Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Cigar butt – Microsec Financial Services @ 26 Rs

with 68 comments

I am sure you can do your own analysis. While the whole market is cheap with abundant opportunities, a section of investing community invests only in net-net stocks, hence I wanted to bring this to your light.

– At 26-27 Rs Microsec Financial Services offers safety of capital. Has over 200 intelligent employees with over 20%+ of them Chartered Accountants.
– Zero Debt
– Offers Loans against shares
– and Broking + Investment Banking Services, which have now dried up
– Intrinsic Value of Holdings, 120 per share, market value around 80-85 Rs per share
– Dividend paying
– Promoters increasing stake
– IPO’ed at 118 Rs few months back

Disclosure: Since I like to glide in more adventurous terrains, not invested.

Written by amitdipsite

November 28, 2011 at 11:13 pm

Posted in Uncategorized

68 Responses

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  1. Dear Amit

    Kindly enlighten us about your more adventurous terrains?🙂

    I really like your selection of stocks.

    Regards
    Vikram

    bb

    November 29, 2011 at 4:56 am

  2. Hi Amit,

    What about Intec Capital @35 ?

    Vinod

    iamvinod

    November 29, 2011 at 9:02 pm

  3. I have gone through couple of equity research reports posted on Company's website(http://www.microsec.in/static/EqtFundamental.aspx?id=1&Submenu=5). Good content & very well written indicating Company's focus on quality. However there Management looked overconfident to me. In the interview with CNBC, CEO Sharma said that Company will be able to maintain 62% operating margin. This doesn't look feasible to me. I don't know if he was only talking about near term future or on long term basis.

    Amol

    November 30, 2011 at 2:59 am

  4. probably at a market cap of close to 500cr, i would like to dabble in SKS …wouldnt that be more prudent…looking at the network they have, getting into differnt financial product would be easier and more rewarding for SKS…

    Ramit

    November 30, 2011 at 4:13 am

  5. Cravatex Ltd has informed BSE that the Company has successfully concluded negotiation to extend the Exclusive Distribution Agreement for products of Johnson Health Tech. Co. Ltd (Taiwan) till December 31, 2025 for India, Bangladesh and Sri Lanka.

    Expect few stores in Bangladesh..

    Jatin

    November 30, 2011 at 12:56 pm

  6. Good news..Johnson Fitness will be #1 soon worldwide, a good company thats on way to even big greatness. Johnson has Eight plus brands out of which Cravatex only sells 2 brands in India so far. So Cravatex should have no qualms on brand building and advertising.

    Enjoy the ride ! All three are principals are experiencing turnaround performance Dunlop, FILA and Johnson Health Tech. Cravatex only sells 25% of product line from all its principals so far.

    ————————————-

    I saw this article yesterday

    http://www.fitnesscelebritybrandingsummit.com/proline-fitness-equipment-india/

    Needs to be confirmed from Cravatex if it has got some licence from this company –> Worlds Biggest Martial Arts company:

    http://www.centurymartialarts.com

    Amit Arora

    November 30, 2011 at 8:18 pm

  7. Golf Market is still at nascent stage in India, less than 100 Crores INR, Cravatex does not sell Dunlop Golf equipment either with whom they already have master licence.

    http://www.dunlopsport.com/gb/golf_home

    Out of dozens of products from Dunlop only racquets and balls are sold so far.

    http://store.dunlopsport.com

    ———————————————–
    Old Crisil Report

    http://www.crisil.com/Ratings/RatingList/RatingDocs/cravatex_29dec10.htm

    Amit Arora

    December 2, 2011 at 6:58 am

  8. Intec Capital is fairly good at 34

    Amit Arora

    December 2, 2011 at 6:59 am

  9. cravatex is cheap or expensive now?

    ramya

    December 3, 2011 at 10:23 am

  10. Photoquip India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on December 02, 2011, inter alia, has discussed and approved the following:

    – Commencement of the business of manufacturing and dealing in electronic goods and devices, equipment, appliances and apparatus, subject to the approval of the members at the ensuing Annual General Meeting, as mentioned in Clause 51 of the Other Objects of the Memorandum o Association pursuant to Section 149(2A) of the Companies Act, 1956.

    will like to know more specific in this from you ??

    Appreciate in advance .

    Thanks
    Umang

    umang kumar

    December 6, 2011 at 6:14 am

  11. My quote : “A good investment is in a company that can rest on its laurels in a boring industry run by persistent managers”
    —————————————————

    Amit Arora

    December 7, 2011 at 5:38 am

  12. is cravatex still warrent a investment? or still wait?

    zulfiqar

    December 7, 2011 at 6:18 am

  13. I cannot answer for anyone else or force anyone to buy or sell a stock since loss will be yours. So, think over for yourself, serious money is involved.

