tag:blogger.com,1999:blog-7004453.post2332112239860249004..comments2023-09-02T19:53:06.144+05:30Comments on Understanding and applying value investing principles: One stock, three viewpointsRohit Chauhanhttp://www.blogger.com/profile/00356455735241398199noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-7004453.post-8535590309636203712012-10-10T18:02:46.521+05:302012-10-10T18:02:46.521+05:30No, it does not look like a value trap. The bigges...No, it does not look like a value trap. The biggest advantage in this case is the healthy cash flow generation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7004453.post-82743100215991804762012-01-22T05:43:20.802+05:302012-01-22T05:43:20.802+05:30Hi manish
NESCO can become a borosil in 5+ year, b...Hi manish<br />NESCO can become a borosil in 5+ year, but we dont know that yet<br /><br />i have invested in such companies in a small way in the past ..cash bargains which were value traps<br /><br />i dont think nesco is a value trap yet. to call it that now even as it is investing its capital at high rates of return is to declare a suspect guilty without any evidence<br /><br />it may turn out ..but there is no evidence to support that argument as yet<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-71588848872116083052012-01-22T05:40:51.246+05:302012-01-22T05:40:51.246+05:30Hi indrajeet
have not read on anant raj industrie...Hi indrajeet <br />have not read on anant raj industries. what is the story behind it ?<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-19987409595133422622012-01-22T05:39:08.913+05:302012-01-22T05:39:08.913+05:30hi dhwanil
agree with you ..this company does not ...hi dhwanil<br />agree with you ..this company does not have a 10yr visibility like an ITC or GAIL or nestle where you the nature of business is likely to be the same as now<br /><br />at the same time a 3-4 year bet is not a short term bet either and we can see value created in this period too<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-45484298332601612262012-01-16T06:46:32.034+05:302012-01-16T06:46:32.034+05:30Hi Rohit,
Nice Analysis...
This reminds me of th...Hi Rohit,<br /><br />Nice Analysis...<br /><br />This reminds me of the borosil glass story.<br /><br />Company sold its land and is having net cash of @ Rs. 700 Cr.<br />Company,s Total market capitalization @ 350 Cr.<br /><br />Classical Value case of buying $1 for 50 cents.<br /><br />Management announced share buyback ( Still going on) <br /><br />Market cap still remains sub 350 Cr.<br /><br />Retail investor don,t have any option but to sell as company neither gives out money as dividend but thinks itself as Buffett II invests in share/MF and plans to delist company after completing buyback.<br /> <br />Classic Value Trap... <br /><br />Market values most of the holding companies at 50% of asset value since company do,t plan to monetize assets, retail investor don,t have any say on how assets should be used...Anonymoushttps://www.blogger.com/profile/16770104782822569657noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-64802344201351515902012-01-15T16:56:34.846+05:302012-01-15T16:56:34.846+05:30Hi Rohit
For last few months I have been followin...Hi Rohit<br /><br />For last few months I have been following Anant Raj Industries in my comments. It is very much similar to that idea. Maybe someone in Delhi will better appreciate this. I believe it is highly undervalued with good management<br /><br />Regards<br /><br />Indrajeet SinghIndrajeet Singhhttps://www.blogger.com/profile/07420468038931177819noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-34371407100365971272012-01-12T19:01:16.416+05:302012-01-12T19:01:16.416+05:30Hi Rohit,
I agree that convention center located...Hi Rohit, <br /><br />I agree that convention center located in the center of a city like Mumbai definitely gives "moat" for the company, however, I wanted to allude to the fact that running convention center does not seem to be the "core business" of the company as there are much better and professionally developed and managed convention centers in other parts of the country. <br /><br />With regards to the visibility, if someone like me who wants to invest in a company for 10 years, I would like to see that company is involved in a business that will have sustained earnings with reasonable growth for investment horizon. In my view, in case of NESCO, company's revenue generation largely depends upon monetization potential of assets (land bank) and hence may be a good case for asset play.Dhwanilhttps://www.blogger.com/profile/02537043667425952923noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-62770202315107922492012-01-12T01:58:35.375+05:302012-01-12T01:58:35.375+05:30Hi dhwanil
the convention centre maybe average ..b...Hi dhwanil<br />the convention centre maybe average ..but it is quite profitable for the company. the issue is that the alternatives are even worse<br />I am from mumbai and have lived here for 25+ yrs. local trains are not good ...but if you have travel from borivali to churchgate ..whats the other option ?<br /><br />on long term outlook ...we have visibility for 4-5 yrs. true we dont know after that , but then in my case thats true for most companies i hold. how many companies can one have visibility beyond 5-6 yrs ? <br /><br />in 5+ yrs the market dynamics change, competition changes ..and so even if you think there is visibility ..its just a gut feel<br /><br />anyway i am biased to the stock ..so bound to make +ve arguments<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-57253800999305100402012-01-12T01:54:46.626+05:302012-01-12T01:54:46.626+05:30Hi ashwini
