I don't generally make trading calls, but this one looks like it. Nifty should be in free fall mode on 30-Jan.
This is possibly the worst that the world might have seen since 1929 and central banks around the world are trying to keep it that way, trying hard that it does not eclipse 1929 :-|, worrying times.
Some new snippets of parts of world in worst recession since 1929
http://www.bloomberg.com/apps/news?pid=20601087&sid=arLSvyBheETQ&refer=home [Japan]
http://news.scotsman.com/latestnews/Scottish---recession-.4924413.jp [UK]
http://news.bbc.co.uk/1/hi/world/europe/7726218.stm [Germany]
http://news.aol.co.uk/world-news/french-economy-enters-recession/article/20081003094554192310380 [France]
http://www.forbes.com/feeds/ap/2009/01/28/ap5977460.html [Spain]
So much for the bad news, the reason for the trading call is the screeching halt to the false relief rally stroked in the last 3 days. Began with US, Japan. should see impact in India today.
Well....
Thursday, January 29, 2009
Monday, January 26, 2009
AFTEK
Trying to check if the story of keeping cash out of term deposits is widespread.
AFTEK (NSE Code AFTEK) caught my attention.
The stock has hit a 52-week high of 72.80 and is currently closer to its 52-week low of 8.45. So what?
Times are recessionary, going is tough for mid-caps.
Here are my reasons[Data as of March'08 from www.moneycontrol.com :
1) Company has investments of 116.22 crores
2) Cash and bank balance of 299.52 crores
3) FD's of 40.31 crores
4) Debt of 79.17 crores
My questions are:
a) Why does the company need to keep around 300 crores in cash and bank balance, with only 40 crores in FD's?
b)March '08 EPS > Stock price, so effectively PE<1, what is the market discounting?
c) If I just value the cash /share ( March '08 has 9.3486 crore shares in issue), then cash per share > 30, but share price is only 8.
d) Inspite of such attractive valuations, no mutual fund investment in this stock in last 6 months (as per moneycontrol)
e) Promoter holding is just around 16-17%, why is there no attempt at an hostile takeover, whereas the cash/share itself is > share price + 100% premium.
Is something wrong with AFTEK's book or my understanding of their financial statements or is it just the SATYAM scare??javascript:void(0)? Time will tell...
My advice,
IF you are a very high risk investor, consider investing/shorting based on your reading of what could be the plausible cause.
If you are a moderate/low risk profile, avoid big-time...
AFTEK (NSE Code AFTEK) caught my attention.
The stock has hit a 52-week high of 72.80 and is currently closer to its 52-week low of 8.45. So what?
Times are recessionary, going is tough for mid-caps.
Here are my reasons[Data as of March'08 from www.moneycontrol.com :
1) Company has investments of 116.22 crores
2) Cash and bank balance of 299.52 crores
3) FD's of 40.31 crores
4) Debt of 79.17 crores
My questions are:
a) Why does the company need to keep around 300 crores in cash and bank balance, with only 40 crores in FD's?
b)March '08 EPS > Stock price, so effectively PE<1, what is the market discounting?
c) If I just value the cash /share ( March '08 has 9.3486 crore shares in issue), then cash per share > 30, but share price is only 8.
d) Inspite of such attractive valuations, no mutual fund investment in this stock in last 6 months (as per moneycontrol)
e) Promoter holding is just around 16-17%, why is there no attempt at an hostile takeover, whereas the cash/share itself is > share price + 100% premium.
Is something wrong with AFTEK's book or my understanding of their financial statements or is it just the SATYAM scare??javascript:void(0)? Time will tell...
My advice,
IF you are a very high risk investor, consider investing/shorting based on your reading of what could be the plausible cause.
If you are a moderate/low risk profile, avoid big-time...
Saturday, January 24, 2009
SATYAM saga
Ironic name for a company mired in financial fraud allegations, but the focus here is more on the inadequacy of some other organizations:
1. NASSCOM:
Supposedly the flag bearer of the Indian IT industry, and cannot protect a single member from losing its clients or employees. NASSCOM probably came out the weakest link in the saga. Acting just like the UN during international conflicts, but I would have expected NASSCOM to come out with
a) An actionable plan to salvage the firm
b) Strict NO on all members to poach clients (including projects of Satyam in clients where other members have incumbency)
c) Strict NO to poach Satyam employees
d) Provision of finance to cover Satyam's immediate expense
e) Strategic Administration at Board level and Operational Leadership so that business stays with Satyam
f) Aggressive pitch for Satyam with Global media, given that firm has value for clients, and its only the promoter that has misbehaved
Of course, NASSCOM did none of these, but kept issuing appeals. Maybe its just meant to host lunches, hold federation type talks and keep issuing public appeals. Thanks NASSCOM for clarifying your role.
