Good organisations have a healthy habit of stock taking. It is an annual procedure to check the status of a unit’s stores and equipment held on charge. Today I am planning to do a stock taking of my stock recommendations. In my earlier blogs I had recommended a few stocks. It has been almost seven months since my initial recommendations. For those of you who purchased these stocks, actually one should not be doing a stocktaking seven months down the line, I recommend/picked stocks for the long term and if you are checking the prices every day, then stocks are not your cup of tea. Please buy some real estate and live in peace. I am basically doing a stock taking to check whether we are into deep losses, if any and should we cut our losses if the fundamentals of the business have changed. My premise of buying a business is not that I should make money every time, but I should not lose money.The money making will happen as a corollary.
Noida Toll Bridge Company(NTBCL). Recommended at Rs 20, 22 and 23. Current Market Price is Rs 25. And a dividend of Rs0.50 per share announced but yet to be paid. The opening of the Taj Express Way from Noida to Agra is going to add to the revenues of NTBCL. The company is on course to become a debt free company and is going to distribute the profits to shareholders in larger portions in the times to come as it cannot reinvest the money.Recommendation–Hold.
Andhra Bank. Recommended at Rs100.Current Market Price is Rs 95. And a dividend of Rs5.50 per share also paid. The current yield is 6%. Whopping. The PSU bank pack is suffering from an NPA issue from lending to unscrupulous promoters of companies like KingFisher Airlines and lot of textile companies. But there is no downside in the stock from these prices. A yummy dividend payer. As good as an FD post tax. The EPS of the company is growing at a CAGR of 18%. I would further recommend buying this stock at sub Rs 95 levels.
Yes Bank. The stock was recommended at 270, 300 and 320. Current Market Price is Rs 370. And a dividend of Rs 4.00 per share also paid. The bank is a long term HDFC Bank in the making. Conservative in loans and agressive in seeking deposits. Ideal combo for a bank. One of the top 5 private banks. Hold.
Piramal HealthCare. Recommended at Rs 410,430,460. Current Market Price is Rs 535. And a dividend of Rs 17.50 per share also paid. Hold like a 10 year FDR. The new avatar of the company is Piramal Enterprise Ltd indicating it is going into businesses other than pharma also. Way 2 Go Mr Ajai Piramal.
National Peroxide. Recommended at Rs 375. Current Market Price of Rs 418. And a dividend paid Rs 12 per share.
HEG. Recommended at Rs 200 and below. Current price Rs 212. Dividend paid Rs5 per share. Q1 FY 13 profits are higher despite economy growing slower. FY13-14 will show the profits accrued due to the capacity expanded in FY11-12. The only issue was a forex exposure. With the dollar having settled at 55-56 to a rupee, the company should do good business. I still hold the view that this stock should become Rs 400 plus the moment the economy turns the corner. The company has been a consistent dividend payer and should pay Rs 10 again this year.
Axis Bank, GAIL, ONGC and ILF&S Investment Managers too , which were recommended, are all doing well and need to be held.
The effective appreciation is higher if the dividend received by the share holder is added to the current price. All in all, the stocks have not gone down. As Brad Pitt says in Money Ball to his Oakland Athletico baseball team owners, “I am not looking for wins, I am looking at not losing.” He could be talking about value investments. So, sleep easy readers. You are not losing. The economy has been going down a steep hill. Thanks to the macro environment. If Moody’s downgrades us as nation, foreign capital may flee. Stock markets may go down by 15-20% from present levels back to 14000 levels or even lower. Do not panic at that time. Be bold and buy good stocks again. If these very stocks are available cheaper add them more to your holdings. And if speculative reasons or liquidity in global markets takes the sensex to 19000, chill. But that I reserve for another time. Hasta La Vista.