    Amit Arora

    December 7, 2011 at 6:34 am

  14. what would u do if u were in my shoes?

    zulfiqar

    December 7, 2011 at 6:42 am

  15. That's exactly the point ! I don't know enough about your shoes or everyone's shoes. I can only say that I consider it a buy for myself as of today. My opinion can change in few months again.

    If I were in your shoes I'd give money to Mutual Funds.

    Amit Arora

    December 7, 2011 at 6:46 am

  16. India's Top 4 Problems according to me:

    #1 Corruption

    http://issuu.com/transparencyinternational/docs/ti_cpi2011_report_print?mode=window&pageNumber=1

    #2 Trade Deficit

    Use less oil
    Export More
    Discover alternate sources of energy

    #3 Attachment to unproductive asset like Gold

    #4 Fiscal Deficit

    Subsidy burden
    Lack of accountability
    ———————————————-
    Dream Solutions:

    Stop buying metal and stones, invest in industry

    Stop paying taxes, all investment in tax free zones or instruments like LTCG, suck the Govt. dry

    Make Govt. more accountable, Why can't we change MPs every Semester or Quarter via SMS/Internet Vote ala X Factor ? Surely MPs don't have more skills than singers and 70% India has mobile phones now, lets get on with the changing times !

    ——————————————–
    If one is not under the influence of mood enhancing substances one can SELL below high hope stocks masquerading as blue chips:

    – Lovable Lingerie
    – Trent
    – Talwalkars

    PS: Some of them have fallen by 50% and I have no vested interest and never had

    Amit Arora

    December 7, 2011 at 10:17 pm

  17. Hi Amit..

    I am shocked to know that you have a negative view on Talwalkers atleast @300cr Mcap.. I believe it has a long way to go.. Just Started its March… Taking the right steps by focusing on Tier 2 and Tier 3 cities along with Tier 1. With the growing Urban population and changing midsets of people,it should do pretty well in the long run. I mean especially in a country like India with more than 120cr population and talwalkers having the first mover advantage..I really don't see any negative aspects in it and it will be at mouthwatering levels if it goes down by 20-25% from here.

    I request you to elaborate for having a negative hindsight on Talwalkers.It should really help investors like us to know and learn better analysing and understanding of the Business model.

    sandeep maddali

    December 8, 2011 at 1:09 am

  18. Each and every company in India has target of 120 Crore population and 8% growth and demographics, so these things should not be discussed when analysing companies.

    My standards are very strict for companies over 20 time trailing multiple. There is no room for positive surprise. These stocks represent collective madness of crowds, there is no moat in Gym running business. Infact I feel that equipment manufacturers' natural progression is to start running their own gym. ICON FITNESS #1 in World has a gym business Gold's Gym. One could argue that Talwalkars may become acquisition target.

    Amit Arora

    December 8, 2011 at 2:20 am

  19. can u suggest me a good book on investing?

    zulfiqar

    December 9, 2011 at 6:04 am

  20. Hi there,

    For investing by oneself, one should start with 11th and 12th standard Accountancy Book for High School, few books on Warren Buffett by Robert Hagstrom, Snowball etc, One Up on Wall Street by Peter Lynch, Dandho Investor by Mohnish Pabrai, Margin of Safety by Seth Klarman, The Little Book That Beats the Market by Joel Greenblatt.

    PE, Book Value is not going to tell you much, then one has to understand each company and industry and predict future probabilities. I wish there was one book.

    Regards

    Amit Arora

    December 10, 2011 at 11:28 pm

  21. Thanks amit for your suggestions

    zulfiqar

    December 11, 2011 at 7:21 am

  22. Dear Amit

    I request you to write one book on stocks which can be understood by even Illiterates.I think the books you mentioned cannot be used to make money from Indian stocks from comman man.The book should explain every parameter/indicator like P/E re-rating,NPM,ROCE,MarketCap,why one should invest in stocks in India etc with real examples.Most of the retail investors always loose money in stock market and are scared of markets.I think there is no good or popular book available in India written by an Indian which can highlight basics to be followed/understood when investing in stocks.If you can initiate this project you can help lot of Indians from atleast loosing their hard earned money to FIIs.

    Thanks & Regards
    Manjunatha

    Manjunatha

    December 11, 2011 at 11:34 am

  23. Dear Manjunatha,

    Thanks for your confidence in me, there are actually a lot of books written for complete beginners, I see them in library all the time. Only translation with Indian examples is required. I can post the names of those books.