2. ICAI:
Did'nt suspend PwC right away, Didn't suspend the participating partners pending a survey. Instead, came out with a statement that PwC is not liable if found guilty, the partners maybe.
Link here: http://www.cainindia.org/news/1_2009/action_against_partners_not_audit_firm_says_icai.html
My simple response to this with all due regards to the m(%&£$f%cking decorum is WTF!!!. This is as outrageous as anything I have heard/seen so far.
Were these guys signing in their own capacity or as PWC partners? For God's sake, either act and act assertively or confess that you are imbecile, incapable of action and will positively do everything to save the biggest names and successively reduce the net so that the smallest fish is caught.
BTW, how about issuing a statement that since the partners only signed the statement but did not conduct the audit, those who *actually* conducted the audit will be punished, and if research shows that the audit was never conducted, everyone can go back to their work as usual
3. Indian IT companies
I will reserve this for now, because this is not exactly the forum to use the expletives I'd want to.
But very simply put, toothless, shameless, spineless response by Indian IT companies. For every other company in the segment, its a clear signal that: 'if things go wrong with you, screw NASSCOM, screw the spirit of healthy competition. We are out there to screw you.'
I have a much larger list than this compilation ranging from Indian Government to AP Government to other regulating agencies and organization. But in terms of sins committed, I think these 3 overshadow Raju's sins.
1. NASSCOM:
Supposedly the flag bearer of the Indian IT industry, and cannot protect a single member from losing its clients or employees. NASSCOM probably came out the weakest link in the saga. Acting just like the UN during international conflicts, but I would have expected NASSCOM to come out with
a) An actionable plan to salvage the firm
b) Strict NO on all members to poach clients (including projects of Satyam in clients where other members have incumbency)
c) Strict NO to poach Satyam employees
d) Provision of finance to cover Satyam's immediate expense
e) Strategic Administration at Board level and Operational Leadership so that business stays with Satyam
f) Aggressive pitch for Satyam with Global media, given that firm has value for clients, and its only the promoter that has misbehaved
Of course, NASSCOM did none of these, but kept issuing appeals. Maybe its just meant to host lunches, hold federation type talks and keep issuing public appeals. Thanks NASSCOM for clarifying your role.
2. ICAI:
Did'nt suspend PwC right away, Didn't suspend the participating partners pending a survey. Instead, came out with a statement that PwC is not liable if found guilty, the partners maybe.
Link here: http://www.cainindia.org/news/1_2009/action_against_partners_not_audit_firm_says_icai.html
My simple response to this with all due regards to the m(%&£$f%cking decorum is WTF!!!. This is as outrageous as anything I have heard/seen so far.
Were these guys signing in their own capacity or as PWC partners? For God's sake, either act and act assertively or confess that you are imbecile, incapable of action and will positively do everything to save the biggest names and successively reduce the net so that the smallest fish is caught.
BTW, how about issuing a statement that since the partners only signed the statement but did not conduct the audit, those who *actually* conducted the audit will be punished, and if research shows that the audit was never conducted, everyone can go back to their work as usual
3. Indian IT companies
I will reserve this for now, because this is not exactly the forum to use the expletives I'd want to.
But very simply put, toothless, shameless, spineless response by Indian IT companies. For every other company in the segment, its a clear signal that: 'if things go wrong with you, screw NASSCOM, screw the spirit of healthy competition. We are out there to screw you.'
I have a much larger list than this compilation ranging from Indian Government to AP Government to other regulating agencies and organization. But in terms of sins committed, I think these 3 overshadow Raju's sins.
Back in busines :)
My apologies for being away from my blog for a long, long time. Settling in a new country, and more importantly getting connectivity and time to post did take some effort and time to come.
Will try to be more frequent from now on. Following immediately with the hot topics, Global Economics, Promoter manipulation in Satyam? :)
Will try to be more frequent from now on. Following immediately with the hot topics, Global Economics, Promoter manipulation in Satyam? :)
Subscribe to:
Posts (Atom)