Category: stocks

Jetking Infotrain – Going places

Technicals: Jetking has reversed its trend after making double bottom on the quarterly charts. Last time from that bottom it had gone up to 600 plus. Last month it also broke and close above its long term average on huge volumes. The breakout month had volumes greater than the entire quarter. The long term moving average cross over has also happened and last but very important thing is that the weekly bollinger bands compression that was happening for last so many months has now started decompression because of last month’s breakout and this decompression on longer term can take the stock quite high.
Story: The commpany has transformed itself from hardware training insitute to software training institute with latest courses on IoT, machine learning, Hacking, Cloud computing etc. The company is debt free with low equity and the promoters have increased their stake by buying from open market and they keep on doing it regularly. It has six company owned centers with their market value itself at close to 50cr with cash and mutual fund holding of around 15cr which is more than 35cr market cap of the company. Jetking has given an EPS of 1.8rs for this quarter. SL – 20rs.

BSL Ltd – Ready for Takeoff

Technicals: BSL has super bullish charts and is now looking to trend up. Last month, it broke medium term resistance on massive volumes. Last month’s volume more than the the previous three months volume. December month’s volume is already crossing last month’s volume and we still have a week left to the month end. On daily charts there is a cross-over of medium term moving average cross-over of long term moving average and also, on the weekly charts, there is a moving average cross-over of medium term over long term signifying significant upside potential. Momentum has already broken-out and with this volume backed moving average cross-overs in short and long term charts means a big move is coming very soon.

Story: BSL is one of the largest fully vertically integrated textile companies in the South Asia and also sells its suitings and shirting under the famous brand “BSL”. I guess the company is launching its own branded Ready made garements also which is driving this re-rating. The company belongs to one of Rajasthan’s biggest group, the LNJ Bhilwara Group. The group has other listed companies like RSWM and HEG which have been huge wealth creators. The company is paying regular dividend and has land worth several hundred crores. Yesterday, the goverment has announced huge package for Textiles and this being one of the biggest job creators, this sector will get big attention even further.

Annual Report-> http://www.bseindia.com/bseplus/AnnualReport/514045/5140450317.pdf

http://www.bslltd.com/

Gitanjali Gems – Ready For Takeoff

Technicals: The stock broke the long term resistance band a couple of weeks back by taking out the previous year’s high’s on record volumes. Infact the volumes of the breakout month was more than the previous three quarters combined. Now that the resistance is gone on very strong volumes, the stock has come out to test is breakout range and is now ready for takeoff. The long term chart has now turned bullish. Moreover, there has been a moving average crossover where the medium term moving average has crossed the long term moving average and thus this takeoff is imminent.

Story: This is a company backed by strong brand and is available at around 800cr market cap only and is available at cheapest valuation among its peers. Further, the last quarter has been a block buster and the entire sector is in bull market. Nakshtra’s IPO will cause a major re-rating in the stock.

AR-> http://www.bseindia.com/bseplus/AnnualReport/532715/5327150317.pdf

http://gitanjaligroup.com/

 

Sampre Nutrition – Keep an Eye

Its broken out and the momentum which i had been advocating is now coming here. Last month it broke out with 2.5 times the volumes of previous month and now yesterday it closed above the 52 week highs taking out the previous month’s high on big volumes. Is some good news nearby? Only time will tell but the stock is preparing for triple digits it seems.

Freshtrop Fruits – Now an FMCG company

Technicals: Freshtrop fruits has given a massive breakout after months and months of consolidation in long term averages and now both momentum and price action has confirmed a strong breakout on the long term charts. It has now started a move which will take it to newer highs. The volume action this week has been very strong so now all three parameters of breakout i.e. price volume and momentum is indicating a strong upmove towards to highs in the coming months.

Story: Freshtrop fruits till now was basically a fruits exporter (the largest in india) and is the most profitable among them too. Now they are launching their own ready to drink  beverages and this should now significantly re-rate the company as now it will be rated as FMCG company. This is the reason behind the breakout. SL 80rs

Link to AR->http://freshtrop.in/pdf/Annual%20Report%202016-17.pdf

http://www.freshtrop.com/

 

Virinchi Ltd

Technicals: The stock gave an all time high breakout after decades of consolidation. This breakout was very difficult because for this to happen it had to break its listing high, which is normally one of the most difficult technical barriers. Now that it has broken it and closed above it on long term charts as well, the stock has come back to its breakout levels and is giving us a last entry point. In all likelihood we may not see these levels in future and this also means that on the charts, the downside is very limited. Furthremore, the short term time cycle has turned and its going to re-start its upmove.