    Maybe one day I will, but not plans as yet.

    Kind Regards

    Amit Arora

    December 12, 2011 at 11:42 pm

  24. Food for thought:

    Buffett spends 1 day per year on compensation of CEOs of over 50 companies. Contrast this with one single company like Bank of America which spends millions on “deciding” compensation of Senior Level employees.

    Why is there no co-relation between CEO Salary and company performance ? Even though incentives have to be adequate.

    While being design conscious pays, Nike paid just 35 US $ for designing its logo in 1971 while British Petroleum paid 4.5 Million $. If you ask me 500$ is enough.

    Even CEOs need a course in capital allocation

    Amit Arora

    December 13, 2011 at 12:03 am

  25. Hello Amit,

    Other than what is being discussed here which of the follwing are good for moderate to aggressive portfolio:
    Page Ind, Eclerx, Kewal Kiran Clothing, Tata Motors, Tata Chemicals and BASF.

    Regards,
    Amar

    Amar

    December 14, 2011 at 3:43 pm

  26. Hi Amar,

    I consider Page Industries and Eclerx worth investing others I don't like or do not follow.

    Regards

    Amit

    Amit Arora

    December 14, 2011 at 8:29 pm

  27. Excellent learning on innovation from HBR video

    This on touches upon a Gillette product in India

    http://youtu.be/_yVlXRTMxpE

    Vijay Govindraj speaks on Innovation

    http://youtu.be/bQpNhZ1SndQ

    An Indian innovative product

    http://www.chotukool.in

    Amit Arora

    December 17, 2011 at 1:36 am

  28. Hawkins, TTK Prestige, Cravatex and most of companies get ZERO marks from me on online presence. An ex Cravatex employee is founder of this site which can exceed Cravatex's market cap:

    http://www.bestylish.com

    FILA on the contrary keeps innovating, after success of Skeletoes and Skeletoes 2.0, recently lauched Skeletoes Voltage

    http://www.amazon.com/Skele-toes-Voltage-Running-Silver-Chinese/dp/B0064NJ2R4

    Amit Arora

    December 17, 2011 at 5:47 am

  29. I am confused y Crav havn't brought Skeletoes yet to India ??? It can give them first mover advantage..

    Jatin

    December 17, 2011 at 6:21 am

  30. Not only Skeletoes but many other super hit products from FILA stable are not yet in India. This should be raised in next AGM. 80% products from FILA are not yet in India

    This is hit in USA now, still not in India

    http://twitter.com/filatoning

    Even Vibram Five Fingers are not available in India

    http://www.gobarefoot.in

    http://www.youtube.com/user/FilaToning

    Amit Arora

    December 17, 2011 at 8:23 am

  31. Real Worth of BSE Sensex is close to 12000 and no more, while some individual stocks are very cheap, SENSEX/NIFTY is still over priced, historically stocks paid 5% dividend yield, after all stock price is discounted future dividends and most companies meet fatal end with finite lives like Individuals. For long term investor 50 years of dividends is all the earnings from an investment.

    Stocks will reach dizzy heights, 1% dividend yield and yet again fall 90%, you can count on this pattern.

    Amit Arora

    December 19, 2011 at 9:49 am

  32. how did u arrive at 12000 sensex levels , mean to say what analysis did u use to arrive @12000..

    zulfiqar

    December 19, 2011 at 12:15 pm

  33. 1.5% NIFTY dividend yield vs 9% in FD, so stocks deserve de-rating

    with a dollop of

    Corruption
    Rag tag Govt.
    Trade Deficit
    Fiscal Deficit

    now India is expected to default in future on Balance of Payments

    Amit Arora

    December 20, 2011 at 7:57 am

  34. True India is doing its level best to become Greece in half the time to default……..

    zulfiqar

    December 20, 2011 at 10:33 am

  35. Hello Amit,

    What do you feel about Camlin Fine Science, Selan, Southern Petrochemicals (SPIC), Asahi Songwan and BEML. Can one allot 2% of one's portfolio in any of above stocks?

    SPIC has been recommended with a target price of 50 within 18 months. Sales are growing but company has >20% pledged shares which gives an eerie feeling about this counter. I have burnt my fingers with JHS before.

