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This is a guest post (unedited version) from Sherin Devassy, a personal finance and investment blogger at The Money Maniac. You may visit his blog for more information on value investing guidelines and personal finance guidance. Sherin is an investor for long term and has built a stock portfolio including most of the above mentioned stocks with a very long term focus. You can contact him at investinternals@gmail.com
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Selection of a company to invest is not simple. But, in the same time, it is a simple task too. Commonsense plays major roles in selection by considering most important factors that any one can easily understand and adapt. By remembering legend investor Warren Buffett’s investment criteria’s, here I am listing 10 Indian companies that capable generate enormous wealth for long term investors.
Remember, companies mentioned in this article are not for short term investors. Most of them in this list have defensive character and suitable for investing to meet long term goals such as child higher education, marriage, buying a home etc. By remembering the classic rule, invest for long term, I assure any investments on this companies more than 15 to 20 years generate wealth like an ocean.
I have selected and listed these companies using some selection criteria’s. As the first, companies listed here have one or more product that is into the monopolistic position in Indian market and merely impossible to beat their position by others. Secondly, these companies have efficient management with innovative ideas and strong network across India. Finally, these companies have very few or no debt and registering year to year yearning growth.
1. Britannia Industries
Go to any shop, whether it is small or large mall, anywhere in India, whether it is a metropolitan city or remote village, you are able to find Britannia biscuits. Such strong brand along with extra ordinary sales network, bring this company as one of the gem in India. Continue reading rest of this article…
Welcome to the April 30, 2009 edition of Indian Stocks Mania. This is second edition of this carnival. It may seem that there are post that are not representative of the Indian Equity Markets. However, the concepts presented by submitters can very well be applicable to Indian Investors. I received 43 articles from different set of bloggers. All articles were good and demonstrated respective author’s good effort. I did not include some of them because they would not be relevant to Indian Blogger or world of Indian investing. Enjoy Reading!
Editor’s Pick
- Jae Jun presents Fortune 40 Best Stocks to Retire on: Part 1 posted at Old School Value, saying, “Putting a fair value estimate on 40 of the best stocks to retire on. This is part 1 where we take a look at the first 10″. NOTE: For long term investors, this is a good example of how to create a watch list based on any individuals investing philosophy or strategy.
- Smart Money India presents Charges other than Brokerage for Stock Exchange Transactions posted at SMART MONEY INDIA, saying, “Detailed information on statutory charges on stock exchange transactions, other than Brokerage charges, like Securities Transaction Tax (STT), Stamp Duty and Other Charges”. NOTE: This one is for short terms traders who can understand the implications of these taxes and real returns when trading.
Continue reading rest of this article…
Pidilite Industries Ltd. Limited (Pidilite) is a consumer and specialties chemicals company. Its product range includes adhesives and sealants, construction and paint chemicals, automotive chemicals, art materials, industrial adhesives, industrial and textile resins, and organic pigments. It has several market leading brands that include Fevicol, cyclo, Sargent Art, hobby ideas, Dr. Fixit, ROFF, and m-seal. Two thirds of company’s revenue comes from India’s internal market. Historically, the company has developed most of its product thought a very strong in-house development program. However, in recent years, it has embarked expanding this reach by overseas acquisition and setting up overseas manufacturing units.
Trend Analysis
The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 8 years 2000 to 2008.
- Revenue: Increasing trend with average growth of 18% (SDev. 7%).
- Earnings per share: Increasing trend with average growth of 20% (SDev. 18%). This shows very high year-over-year variability.
- Net cash flow from operations: Overall, the net cash flow from operations has an increasing trend. For most part, the net cash flow has been very close to the reported net profit. However, since 2007, it is less than reported net profits. Not a good observation.
- Profit/Loss from operations: Looking at standalone profits only, the corporation is showing consistently increasing profits from its operations. Good observation.
- Reported net profit: Increasing trend. Good observation
- Gross margins: A slow downward trend on gross margins. 2008 gross margins lower than historical average of 16.5% (narrow stdev. of 1.36%). Still not an alarmingly low level. Neutral observation.
- Operating margins: Operating margins in-line with historical average. Neutral observation.
Continue reading rest of this article…
Tipster, You are Fired!
Ever since I started investing, I have always been intrigued by the stock advisors, tipsters, some of the mutual fund managers, portfolio managers, etc. In short, I am talking about the stock tips and stock advising profession. This is the profession which claims to take care of our financial investment at a fee (and off course with no return of any quality service).