Carnival of India Stocks – December 12, 2009

Welcome to Carnival of Indian Stocks. This edition of the carnival includes 10 articles for fellow bloggers. Some of the articles presented here may be contrary to the topics I discuss on this blog; however, it provides a view from a different window. I hope you enjoy reading some of the diverse set of articles as much as I did.

That concludes this edition. If you would like your best article to be included here, then submit your blog article to the next edition of Carnival of Indian Stocks. If any blogger(s) is interested in hosting this carnival, then please contact me.

Year 2009: A Bit of Nostalgic Reflection

shadow_warriorsEven after completing my schooling and college education, I still continue to be a student and always eager to learn more in anything I do. There are few characteristics of being a student; viz., you will have to have an open mind otherwise nothing new will go inside your head, you will have to take exams and tests, and you will fail on some and you will pass of some. The trick is to keep passing on more occasions and minimize your failed questions. However, there are differences in being student in school and being student in life. Among many of these differences, I am talking about two specific ones.

The first difference between schooling days and life is; there is no one fixed teacher to whom you can turn and ask questions. As a student I was always scared of test and exams. It scared the hell out of me. The fact that one never fails in any exams, in reality, puts more pressure during the next exam. In life, experiences in daily life and the daily grind one goes through; is your teacher. There are no ATKTs where you get another chance in six months. You fail once, it will hurt you and in many cases it takes more than six months time to repair or correct it. Continue reading rest of this article…

Short Listing Five Small Caps for Potential Long Term Investments

to-do-listI am continuing to keep looking for good companies and prepare my watch list.  Keeping with this thought process; I looked at few stocks in small cap domain and applied my screening process. I have short listed following five small cap companies that I believe warrant further detailed analysis in the context of my buying objectives.

Aegis Logistics Limited, (AEGISCHEM): The company is focused in supply management of oil and gas logistics. Liquid Terminal Division provides storage and terminal facility for oil and chemical products. Gas Terminal Division provides imports, storage, and distribution of petroleum products like LPG and propane. It services are related to sourcing of product, storage and port operations, arranging road and pipeline movement, shipping, and integrated supply chain management. This is a small cap which has potential for long term buy and hold because it operates in infrastructure sector and good financial management.

Continue reading rest of this article…

Gold: Should I be Investing ?

gold-bars-3Gold is going bonkers. At present, all it knows is how to climb up. Central banks around the world seem to have caught the bug of buying gold. China wants it, India bought it, Sri Lanka bought it, Russia openly expressed interest, and probably few more. One common theme in all central bankers buying gold seems to be the desire to maintain the value of its assets. Since the continued supply of printed dollar is flooding the global markets, individual nations believe there will be reduction in value of dollar. And hence these central banks want to hold their assets in gold (rather than dollar). Few other factors that one can think of are as follows:

  • Historically, gold is a perceived as safe harbor against collapsing economy, political unrest, collapsing currency, etc. And situations like US/UK sovereign debt, Dubai, Japan’s losing economy, etc does not help. This kind of environment only fuels the gold binge. Continue reading rest of this article…

Blue Star Ltd: Stock Analysis for Long Term Investment

logo-bluestarBlue Star Limited (BLUESTARCO) is India’s largest central air conditioning company with an annual turnover of Rs 2574 crores, a network of 29 offices, 5 modern manufacturing facilities, 700 dealers and around 2600 employees. Blue Star primarily focuses on the corporate and commercial markets. These include institutional, industrial and government organizations as well as commercial establishments such as showrooms, restaurants, banks, hospitals, theatres, shopping malls and boutiques. It also has leadership in the field of commercial refrigeration equipment ranging from water coolers to cold storages.

I like that fact that the company is generating approximately Rs 1 Crore of revenue per employee, has low debt, brand value, and leading position in its industry. Blue Star passed my stock screen, and hence it warranted an analysis to understand if meets my objectives.

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Festival of Stocks – 169th Edition

This week I have the honor of hosting the 169th edition of the Festival of Stocks.  This is the second time is hosting the festival. According to the festival’s original sponsor, ValueInvestingNews, The Festival of Stocks is a blog carnival dedicated to highlighting bloggers’ best articles on stock market related topics. This will include research and commentary on specific stocks, industry analysis, ETFs, REITs, stock derivatives, and other related topics.

Now, on to this week’s submissions. There are a lot of good posts included in this festival from writers and thinkers. I hope you enjoy reading all of them as much as I did!

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Telecom Companies Following Path Airlines Did – Digging Their Own Graves

riskLately, we are seeing telecom companies cutting voice and SMS rates in an attempt to keep up with one another. The main focus in these rate cuts is to ensure that they maintain (or increase?) their market share. The rates are now being calculated in paisa per second for voice and one paisa for one SMS message. Coming from the consumer side these are best times to be using cellular phone for communication. To me, pricing these services in terms of paisa and seconds means this is practically free, relative to what a rupee can buy in today’s market. More so, when you start thinking about the capital expenditure in developing these communication networks and licensing fees involved.

As an investor, I believe these telecom companies are digging their own grave. These do not seem to make any economic sense. You will not find Rs 5 cutting tea on the roadside, but you can use a high tech wireless communication network for 30 minutes for less than Rs 5. Something is missing here. The rates for making calls were already among the lowest in the world. Now, this mad race will bring it down further, and will perhaps make them the lowest in the world. I am passing few of the publicly traded companies through my stock screen to see if it generates interest in me.

Continue reading rest of this article…