    Regards and Thanks

    Amar

    December 20, 2011 at 12:07 pm

  36. This time around the money is REAL in DOT COM universe

    By December 2012, I will hire an additional 1,000 people,” says Rohit Bansal, COO, Snapdeal. com

    Unfortunately none of them is listed like yebhi.com , myntra.com

    http://articles.economictimes.indiatimes.com/2011-12-20/news/30538049_1_online-retailers-rohit-bansal-avendus-capital

    Meanwhile other fundamentals unpropitious world over

    http://www.financialsense.com/contributors/chris-martenson/2011/12/21/the-risks-that-will-cause-a-global-currency-devaluation

    Amit Arora

    December 22, 2011 at 5:10 am

  37. Marc Faber interview from 23 Dec 2011:

    http://www.netcastdaily.com/broadcast/fsn2011-1223-1.mp3

    Amit Arora

    December 23, 2011 at 11:04 am

  38. i totally agree that e-commerce in india is an explosive growth phase…
    the cost benfit is obvious to brick and mortar shops.

    But sadly we have no opportunity to take part in these businesses.

    ABC

    December 23, 2011 at 11:17 am

  39. The only major disruption in this growth would be e-commerce and not FDI in retail. E-commerce has the potential to be disruptive for traditional retail. It is a platform that could be owned by anybody, with no need for any physical infrastructure. If we were to have this discussion three years from now, we won’t be talking about big versus small retail, because it would be online all over. For example, look at the UK market. Around 4,000 megastores were shut down in the past seven months due to competition from e-commerce in the UK.

    http://business-standard.com/india/news/qa-arvind-singhal-technopak-advisors/457954/

    Amit Arora

    December 23, 2011 at 8:27 pm

  40. Nobody with access to internet connection in world can complain today “I could not learn due to lack of funds”. All of MIT course material, video/audio and text is available online now for FREE

    http://ocw.mit.edu/help/get-started-with-ocw/

    Amit Arora

    December 24, 2011 at 12:00 am

  41. did u have a look at ET fastest growing small cos. list ?

    ABC

    December 24, 2011 at 11:30 am

  42. hi amit,
    the link u have mentioned is for 2010, they published a new list last month.

    I couldn't get my hands on the complete list.

    ABC

    December 25, 2011 at 8:59 am

  43. Are you speaking about ET 500 ? see below

    http://economictimes.indiatimes.com/et500list.cms

    Amit Arora

    December 25, 2011 at 9:58 pm

  44. Amit Arora

    December 25, 2011 at 10:20 pm

  45. Hello Amit,

    Pls. tell some names of companies that can be bought from 5 year perspective, and will give 10 times return

    Anmol

    ads

    December 26, 2011 at 7:09 am

  46. yes…i am talking about the latter one
    i.e.http://articles.economictimes.indiatimes.com/2011-10-31/news/30342108_1_growth-stories-list-companies

    …i tried but still couldn't find the complete list…thoughts/disscusions would be appreciated sir.

    ABC

    December 26, 2011 at 9:05 am

  47. Dear ABC

    From that list #4 MAYUR UNIQUOTERS, #8 ECLERX, #12 TECHNOFAB and #16 PAGE look good at today's price and tomorrows prospects for next 2 years. Somehow they are divisible by 4 but that was a mere coincidence.

    All the best

    Amit Arora

    December 26, 2011 at 10:24 am

  48. Flipkart aims for 10-fold growth in revenue in FY12

    “In terms of revenue, we are looking at Rs 500 crore to Rs 600 crore in the current financial year.” The company had clocked a revenue of Rs 50 crore in 2010-11.

    It is hoping to hit a revenue figure of $1 billion (Rs 5,000 crore) in the next two to three years, much ahead of the company’s 2015 target.

    http://business-standard.com/india/news/flipkart-aims-for-10-fold-growth-in-revenue-in-fy12/459851/

    So, how can one benefit? By second degree connection, products that can now sell online which have hitherto not as wide distribution network can take advantage of online medium

    http://www.20north.com
    http://www.yebhi.com
    http://www.seventymm.com
    http://www.naaptol.com
    http://www.myntra.com
    http://www.bestylish.com
    http://www.flipkart.com
    http://www.letsbuy.com
    http://www.snapdeal.com

    Amit Arora

    December 27, 2011 at 6:49 am

  49. Finally found FILA Skeletoes for sale in India, price is quite high Rs 5500

    http://20north.com/product/fila-mens-skele-toes-2-0-running-shoe-dazzling-blue-windchime-sun/1/42303035505554475357

    Amit Arora

    December 27, 2011 at 6:57 am

  50. That is quite pricey, but shoes looks very good

    zulfiqar

    December 27, 2011 at 10:39 am

  51. hi amit,
    phones, books are two categories where i have personally crosschecked and also heard from other people about high prices on flipkart as compared to other online sellers.

    shouldn't we take the revenue targets with a pinch of salt?

    ABC

    December 27, 2011 at 10:50 am

  52. http://www.indiabookstore.net

    try this website,compares the results from various online book sellers.

