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Screen Testing Four Small Cap Companies

TIP Guy 13 January 2010 screening, stocks 23 Comments

Readers of this blog have few suggestions for investment ideas or stocks. They have requested to provide my comments and my observations about these stocks. Following are my thoughts. Before you go through them, please understand that these observations are for my objectives.


MIC Electronics Limited (MIC): The Company is a global leader (who made them global leader?) in the design, development, and manufacturing of LED Video Displays, LED lighting solutions, and Embedded Systems/Telecom Software. Most of its revenue come from LED Video Displays, that have become an integral part of sports stadiums, transportation hubs, digital theatres and theme parks, advertisements and public information displays. Continue reading rest of this article…

Gujarat Gas: Waiting for Right Price to Buy

TIP Guy 3 September 2009 analysis 11 Comments

GG logoGujarat Gas Company Ltd. (GUJARATGAS) is India’s largest private sector company in natural gas transmission and distribution. As the name suggests operations are in state of Gujarat. It distributes natural gas to industrial, commercial, and domestic customers. British Gas Group has a majority of the stake of close to 65% stake in the company. Few key aspects that I like about Gujarat Gas are its business model of gas distribution and practically debt free balance sheet.

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 i.e. from 2000 to 2008.

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Dividend Investing – Few Tidbits

TIP Guy 30 August 2009 dividends, education, process No Comments

1133804_sign_success_and_failureIn my last post, I discussed about two important but overlooked aspects about dividend investing. Today, I am discussing few tidbit that I have learnt over the years.

Dividends provide stability in your portfolio: Companies that are generating profitable cash and sharing with shareholders are the ones that do not go bust. Even in down market they give you cash dividends. While your portfolio’s capital values go down, your dividends are positive return to you portfolio. I crave for such a scenario. I position myself to make sure I have enough cash to buy such companies at lower valuations. I see downturn such as early 2009 as an incredible buying opportunity.

Dividends to investors cannot be manipulated: Companies demonstrate profit in their books which fuels the market price. But can you as an investor spend company profits? Profits can be generated from financial engineering, ROC or ROE can be engineering, but cash flow from operations or dividends to shareholders cannot be manipulated. As an investor you need cash to spend, and not company profits. The company you work for gives you cash (and not profit statement). Will you be willing to work for profit statement? Probably not!

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High Dividend Yield – Good or Bad?

TIP Guy 18 August 2009 commentary, dividends 3 Comments

As always there is no simple answer and it depends on many factors. For me, it does not matter whether it is high yield or low yield. One of the key aspect that I look for in dividends is its sustainability.

Focusing on high initial dividend yield may be good for someone who wants to harvest only dividends and get out of the stock. This is a high risk preposition. The dividend cash you receive may or may not cover the stocks price fluctuations. Since I look for longer term, high yield is acceptable, if I am able to understand how the company is sustaining it. Let us take few examples.

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Corporate Dividends in Emerging Markets – Some Thoughts

TIP Guy 6 July 2009 dividends, opinion 7 Comments

The creation of Pan Asia Dividend Aristocrat index by S&P is a realization that Asian economy (specifically emerging markets) will continue to grow. This is a step in right direction to recognize managements who are prudent in their cash management over a longer term of 10 years and more.

The newly created S&P Pan Asia Dividend Aristocrats consists of 31 corporations. Of these 31 corporations, only five companies are from emerging markets of China, Taiwan, and India. Many readers will view this lack of dividend growth in emerging markets (including India) as shot in the arm saying dividends does not provide significant return. My viewpoint is different. The chart, I presented earlier shows that dividends provide approximately one third of the total returns over 10+ years.

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S&P Pan Asia Dividend Aristocrats

TIP Guy 5 July 2009 commentary, education No Comments

Standard & Poor’s is a US based provider of financial market intelligence which includes ratings, investment research, risk evaluation and data, and various types of indices. Among multiple different indices with different focus areas, one index is the dividend aristocrat index.

The Dividend Aristocrats is an index which consists of S&P500 companies that have been raising dividends continuously for 25 years or more. That is, every year, the dividend per share keeps on increasing. If any company that reduces or cuts the dividend in any given year, it is removed from the index. Now this is the characteristics that can be viewed in multiple ways, but TIPBlog is about Indian investments. Therefore, I will not go into detailed discussion. But it gives the context for this posts further discussion.

In markets of Asia or other parts of the world, it has been difficult to find a single company that has consistently raised their dividends year after year. Outside United States, there has been lack of consistency in the way the corporate’s managed dividend strategy, or the way the government policies taxed dividends to companies and common shareholders.

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Eight Companies Confident to Raise Dividends for Shareholders

TIP Guy 24 May 2009 dividends 5 Comments

There are quite a few companies that are confident in their cash flow and profitability that they are sharing increased dividends with their shareholders. I believe this shows management’s confidence in their business prospects going into next financial year. There are many companies, but for now, below is the shortlist of eight companies for this week.

  • Visaka Industries Ltd. [2009, Rs 4.00, +33%] [2008, Rs 3.00]
  • ADF Foods Ltd. [2009, Rs 1.50 +50%] [2008, Rs 1.00]
  • Tilak Nagar Industries. [2009, Rs 2.50, +19%] [2008, Rs 2.10]
  • Keltech Energies Ltd. [2009, Rs 2.50, +100%] [2008, Rs 0.00]
  • J. K. Paper Ltd. [2009, Rs 1.75, +16%] [2008, Rs 1.50]
  • Joyti Structures Ltd. [2009, Rs 0.90, +12%] [2008, Rs 0.80]
  • Triton Valves Ltd. [2009, Rs 15.00, +20%] [2008, Rs 12.50]
  • ICI India [2009, Rs 16.00, +100%] [2008 Rs 8.00]


Below is the shortlist of companies that continue to keep their dividends flat (i.e. they have neither increased nor decreased compared to last year).

  • Everest Kanto Cylinder Ltd. [2009, Rs 1.20, flat] [2008, Rs 1.20]
  • Voltamp Transformers Ltd. [2009, Rs 12.50, flat] [2008, Rs 12.50]
  • Blue Star Ltd. [2009, Rs 7.00, flat] [2008, Rs 7.00]
  • Ajanta Pharma. [2009, Rs 2.50, flat] [2008, Rs 2.50]
  • Chambal Fertilizer. [2009, Rs 1.80, flat] [2008, Rs 1.80]
  • Zuari Industries. [2009, Rs 3.00, flat] [2008, Rs 3.00]
  • Diamines and Chemicals Ltd. [2009, Rs 1.00, flat] [2008, Rs 1.00]


Below is the list of companies that reduced their dividends. As a long term dividend (or income) investor, I would be concerned of these dividend cutters.

  • MRO Tek Ltd. [2009, Rs 1.00, -66%], [2008, Rs 3.00]
  • Bank of Maharashtra Ltd. [2009, Rs 1.50, -25%] [2008, Rs 2.00]
  • Oriental Hotels Ltd. [2009, Rs 9.00, -14%] [2008, Rs 10.50]
  • MM Forgings Ltd. [2009, Rs 1.50, -70%] [2008, Rs 5.00]
  • Ashok Leyland Ltd. [2009, Rs 1.00, -33%] [2008, Rs 1.50]


I will continue to provide similar updates every week. My end goal is to prepare a list of stocks that consistently grow dividends. We will see how this makes progress.


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