally with 3-4 year time frame based on their expansion plans..

Though for 22nd July...

2009-07-21T17:01:00.000-07:00

Is a breakout for voltas on the cards...Yes if it opens above 144 and sustains............

status update on 21st july...

2009-07-21T16:53:00.000-07:00

exited half of provogue @ 49.5(purchase price-46)..+7.6% profit....

stocks left from july 3rd portfolio for the month...

firstsource,buy price : 25

kohinoor foods: buy price : 51

added next 33% of money allocated for parekh aluminax @92.5brnging my avg purchase price to 101.35

status of shares bought on 3rd july

2009-07-19T14:01:00.000-07:00

Status of shares bought on 3rd july:

Name, purchase price, current price/sold price

jagran prakashan: 70,84, 20% profit(can exit now,full target achieved)

lakshmi: 79,83.65 5.9% profit(exited)

Provogue, 46,47,2.2% profit

GVK power , 42.15,42.3,0.5% profit

kohinoor foods: loss 51,48,6% loss

Firstsource, 25,22,12% loss

target achieved in 3 rd stcok

2009-07-19T13:38:00.000-07:00

Jagran prakashan which was recommended o july 3rd at opening price of 69.5 reached till 84 today
20% profit...

parekh aluminax

2009-07-19T13:33:00.000-07:00

accumulate more of parekh aluminax at current levels...
accumulate lakshmi at 70-75 levels..

wait for markets to correct

2009-07-08T10:25:00.000-07:00

Till now we have invested only one lot of money alloted for each script.. 2-3 lots are still in hand.Keep it intact(Those who booked profits in 2 scripts will have whole mney for 2 scripts i hand).Once market corrects, we will do fresh buying in those stocks at lower support levels.There is further downside expected upto 3600 levels of NIFTY.Further downside is possible.A bounce back above 4250 is almot remote now.

status of scripts analyzed on 3rd july

2009-07-07T08:23:00.000-07:00

status of technical recos:

Out of 6 recos made for 3rd, in 4 days, 2 targets met.This is despite of a 200 point fall in nifty which we witnessed on budget day ie the worst case scenario.Still, lot more left in these two scripts, but those who are happy with small profits can do partial profit booking but i feel , lot n lot of juice left in them..next target for lakshmi is 89.

Stock July 3rd open price, july 7 close price, profit %

1) Kohinoor foods,69.5,74,+6.5%

2)Lakshmi energy and foods,79,83.65,+5.9%

next target 89, You can buy more of them at current price levels..

Now, strategy for remaining stocks,(I did not give a stoploss because i invest in quality stocks and believe more in averaging out, till now, it has worked for me for good stocks, ie averaging out at specific levels, following 25-33-50% of cash alloted for a share at one time buying based on strength of technicals)..

1) GVK: no worries, it will achieve its target soon, bought at 42.15, currently 41.45

(A piece of advice, if you are happy making 5% prfoit in 2-3 days basis, every day set a trigger price for 5% up than recommended price, u are done..Taking this into consideration, target of GVK was obtained next day itself when it made a high of 46 as we purchased on 42.15, setting 45 as trigger would ve done .. but this is if you r very conservative about profits and happy with small pie)....

2) Firstsource: important support level of 22 maintained,so,no,need to panic right now as close was above 23 .wait for few more days we have bought at 25 based on 3rd april open price(m considerin this as per i mentioned early n not considering day's high or day;s low...fair enough on my side) so 27 means 8% profit which i am expecting soon.If there is a close below 22 be watchful

3) Jagran prakashan: wait few more days, a DOJI formed today(its a technical candlestick pattern and a triggering signal).If the script opens above todays close, use your other lot of money allocated for this script to buy more of it as it is a increase in price signal...

4) Provogue: out of 6, 1 problem area, looks almost breakin its support level, tomorrow is a crucial day for this stock, a close above 44 will confirm its support(bought at 46,current 42.95)....

Will keep updating the status.....