    ABC

    December 27, 2011 at 11:00 am

  53. What is your view about Vaarad Ventures Ltd (http://www.vaarad.com/Portfolio.aspx) ? They have website http://www.atcomaart.com/ which has around 41000 products .
    Management is doing too much diversification . Looks quite expensive at current price .

    Mahendra

    December 27, 2011 at 2:03 pm

  54. http://articles.economictimes.indiatimes.com/2011-12-25/news/30554958_1_snapdeal-rohit-bansal-internet-users

    In between the lines,the article tells about negatives related to e-commerce

    ABC

    December 27, 2011 at 5:32 pm

  55. Hi Amit,

    I have been following your blog almost twice a week for it posts/comments and have been learning quite few things. Thanks for sharing the wisdom and keep up the good work.

    A quick trivial question regarding Cravatex:
    I think, though being a Marwadi, that organized retail is inveitable, and is the way to go.

    How will organized retail affect Cravatex? Will the local and foreign organized retail still source the products from Cravatex or would they source it from a better source ( manufacturer, etc ).

    Please share your thoughts.

    thanks

    Stock Investor

    December 27, 2011 at 5:54 pm

  56. Hi Amit,

    With storage/online sales going to pick up, I find the logistic sector pretty interesting. I see quite few companies with between 400cr-1500cr market cap, low debt and with the ablility to maintain the profits/assets given a slowdown in economy.

    Do you have a view on this sector?

    Take a look at this,
    http://www.scribd.com/doc/54256044/PWC-Logistics-Industry-in-India

    thanks

    Stock Investor

    December 27, 2011 at 6:23 pm

  57. Hi ABC,

    I found Flipkart.com does not have cheapest books but 2-5% more expensive than other stores. Needless to say only 3-4 players will survive, 90% will perish. Flipkart.com has good chance in being top three without looking at financials

    Mahendra,

    SELL Varaad Ventures immediately if you are holding even at a huge loss, company is over reaching and not worth even 100 crores let alone 1000 Crores. None of their online ventures will succeed.

    Stock Investor,

    Nobody can sell FILA in India, Pakistan, Srilanka and Bangladesh online or through traditional shop without going through CRAVATEX, licence is exclusively given to them. We do find vendors selling branded products on ebay.in after buying from manufacturers but its illegal. Out of all above websites only one (www.20north.com) was selling products in India without sourcing them through Cravatex Ltd and I have reported it to the company.

    Regards

    Amit Arora

    December 27, 2011 at 11:24 pm

  58. Hi Amit,

    With storage/online sales going to pick up, I find the logistic sector pretty interesting. I see quite few companies with between 400cr-1500cr market cap, low debt and with the ablility to maintain the profits/assets given a slowdown in economy.

    Do you have a view on this sector?

    Take a look at this,
    http://www.scribd.com/doc/54256044/PWC-Logistics-Industry-in-India

    thanks

    Stock Investor

    December 29, 2011 at 3:57 am

  59. Hi Amit,

    2012 will see highest no. of drugs going off patent.
    http://www.slideshare.net/Zash/2012medicalcosttrendspdf

    any cheap bets in pharma ?

    Jatin

    December 31, 2011 at 7:30 am

  60. Hi Amit..

    Have you had a look at KDDL. It seems to be a good pick for long-term holding. Would be glad if you check and analyse the company's potential and outlook

    sandeep maddali

    January 2, 2012 at 1:37 am

  61. Seems like most of it is looking cheap..will it get cheaper?

    Stock Investor

    January 2, 2012 at 2:41 am

  62. Hi Guys,

    I do not like anything in Logistics, Blue Dart is OK but has no interest to serve minority/delist/conflict of DHL businesses.

    I would look for PORTS but they have huge CAPEX as has ARSHIYA

    Also, I do not follow pharma space. An ultra micro cap is SAMRAT PHARMACHEM but they are unlikely to repeat performance in Q2. They earned 15 Rs EPS in first half of this year due to cyclical turnaround of Iodine!

    Amit Arora

    January 2, 2012 at 8:33 am

  63. Microsec's financials looks bad on closer scrutiny…For a company which has 85 crore in Mkt Cap..it has given loans to its related company for an amount of 80 crore (refer audit report). This does not sound good.

    Moreover the market value of quoted investments is hardly 15 odd crores. The balance investment is in unlisted related entities where real valuation number is hard to get (on balance sheet it will always be quoted at cost – and no auditor ever reduces the value)

    http://goldensilt.blogspot.com

    Ashwini Damani

    January 20, 2012 at 5:39 am


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