One of the things i do is look at the AR and find out the market share of the company if they have mentioned it. Sometimes con calls also mention it. If you know the market share and sales of a company its easy to calculate the rough size of opportunity. If you do this for competitors in the same sector then you get a further sense.
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Thanks @bheeshma. It is quite practical method that you mentioned. One follow up question - when we say opportunity size is it the rough size as of now or does it include future potential as well?
What is RoC , is it same to ROE .
One more question I want to ask , say a company has row of 15 and roce of 35 . Interest outflow is 15% ( which is arrived by interest expense/total debt) can we say company is generating 5% additional revenue after expensing the interest cost and thus it is doing good and can we invest in such a company .
How do you arrive at a decision about liquidity of a stock…Is thier some minimum volume quantity you look for daily…for example 10000 shares trading per day or any other criteria ? How will you get to know that a stock is highly liquid so that it can be Buy/Sell easily at optimum prices.
Thanks in Advance.
Basically, liquidity is subjective. It depends on the buyer and seller. Lets say if you want to buy 100 shares of a company, you would want to see if the stock trades a multiple of that 100 every day, say 10,000 shares on average every day. That means you will be able to sell/buy easily. Now, for a big investor who wants to buy 10,000 shares of teh same company, he may look to see if a few lakh shares are traded everyday.
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I look at Bid-Ask spread and impact cost as the best indicators of liquidity. Bid-Ask spread should be less than 1% and impact cost should be less than 1% as well. That’s just my criteria. Larger investors generally require lower spreads and costs.
Having said that, I do not necessarily reject a company just because liquidity is low but I add a liquidity risk premium to my valuation model.
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I wanted to understand this with respect to intraday trades and derivatives. I read in a book that for intra day trading , one should go to highly liquid stocks , as you have to close the position before end of the day. So if I want to select few stocks to trade in intraday , how could I make sure a particular stock is a liquid one and I would be able to buy/sell efficiently. The news and decision may be correct but if the stock is not highly liquid it may led to the losses (More losses if trading on leverage)
So in case I want to Long/Short in intraday/Derivative , how could be m sure that It would be easier for me to close the position.
Thanks Yogesh and Abhishek for your inputs.
Can anyone explain how investment in warrant is different from stocks? Like HDFC warrant is currently available at 325 while HDFC is priced much higher…why there is so much difference
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Please go through below link:
http://economictimes.indiatimes.com/markets/stocks/news/institutional-investors-buy-hdfc-warrants-in-hordes-bet-prices-to-rise-quicker-than-shares/articleshow/49329987.cms
If i need to get the market cap of a company from 2005 onwards in screener, how do i get it?
Check https://www.valueresearchonline.com, yearly data they show of March year end price and market cap info.
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Hello
I just wanted to understand the portfolio turnover ratio. I see that most equity funds have portfolio ratio well in excess of 50%. Does it mean the sell and buy half of their portfolio every year.
Would that not lead to huge short term capital gains tax on the mutual fund in case the stocks did well. And wouldn’t the investors end up paying those taxes.
Also, if stocks are not doing well, you would expect the fund manager to have atleast some conviction in their picks.
Thanks
[quote=“sarthakkumar19_, post:96, topic:1282”]
Would that not lead to huge short term capital gains tax on the mutual fund in case the stocks did well. And wouldn’t the investors end up paying those taxes.
[/quote] mutual funds are not taxed. Capital gains are taxed at investors end. If we buy and sell a fund within a year we will be taxed short term capital gain.
[quote=“sarthakkumar19_, post:96, topic:1282”]
Also, if stocks are not doing well, you would expect the fund manager to have atleast some conviction in their picks.
[/quote] generally all mutual funds have a very stringent process for buy and sell decision. And process decides entry and exit of stocks. Of course fund manager has some discretion as well.
Why aren’t mutual funds taxed if they sell a stock within a year.
Because it is part of their regular business operations.
Sintex plastics have listing tomorrow. Can anybody tell why it is not through IPO mode?
@lohiyaakshay08
Hi, it’s demerged entity of Sintex Industries… Textile and Plastic divisions are being separated. Investors of Sintex Ind have got shares of Sintex Plastic already in 1:1 proportion. Hence no need to list though IPO.
Thanks. One more-
As ordered by SEBI, there cannot be trade in “Suspected Shell companies” before the predefined day(1st monday of each month), then how some company’s chart are showing few trades today? Am I missing something?
Would like to understand more on Value investing. I have read so many times that you should buy the stocks when their is blood on wall street. Now a days whole pharma sector going down , Margins going down , so many macroeconomic issues ,I am buying good quality pharma stocks (Sun , Lupin , Divis , Aurobindo , Glenmark , Ajanta) from last two three months , but they are going down and down.
but is it the right strategy to buy in such depressed scenarios when whole sector is having so much problems. At first it looks good to me as I am getting quality stocks at cheaper prices but at the same time Profitability , Margins , growth are affected and also regulatory issues.
So would you guys consider this is a chance to buy this sector (as a value investor) or you will ignore it and park money some where else as the business is getting affected and regulatory concerns are thier ? Sometimes we think we are buying value but later realize that our money has stucked and than we keeps on holding and hoping for the growth and profitability to return
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