Sorry for spelling and other mistakes as i fight with time constraints.Anyway,look at bigger picture,not small holes.....

DISCLAIMER: These all suggestions are my personal views based on knowledge and experience.In any cae, I am not responsible for anyone's decisions.Decide on your own.

Rules

2009-07-02T17:00:00.000-07:00

1) Nature of calls:
a) Technical Calls: Based on charts with 5-20% profit objective for 1 week to 1 month time frame
b) Fundamental calls: Based on macroeconomic scenario,industry and company fundamentals with more than 6 months time frame and 25%+ profit frame.

2) Mistakes i did as beginner and you should avoid:
a) Never put all your money in one stock however good prospects are there for the stock in future because no one can predict market with 100% accuracy
b) If you have 100 rupee for investing in share, never ever block all 100 rupee in shares, always have 25% amount in the form of cash until and unless you can put additional money on regular intervals
c) Dont be very greedy and dont be highly impatient.Both turn into loosers.
d) Technical or fundamental,never get into operator driven stocks(how to find, in future blogs).

There are lot of other things to share but in further blogs............................................

calls for july 03-2009

2009-07-02T16:18:00.000-07:00

Investment call:
Time Frame : 6 months - 1 Year
Profit Margin : 25% to ........
1) parekh aluminax
The details behind this, i will post tomorrow but its an opportunity of life time so no hurries you can wait and watch as in one day it ll not achieve its target..:)
Technical calls:
Buy at <+1% of previous dat closing price
Profit Margin expected: 5-20%
Time Frame : 1-3 weeks
1) GVK Power
2) Kohinoor foods
3)Jagran prakasan
4) Lakshmi energy and foods
5) Firstsource solutions
6)Provogue india

DISCLAIMER: Following my views and calls is viewer's independent decision and i dont hold any responsibility for your losses.

Parameters	2007	2008	2009
No. of Mobile subscriber(mn)	166	250	430
ARPU(Rs)	295	250	205
VAS contribution to ARPU	7%	10%	13%
Total Telecom revenue(Crore)	58764	75000	105780
Total VAS revenue(Crore)	4113.48	7500	13751.4
VAS Growth rate%		82.32737	83.352

Category	% of total VAS In 2008	% of total VAS In 2009
P2P SMS	35%	30%
CRBT & Ringtones	35%	35%
IVR / Voice Portal	15%	12%
A2P SMS	15%	13%
Data & Email		5%
Games		5%

	FY95	FY96	FY97	FY98	FY99	FY00	FY01	FY02	FY03	FY04	CAGR**
Macro indicators
Nominal GDP growth	17.4%	17.0%	15.9%	11.8%	15.0%	10.2%	8.0%	9.9%	7.8%	11.7%	11.9%
Real GDP growth	7.3%	7.3%	7.8%	4.8%	6.5%	6.1%	4.4%	5.8%	4.0%	8.5%	6.1%
Quantum sales growth	29.6%	23.3%	19.0%	(4.3%)	14.2%	23.4%	23.5%	0.7%	11.9%	11.4%	11.9%
Stock market
BSE Sensex*	(13.7%)	3.3%	(0.2%)	15.8%	(3.9%)	33.7%	(27.9%)	(3.7%)	(12.1%)	83.4%	6.2%
BSE-100	(12.2%)	(3.5%)	(5.5%)	15.9%	(2.7%)	75.8%	(41.7%)	1.4%	(12.5%)	97.6%	7.1%
BSE-200	NA	(6.3%)	(4.9%)	14.9%	0.8%	63.9%	(41.1%)	7.4%	(8.9%)	104.3%	8.0%

	FY 05	FY 06	FY 07	FY 08	FY 09	FY 10	FY 11	FY 12	FY 13	FY 14	CAGR
BSE Sensex	7096	7808	8534	9173	9718	10302	10920	11575	12269	13006
Real GDP growth rate	9.18	10.03	9.30	7.48	5.95	6.00	6.00	6.00	6.00	6.00	7.20