Story: This one is really mispriced by the markets and as market recognizes this, it should significantly re-rate it. Basically, its an IT (products + services) and healthcare company.  The fortunes changed, when the management changed in 2015. Let’s look at the valuations of the healthcare part. They have a working set of 550 beds hospitals and given that the valuations goes anywhere between 3.4-4.5cr per bed (as per the recent deals in PE sector and last failed deal of fortis), the present valuations come around 3.4cr*550 = 1870cr (taking the lower end of valuations) against the present market cap of just 230cr. Now add to this 150 beds that is coming on-stream in this quarter and another 100 beds coming onstream in last quarter, I think the company is extremely undervalued. Also, its just trading at 13 times trailing PE. And this we are just talking about healthcare business. Their Software business is also doing well, with good product acceptance in US and their services business has grown 5-6 times since the management change.  There is a wonderful presentation on the business by the company and that gives detailed analysis of business.

http://www.virinchi.com/pdf/Virinchi_Investor_Presentation_01062017.pdf

Link to AR -> http://www.bseindia.com/bseplus/AnnualReport/532372/5323720316.pdf

http://virinchi.com/

Sampre Nutritions – A Candies FMCG Company

Technicals: The stock after breakout of all time highs consolidated for last few quarters and now with moving averages firmly catching up, a major compression of long term averages happened and its now expanding. This moving averages decompression would now cause serious price appreciation in the coming times. Last time, when such decompression happened the stock went up 8-9 times. As we say in technical science that history normally repeats itself (in patterns) – only the timeframe varies. Last week it has confirmed the resumption of long term uptrend and it is now at the cusp of a new long term uptrend which could see a similar price action albeit at a different time frame. The momentum indicators have already started their upmove on the long term charts, which is normally a precursor for prices.

Story:  Sampre is a candies manufacturer of brand “Sampre” and is also mainly the biggest contract manufacturer of Candies and supplying candies for Modelez, Dabur,HUL, Nestle,Cadbury and now the biggest of all Patanjali.

Some very compelling reasons I find:

  1. The company is transforming itself into a FMCG company with plans to resurrect its “Sampre” brand of candies which was abandoned a few years back (because of low monetary profile).  This will cause a serious re-rating as its just trading at 0.4 times its sales as against 5-7 times other companies trade.
  2. The company has grown revenues at four times in last five years, this despite a 30% decrease in FY17 (more on this in next point).
  3. Till last year Sampre had grown its revenues 10 times in last 9 years (a stellar performance)  but the focus was changed to high margin products and this caused them to discontinue low margin production (for smaller clients) and product mix was changed. This made them get successfully into higher margin pharma candies and boiled candies. Another important step was to get back into their branded candies “Sampre” which would give them moat.
  4. Now, this strategy is paying off, as is evident in the results. Although due to discontinuing of smaller clients there was a one time hit on topline and it reduced 30% last year, the operating margins actually improved by 50%.
  5. Very important point to note is that this margin improvement has come on back of record high prices of their key raw material – Sugar. Now the sugar cycle has peaked and will go in downtrend for the next 6-8 yrs of cyclical downtrend. Imagine the big fillip to the operating margins.
  6. The company has recently bagged new clients like Dabur and Patanjali. Infact the patanjali order is so big that they have undergone a major capacity addition and is slated to start in this quarter.
  7. Biggest plus is the resurrection of Sampre brand.
  8. Largest contract manufacturer of Candies and biggest beneficiary of GST.

SL – 26rs.

AR :http://www.bseindia.com/bseplus/AnnualReport/530617/5306170316.pdf

http://www.sampreltd.com/home.html

 

Vidhi Specialty Food Ingredients

Technicals: Vidhi Specialty food is technically and fundamentally one of the best small caps. Such is the technical strength that as nifty crashed a couple of years back, the stock actually went up by three times during that period. Now it has been consolidating for last 6 quarters and its time correction is now over and momentum has started to build up on monthly and quarterly charts indicating resumption of long term uptrend. There is a severe long term moving averages compression and the moves that follow such compression is usually strong ones.

Story: This is the world’s third largest food colors company and has said that it will grow its turnover by over three times in next three years. The company has staggering ratios of RoE and RoCE of over 30% and a dividend payout of a hefty 28%. It declares dividend every quarter. The momentum that is building on the long term charts seems to be suggesting that finally the market seems to be believing that the growth will cause huge re-rating on the stock. The promoters hold above 64% stake. The company has negligible debt. This is a recession proof business. SL – 44rs.

http://www.vidhifoodcolour.com/

Link to AR-> http://www.vidhifoodcolour.com/financial/annual_report_2016.pdf