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...