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Superhouse Ltd ..... on the house?

I am currently analyzing Superhouse Ltd. (BSE: 523283, http://www.superhousegroup.com ), a manufacturer and exporter of leather goods based out of Kanpur, India. The stock is currently quoting at Rs. 56 (having gained 16% in the last one month). Let us analyze the available information and see what makes it interesting? + Sales have increased 3.4 times ( Rs. 136 crore to Rs. 463 crore) across the last 10 years + Current Assets (at Rs. 231 crore) are 1.64 times more than current liabilities (at Rs. 141 crore) + Debt-equity ratio (at 0.74) is less than 1 + No loss in the last 10 years and net profit increased 3.3 times (from Rs. 5.8 to Rs. 19 crore) + 10-year EPS CAGR of 9.27% (from Rs. 7.02 to Rs. 17.38) + A modest book value increase of 1.75 times (Rs. 73.58 to Rs. 129.19) across 10 years + Continuous dividend payout for the last 7 years + Unchanged promoter holding of 54.5% across last 3 years Based on TTM data, this works out to P/BV of 0.43, P/E of 3.22 and Earnings yi
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Bannari Amman Sugars - Amma Thuje Salaam!

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Bannari Amman Sugars (BSE: 500041, NSE: BANARISUG) is a south India based sugar company. I analyzed the financials early Jun-2012 when the stock was quoting at Rs.606.95.  Across the last 10 years, + Sales increased 3.4 times (from Rs.348 crore to Rs.1181 crore) + Current Ratio is 2.65 + Debt Equity Ratio is 0.72 + Net profit increased 5.3 times (from Rs.19.7 crore to Rs.105.7 crore) + Was profitable each year + EPS increased 4.5 times (from Rs.20.62 to Rs.92.37), a CAGR of 9.69% + Book Value increased 4.8 times (from Rs.149.08 to Rs.712.43) + Uninterrupted dividends for the last 23 years + Promoter holding is 54.72% Good financials and a Margin of Safety of 77%, at the then price of Rs.606.95. Too sweet to say no, eh? So, what did I do? Seeking the blessings of Bannari Amman Mother , I purchased ... and was aptly rewarded. The stock moved to Rs.910 and I got 50% returns (between 10-Jun and 10-Aug) and sold my holdings. No longer attractive for me since the Mo
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Oakmark International Fund: David Herro

Oakmark International Fund, a Chicago based Hedge Fund, managing close to $ 8 billion, is betting big on European banks. With the Euro at a two-year low, Greece on the brink of an impending disaster, Spain and Italy in increasing troubles, Oakmark has invested close to a billion dollars in European banks, more specifically BNP (France), Banco Santander (Spain), Intesa Sanpaolo (Italy) and the Bank of Ireland. This calls for guts, which the fund manager Mr. David Herro (crowned by Morningstar as the international stock fund manager of the decade in 2010) seems to have in large proportions. His approach is strictly "bottom up investing". However, the results have to be seen when the European drama plays itself out fully in the next few years. He actually explains his approach and mentions the banks that are available at an attractive valuation. Link to video: http://www.bloomberg.com/video/93636895-herro-on-investing-in-european-financial-stocks.html Mr. Herro has a h
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Cementing your portfolio with Kakatiya

Kakatiya Cement Sugar & Industries Ltd. came on my radar and an analysis on the last 10 year data yielded the following results: + Sales increased 1.82 times (92.51 crore to 169 crore) + Current Ratio is 2.72 + Debt Equity Ratio is 0.05 (2011 data) + Net profit increased 4.38 times (5.05 crore to 22.13 crore) + Did not suffer any loss in the last 10 years + EPS increased 4.3 times (6.5 to 29.94), a CAGR of  5.06% + Book Value increased 2.6 times (77.39 to 200.9) + Uninterrupted Dividend for the last 23 years + Promoter Holding is 49.34% There has been a dramatic increase in the latest EPS (5.03 in Mar-2011 to 27.94 in Mar-2012). To smoothen out such fluctuations, I normally take the 3-year average EPS of ending period (2012, 2011 & 2010) and the beginning period (2004, 2003 & 2002). At a CMP of Rs. 79.60, the MoS works out to be 227%. Conclusion: For me, it is a buy, till I reach my diversification target or if falls out of the MOS target. Invictus.
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Fooling All of the People Some of the Time - 1

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“You may fool all the people some of the time, you can even fool some of the people all of the time, but you cannot fool all of the people all the time.”  - Abraham Lincoln Now, what has the above to do anything with investing? Actually, a lot - with market psychology, about how greed and fear drive the forces of financial markets. The "alpha" (excess over normal market returns) is made by intelligent investors because all of the people get fooled some of the time. It has been rightly said that men think in herds, go mad in herds and only recover their senses slowly, one by one. One occasion in history when an entire nation deluded itself was the infamous "Tulipomania". In the late 1500s and early 1600s, the unpretentious and innocent-looking tulips took an entire country for a ride. They were eagerly sought after by the wealthy folks in Holland and Germany. People became intensely passionate about the tulips. Prices were exorbitant and common sense was left
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Craning our neck towards Sanghvi Movers

Sanghvi Movers, the largest crane services company in India/Asia, is the 7th largest in the world. A quantitative analysis of the last 10 years yields thus: + sales have increased 16 times (22 cr to 361 cr) + net profit has increased 1200 times (from 0.0694 cr to 86 cr) + no loss in any year + eps has increased 997 times (from 0.02 to 19.94), a CAGR of 48.93% + book value has increased 11 times (from 11.58 to 1245.94) + uninterrupted dividends for the last 8 years + promoter holding is 45% - Long Term Debt Equity 1.11, which is slightly higher than my target of 1.00 - Current Ratio is 1.50, which is lower than my target of 2.00 At a CMP of Rs. 108.50, it seems to be attractively priced, with a Margin of Safety (MOS) of 110%. Conclusion: For me, it is a buy, till I reach my diversification target or if falls out of the MOS target.
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Who is the Greater Fool?

  “If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”  - Warren Buffett "In every trade there is an idiot and if you don't know who it is, it is you" - Meir Statman On Fool's day, let us talk about the Greater Fool Theory. Interesting thing about investing in stocks is that there are always (at least ) two points of view for every trade.  For every person who is buying a stock thinking the price will go up, there is a person on the other side selling the stock. Now, assuming no insider trading and assuming both the parties have exposure to the same information, it is not clear who has the relative advantage? What this augurs for the intelligent investor is that he should buy/sell only if he is clear in his mind and sure of the reasons for doing so. There is a concept called the Greater Fool Theory - this means people purchase a stock with the assumption that they will later be able to sell i
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