We all want to succeed in investments, but there are very few us who are willing to prepare for this success. Preparing and positioning yourself to take advantage of opportunities is something that is not learnt easily. It takes time and effort. What kind of effort are you making? I am continuing to expand watch list and buy list. I would like to be prepared for what I want to buy at next opportunity or when they fall in my fair value range. Following are three large caps that I screened.
Container Corporation of India Ltd (CONCOR): It is a Indian PSE wherein the Indian Government holds 63% shares. The company provides multi modal logistics services for domestic and international containerization trade. It consists of inland transportation services by rail for containers; management of ports, air cargo complexes; and establishing cold storage chains. In India it has largest network of 59 inland container deport and container freight stations.
- Operating Cash flow (positive, slow growth, but overall increasing trend)
- Debt (no debt, I like such companies)
- Dividends (yes, seems good quality)
- Reported Net Profit (positive, and overall increasing trends)
- Margins (positive, flat and stable)
- Capital usage (flat, historically reducing)
- I like this company because of its debt free balance sheet, cash flow, and market leading position. To me, it appears that management is doing good job of maintaining decent margins and use of capital.
- Liquidity is a concern.
- This could be a good company to hold in dividend portfolio. I will continue to read more about it.
Indian Hotels Company Ltd (INDHOTEL): The Company, together with its subsidiaries and jointly controlled entities are engaged in the business of hoteliering with the exception of two jointly controlled entities, which are engaged in the business of air catering. The other areas of business include ready to eat/ready to cook foods business, but is not significant in terms of revenue. This company operates like a holding company, but is not incorporated as a holding company. It consists of more than 60 hotels across India and about 15 hotels located internationally. It market segment is wide spread in luxury, premium, mid-market, and value segments of the hotel industry. Its brand include Taj, Taj Exotica, Taj Safari, The Gateway Hotel, Ginger, etc.
- Operating Cash flow (positive, volatile/cyclical)
- Debt (high debt)
- Dividends (yes)
- Reported Net Profit (positive, volatile/cyclical)
- Margins (net profit has reducing trend, in single digits)
- Capital usage (reducing trend, in single digits)
- High debt and relatively low dividends deter me from reading more about Indian Hotels.
Tata Global Beverage (TATAGLOBAL): Tata Global Beverages Ltd, formerly Tata Tea Limited, is engaged in processing, marketing and distribution of tea products. It operates from United Kingdom. It operates in three market segments (1) Tea – consists of cultivation and manufacture of black tea and instant tea, tea buying/blending, sale in bulk or value-added form; (2) Coffee and other produce – consists of growing coffee, pepper and other plantation crops, conversion of coffee into value-added products such as roast and ground coffee and instant coffee; (3) Others- consists of sale of natural mineral water, other minor crops, curing operations of coffee and trading of items required for coffee plantations. Some of its principal brands include Tetley, Tata Tea, Good Earth (herbal tea), Himalayan (bottled water), VITAX (herbal tea), JEMCA, (herbal tea), Eight O’Clock (coffee), TATA Coffee, GRAND, etc.
- Operating Cash flow (reducing trend)
- Debt (high debt, more than cash flow and profits)
- Dividends (yes)
- Reported Net Profit (cyclical)
- Margins (cyclical)
- Capital usage (stable in mid teens)
- In last couple of years, the company evolved from India centric TATA tea to a global company, to form TATA Global Beverage Ltd. Now, close to 70% of its revenue comes from international markets.
- High debt is my concern, but it is likely this global growth was funded by debt. Will this continue? Or the company has completed the transformation? I would tend to believe that, with this transformation, it has positioned itself beyond Indian markets.
- I like high dividends, and hence I will continue to read more about it.
CONCOR and TATA Global Beverages seems to have good potential for my long term portfolio. I will skip Indian Hotels. These are based on preliminary screen type of reading. Who knows, when we dig deeper something else may pop up.
What are your thoughts? Do you agree? What are your observations?
CONCOR, container corporation, INDHOTELS, Indian Hotel Company Ltd, large caps, stock screening, TATA global beverages, TATA TEA, TATAGLOBAL