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Sunday, May 25, 2014

Can you find the stock? – ‘NOT’ my next find

I got intrigued when within a short span I was asked about this company from multiple sources. This included analysts, common investors, and retired professionals. So thought to spend time to understand this company and that is how it has become ‘NOT’ my next find. :-)

  • The company claims to be the 'Premier Consulting partner' and says that it is one of the 15s in the world. Is it so?
  • It has changed its name in the past and gave a ‘fancy’ name that at least I could not understand
  • It was a steel manufacturer, after name change and alteration of object clause A of MoA, it has entered into the field that is the talk of the town
  • The name and MoA modifications proved good for the company. The market cap has gone up more than 25 times in last 4 years
  • The stock is trading more than 6 times the book value of 2013
  • The stock is trading more than 40 times its revenue of 2013, and ‘we’ expect to see moon now.
  • The company has not paid dividends at least in last 6 years
  • The promoters issued additional shares and increased authorized capital at least two times in last 5 years
  •  It has issued the bonus shares also in the past, what else do you want?
  • The promoters holding is healthy at around 66% but with a caveat. More than 50% of promoters holding is pledged (i.e. 36% of the total holding). It means unpledged promoters holding is just 30%
  • The OCF was negative in 2013 and ‘zero’ OCF was reported for four years from 2008-2011.
  • I know at least one leading brokerage house that has a report on this company and also issued a visit note to its clients
  • No wonder the stock price is doing ‘so well’ and ‘gullible investors’ want to ride on the ‘left out’ wave.

As always, I will wait to hear from you. Please flood my mailbox niteen.dharmawat@gmail.com with your responses. :-)
Disc.: I do not hold this stock.

Regards,
Niteen S Dharmawat

p.s.: The above factsheet is based on the sources that I consider reliable. However, I do not vouch for the accuracy of the data and will not be responsible for any profit or loss. Please carry your research before you take any financial decision.

Previous two quizzes: You can see the answers under the comments section using following links - http://goo.gl/5ZQVdE and http://goo.gl/5Dv8qE

3 comments:

Bhalchandra Bhuskute said...

Hi Niteen,

I also enquired about this company but after your advised, i did not invest in this company. providing cloud services to amazon - partner. bla bla.

Thanks & regards

Bhalchandra

Niteen S Dharmawat said...

Yes Bhalchandraji. I remember that. There were few more who asked about almost the same time as yours. Need to be cautious with such companies.

Niteen S Dharmawat said...

I have disclosed the answer of my third quiz question. This company, in my opinion, SHOULD BE AVOIDED.

I have already given several reasons in the form of quiz questions. But I am providing some additional inputs that I received from various respondents or researched during the course of discussion of the responses received. It was like more we dig into this company, more skeletons come out.

You may check the name of the company here: http://www.slideshare.net/ndharmawat/quiz-response


Disc.: I do not hold this stock.