the stock is priced on the assumption t...Hi ashwini<br />the stock is priced on the assumption that the company will not grow, the management will sit on the cash and do nothing with the excess land.<br />due to the low dividend everyone fears that they will siphon the cash. I am able to understand that fear - management has not done anything to show that they are dishonest. on the contrary they allocating capital to high IRR projects.<br /><br />so even if the realestate slows down, the company should do fine<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-76889640697772405922012-01-12T01:52:30.055+05:302012-01-12T01:52:30.055+05:30Hi ananth
the realty group is basically the IT bui...Hi ananth<br />the realty group is basically the IT buildings and possibly hotels when they come up. I am not sure if i understand your concerns on this classification<br /><br />On the point of siphoning off the cash ..that risk is there in all companies ..nesco is not unique. when you invest in a stock, you trust the management to be fair to you. at the same time, i have not seen any actions on the part of the management to siphon off cash for last 10 yrs. on the contrary they have taken lesser compensation than they can<br /><br />so in absence of any such action, do you declare them guilty ?<br /><br />in terms of maintenance cost ..they have to upgrade and maintain the convention centre which is generally more than a usual structure<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-135874697248872392012-01-12T01:47:29.580+05:302012-01-12T01:47:29.580+05:30Hi anon
I think splitting stock is generally a gim...Hi anon<br />I think splitting stock is generally a gimmick and i would really not care for it. Its like cutting a pizza into 12 instead of 6 pieces. the size of the pizza is the same ...only more pieces<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-87019425398039725352012-01-09T13:58:21.361+05:302012-01-09T13:58:21.361+05:30Hi Rohit,
A very interesting concept where same ...Hi Rohit, <br /><br />A very interesting concept where same stock is reviewed by three different value investors. <br /><br />My take on NESCO is that it can be considered as pure asset play considering the fact that major revenue for NESCO is derived from convention center and IT park lease (which is incidental for NESCO) while actually real estate is not core business for NESCO. Hence lack of clarity on long term sustainable business model is a key dampner. Moreover, I have been to BEC 3 times and have visited many other convetion center in India, my opinion on BEC is that it is just about average in terms of infrastructure and amenities. Hence, the only real plus for the company is land bank.Dhwanilhttps://www.blogger.com/profile/02537043667425952923noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-66158115532851219732012-01-09T12:31:11.165+05:302012-01-09T12:31:11.165+05:30Another good post. Since I stay close to the NEC e...Another good post. Since I stay close to the NEC exhibition centre, I know just how famous and useful this centre is. It is a huge parcel of land, and at the most opportune place in Mumbai. <br /><br />Most of the top corporates are building their satellite office around the NEC (offices of E&Y, Oracle, TCS, JM Financials etc ) are quite nearby. Their plan of building IT Office augurs well to me.<br /><br />Plus the realty market of the suburban mumbai is unlikely to slowdon especially in the areas of Andheri to Goregaon which will always be in demand with the Mumbai Middleclass<br /><br />Have started nibbling into the stock<br /><br />Regards<br />Ashwini<br />http://goldensilt.blogspot.comAshwini Damanihttps://www.blogger.com/profile/06779192196103485759noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-77203317172875973262012-01-09T09:26:28.674+05:302012-01-09T09:26:28.674+05:30Even I saw the point above. Add to that they annou...Even I saw the point above. Add to that they announced the stock split just before very good Q3 results which had one time license fee (component) which was not present in normal quarterly results sent to exchanges. I had to get hold of a motilal oswal report to get this information. <br />Also, I do not like in FY12 they started clubbing some revenues together (from IT park and realty part) in the quarterly results. They may use this to siphon off cash from IT park especially in FY12 their new buildings will start contributing to revenues handsomely. I don't understand where they are doing realty business either.<br />Also, a couple of years back they spent lot of money on maintenance of their buildings. We need to understand what is the cost of maintaining these buildings etc.<br /><br />Regards,<br />AnanthAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7004453.post-88364418490914551412012-01-08T17:26:26.512+05:302012-01-08T17:26:26.512+05:30I went through last few months' news items. On...I went through last few months' news items. On Nov 11, they canceled the plan to split face value of share from Rs 10 to Rs 1. Although there is no material benefit out of splits, I am not able tyo understand why they first decided to go for it and later canceled it. Do they have any internal conflicts?Anonymousnoreply@blogger.com