One tweet by Amit Mantri and the stock hits LC. Looks like people have stopped using their own brains. The price manipulation took place nearly 15 years ago in 2003. Also SEBI fined some market operators, not the company management. Company performance has been excellent with all debt paid off to become debt free. Cash flows are great too.
Power of social media!
A recent (Nov 29, 2017) report by Ambit Capital Pvt. Ltd. on Bhansali Polymers absolves BEPL of any wrongdoings on its page 36ā¦
I feel, the negative impact created due to this tweet will not last long, especially since Ambit has been extremely positive about BEPL in its recent research report and its āfanaticā promoter. Their report was specifically mentioning that, in all their channel checks, they have received very good feedback on the promoters
Yes I have read this Ambit story and its a hope story more than anything else. While I like the sector, the expectations embedded in current prices are way too much for any new entrants to make moneyā¦ This will tank 30-40% easily if growth is anything less than 75-100%.
Nov '17 Auto numbers are excellent that is good for Bhansaliā¦
Why was this company trading at around Rs.25 till March? What really changed since then? If someone can shed some light on this, we can decide whether this vertical rise is a bubble, manipulation or genuine re-rating.
Also, the simplistic comparison of 10x price movement then and now is so devoid of context:
Happened more than 2 occasions, you can see the chart below. No matter what such price movements are not so comforting for many people.
Honorable members of VPā¦
I became interested in BEPL during 2010 and made a small profit during that rise. But the unique nature of the business stuck to my mind and I kept it under my focus. During the beginning of 2016, I found a sharp rise of volumes on BEPL counter that forced me to look at the things with renewed interest. Thereafter during November '16, I decided to invest. Immediately after that the price and the volume declined. Q3 of FY 17 was disappointing, but I decided to wait for one more quarter. Then the rise started in March '17. As we can see the chart, the rise is supported by exceptionally high volumes. That makes it less likely to be bubble or manipulation. I have been carefully looking at the delivery volumes that have been consistently high during this rise. In view of this my humble opinion is that it is more likely to be a genuine rerating, although there may be different opinions.
I will like to draw the attention of the members that the delivery volume today was nearly 70 percent on NSE, and more than 14 lack shares changed hands. That is roughly 1 percent of the total equity. This shows that BEPL might be evoking genuine interest even now.
I always welcome contra views because that is in my interest and for the safety of my money. Please give your arguments in favor of this being a bubble or manipulation.
Just saying, it would be better to look for disconfirming evidence in the pattern you are suggesting. That is to look for similar price & delivery volume action in stocks which were rigged in the past, if you find similar patterns in Satyam, Himachal futuristic, opto circuits, etc. we can deduct with surety that the pattern you are looking for reveals absolutely nothing about āgenuine interestā, āgenuine reratingā.
Hi Abhinav
Thanks for your cautionary words. I will tend to agree with you, but we as investors have to play the game of what is less likely and what is more likely. You have come up with examples that we should keep in mind. If Bhansali is cooking up its books like Satyam, my investment is doomed. If it has huge receivables like Opto, again it is the same thing. But we are always wiser by hindsight. I want the knowledgeable members to come up with foresight. Why should we call BEPL story a bubble? Opto, Satyam, and Himachal were different and unique. Which one of these has a resemblance with BPEL and in what way?
The argument that I have given cannot be considered a perfect argument. It is only one of the arguments that can be extended. And every argument will have a counter-argument. It would be really helpful, if you give your own argument rather than countering my argument. I will be looking for some genuine foresight from you.
I would put a lot of faith in the research report of a respectable
professional agency like Ambit and also positive reports of moneycontrol
and Money Life magazine than a stray half baked/ half truth tweet of an
excited young gentleman who has only recently entered the field of
investing. However, the tweet has done some very good stuff - it has
removed the froth and also those investors who have little understanding of
stocks/business.
The correction is certainly very good.
In long term - stock price always follow genuine business growth. Let us
keep a close watch on the genuineness of financial numbers every quarter.
We were discussing one parameter which you were looking at to decide this is a genuine story. I just asked you to extend your sample before arriving at a conclusion.
Instead of using the same parameter we were talking about to find disconfirming evidence, you start comparing individual stories and their hindsight faults.
I never asked to compare them on other parameters.
Furthermore, since you are not interested in improving your argument which was my intention, lets end this here.
My suggestion was more methodology related rather than BEP related.
As for foresight, I doubt even if I would have it, I would know beforehand that it is genuine as you require. Human biases and limitations ensures we are not soothsayers.
@yudiagg I politely disagree. The person who tweeted has stellar credentials and significant experience in equity investments. It wouldnāt be prudent to disregard his observations. After all, past has been, many a time, a great indicator of whatās in the offing. I havenāt experienced a bear run yet but in this bull run several acquaintances of mine lowered their guards and lowered their evaluation parameters which finally led to losses.
Dear Abhi
No offence taken or intended. Please extend your argument that price volume action in BEPL could be similar to Satyam, Opto, or HFCL. It is possible, and there would be hundreds of companies with similar price volume actions. Such action has to be backed by other parameters to make a worthy investment decision. I simply want you to find fault with other parameters such as balance sheet, competitiveness, promoters background etcā¦ If there are other companies with price volume action similar to BEPL, the investment decision will be based on these other parameters.
One more pointā¦ I made the decision when the price was only 25. Now it is close to 200. One has to be more cautious now. This makes your view important. From 180 the price may go down to 150 or even lower. That is not my worry, as long as I am able to get out of it with some reasonable profits. I will not advice small investors like me to enter at this level. However, those who are already invested from the lower levels will be helped if some stark weaknesses or wrongdoings are exposed at this stage. I hope that you are following my meaning. A pro like you can really be helpful in such a situation. Please continue your interest in this thread.
Sir ji, do not take my words as rude, but I am neither a pro nor interested in this company to provide a view on its health. There are 1000s of ways to make money in the markets. This just doesnāt fit my process.
I saw a small sampling flaw and was trying to correct it. The examples I mentioned were just what came to my mind to compare what maybe false negatives with what maybe your false positive.
You have corrected your theory by adding that other parameters should also be looked at. Though I am inclined to say that we may find disconfirming evidence of price volume action implying genuinity in investor interest in quality names as well.
After I found increase in volume, it took me more than nine months to make the investment decision. Please read my post again. The decision or my theory was not based on price volume action alone. So I have not corrected my theory in the least. As you have admitted that you are not genuinely interested in the company. Please understand Abhinav Ji that this is not an academic forum, where you will talk about sample size and other statistical jargon. We are here to help each other in making decisions. I still hope that you will find some time for this thread.
As an investor, only believe in data and not in someoneās tweet. In this sector, no body is saint including BEPL promoter or that guy who posted it.
With such a good Auto Sales numbers, one can expect a good number of BEPL. Remember these auto sales are numbers, that reflect dispatch from factories. So just believe in data and always keep margin of safety
Disc Significant position in BEPL
There are plenty of newcomers in the market who do not understand data and therefore tweets are their major guiding force to invest their hard earned money!
