Prospecting for New Opportunities Among Five Stocks. There is no point in being invested in an idea one is not excited about. We are in a stock market boom, all stocks are rising, so the recent better performance of a stock might be reflecting the general euphoria and thus have nothing to do with its fundamentals.
We decided to buy the stock of L G Balakrishnan & Bros (LGBB) when we first discussed the stock in April 2023. Its market price then - ₹745 per share - was at a significant discount to our estimated fair value of ₹1,257 per share. When we reviewed the stock again almost one year later, … Continue reading L G Balakrishnan & Bros: There is Still Value in the Stock
‘HOLD’ was our decision on Lincoln Pharma when we last reviewed the stock in February 2024 as the market price then (₹690 per share) was slightly higher than our estimated fair value. Major headwinds perceived then were the persistently slow pace of earnings growth, sluggish capital allocation, and mediocre working capital management. Now six months … Continue reading Lincoln Pharma: Despite Recent Gains Odds Seem Favourable
I was positive about Control Print when we last discussed it in February 2024 after its Dec. 2023 quarter results, however, I discouraged buying the stock due to its elevated price. The stock was trading at ₹968 per share then; it now trades at ₹800 per share – down 17.35 per cent in six months. … Continue reading Control Print: Earnings Slowdown a Major Headwind
In the midst of a stock market boom, PPAP Automotive stands out with poor financial performance. Its stock price has stagnated while its competitors have thrived. The company's costs have outpaced revenue growth, leading to declining profitability. Its capital allocation and cash flow are also concerning, indicating a bleak future. It is advisable to avoid investing in this stock.
The renowned investor Howard Marks, widely revered for his investment memos, was once asked about the reason behind his investment success. “An effective investment philosophy” was his answer. The answer made me curious about my investment philosophy. I worried about not having one. If I do have one, what is it? I do believe I … Continue reading Refining My Investment Philosophy: A Journey
Briefing The stock of Vishnu Chemicals has gained at an annual rate of 80 per cent over the last five years – from ₹22 per share in July 2019 to ₹418 per share now. Meanwhile, its net worth grew at an annual rate of 29 per cent*. After remaining unchanged during the five years of … Continue reading Vishnu Chemicals: Quality Stock, But Low Prospects
Despite a sombre financial performance in FY24, TCPL’s stock gained 43 per cent during the financial year. The valuation expanded to a PE of 19.55 and a PBV of 3.72. Normally, a stock’s price is expected to underperform during periods of declining operating profitability, unless the stock is undervalued. In other words, it is reasonable (and justified) for a stock to deliver superior returns even during periods of declining profitability if the stock was undervalued in the first place.
The purpose of the financial system is to support the ‘real’ economy by facilitating transactions, majorly through credit and money supply. But on certain occasions, the financial system would dissociate from its principal purpose and start functioning for its own sake – its expansion and survival. Unfortunately, the financial system gets seized by many ill effects if dissociated from its primary purpose. Precariously high asset prices, credit booms, capital misallocation, and financial fraud are a few of the ill effects.
This edition of our analysis, dated 19 June 2024, discusses the investment prospects of these stocks: Dynemic Products, RACL Geartech, and Kovai Medical Center.
AMN CAPITAL 