I would like to know in which site I can get NPA, GNPA, ROA , ROE of all Finacial companies like Banks, NBFC, Housing Finance. I have asked many but no one is helping.
I use Morning Star for ROA/ROE or any other financial ratios. If you want every company at one place like a data bank you can use Dalal Street and Capital Market. With magazine subscription this comes from free.
Regarding impairment ratios like NPA, are calculated basis risk systems. I haven't come across any financial website giving data at one place. Thomson Reuters may have, but expensive subscription.
What I do is create a excel sheet, there are not many banks in India. I was maintaining since last last year. Half a day job in every quarter.
Should we invest in such companies? I mean I understand that the carbon companies will grow but what about the exaggeration ? People are just buying on any small news. Lets say if a drinks manufacture company announces that they might introduce new products in few months. You will see an 5% to UC in some cases..
It is very difficult to find value in any stock? But waiting for market correction is a good idea ? What if market goes to 15000 ( Nifty ) and then correct to 10k? who knows.
Finding it very difficult to invest at this level. Any suggestions.? wait for correction ? Or Invest in companies with good roce/roe low or zero debt companies ?
The below weekly graph speaks about the current market sentiment:
All of us can have a fabulous discussion on this if you can elaborate further on context of subject:
- What is exaggeration mean to you? Relative, absolute?
- What is small news? And who is people here buying?
- Again how would you define value here? Business value, perception value?
- What is market correction, only fall of index fall, fall of earnings?
- What if Nifty goes to 25000 and never pull back till 2068?
- Low debt and high ROE- why not high growth, moderate debt?
Are banks / financials cyclical? If yes, are we in peak or trough now?
I understand that high promoter shareholding pledged is a negative indicator. But can it not indicate that the promoter is confident of his business?
This is only if promoter intention of pledging shares is to save company. Pledge % above 15% should raise alarm and need to check reasons behind it very thoroughly.
Thanks for replying by questions to my questions but anyhow I am trying to explain below about what I think of the market.
1.This is absolute exaggeration, lets say a value of a flight ticket is 1k, and you are buying it at 5k due to high demand before the summers thinking that the price of the ticket will be 7k before the holiday starts.
But what if the value of ticket goes down to 3-4k, due to climate,emergencies etc.
2.Small news means if I say I am planning a trip to GOA, and suddenly all the friends join you thinking that plan is good and some of them book the ticket in advance( thinking of point 1 above). But just before the last day the trip gets cancelled. Now the one's who booked the ticket will be at loss. So why not buy the tickets once I plan, book hotels and my flights ?
3.The value you are paying is perception value.
4.Market correction: Some smart guys who booked the tickets very early cancelled midway so they don't have to bear the huge loss.
5.That's what makes me get this this feeling of being left behind and the other feeling says why book tickets too early? buy at the correction ?
6.Well I think the guys who bet on the guy who borrowed all the money for the ticket will go bankrupt, and the ones who bet on the guys who bought the tickets on there own will still have chance to survive.
Please delete if all this does not make any sense.
Terrific brain teaser, let us explore:
- Yes price can go to 3/4K , you are right. But this happens in any place where buyer and seller decide a price. One buys a ticket in summer (like me) because it’s one of the patch my daughter has a holiday. I have no choice, her happiness over rides everything else. You can say I am emotional buyer then. There would be few (more my Bangalorean) who will tuck tail in summer and afraid to go anywhere due to clement weather in Bangalore. They will not even buy at all. There may be a third category buyer who thins ticket will go to 14K, hurry. In all cases either there is a price paid or not paid, that’s what determines stock price. In case emergencies manage like business as to how to handle, do you think Indigo will stop selling tickets if the price falls. No, he has better reason to sell more, high inventory turnover with low margin. If you think carbon companies are exaggerate no point in fighting crowd. Either join the party, plan for contingencies or step aside and look for other alternatives.
- Crowd will always behave differently as we humans are not alike. Every time I ask my wife for Goa first thing she thinks this idiot will eat crab and lobsters there which doesn’t go in her DNA being vegetarian. Similarly some of your friends would have thought positive and negative about your idea. When idea becomes a positive perception (like party in Goa, fun with friends) money becomes immaterial and everyone joins the queue. This can be beaten with a plan, you named carbon companies. I am buying a carbon company for last 2 years due to my rules and methods shows up a buy. But I want to maximise my return, will wait when others are also joining the queue. They may be wrong but by disrespecting crowd I will get killed in stampede. Either I stay out or join with an independent mind i.e. research, entry and exit plan.
- Perception value- same analogy, growth investors think value is expectation not pure balance sheet, value investors think value comes from balance sheet largely, speculators think there is no category of investors. All are right or wrong, only way out is carve out a plan and stick to it. As long as your average gains are higher than average loss you are in game.
- Market correction- if some guys cancelled ticket through luck nothing we can do about it. If there is a method to this madness definitely we need to learn. I have seen you can gauge and time the market not predict.
- You can’t make money at any stage except two ways. Your selling price is higher than buying price. Or you buying price is lower than selling price (short selling). And this activity is easier when crowd is buying, becomes difficult when crowd is selling as index is average. Yes buying after market correction is an efficient way, but corrections happens in cycle. It will come when it has to, we cant do much about it. If we deal with extended bull run we make sure a. As my mentor says don’t give anything back to Modisaab, protect profits b. Tone down expectations to lesser margin c. Minimise loss so that it doesn’t jeopardise account
- Either you use own money or borrowed money both have Bapu’s face. What differentiate is interest cost you paid vis-a-vis opportunity cost you lost on your fund. As long as some one knows how to keep risk within appetite leverage can work wonders. Working capital leverage is biggest weapon for most of the industries these days. But if one gets a ticket at 20% interest for a entertainment like Goa he needs to check his head first. Sitting tight depends delaying instant gratification, that means if you don’t have capital then create a bank roll with lesser risk than throwing huge risk through margin.
Further Analysis of Multi-Bagger Stocks
IAN CASSEL OCTOBER 24, 2017 BLOG, EDUCATIONAL 0 COMMENTS
This article and presentation was produced by Kevin Martelli. The following presentation “A Perspective on Value Investing” starts with a brief introduction on value investing based on my professional journey and includes an “Analysis of Multibagger Stocks,” a historical study of stocks around the world that achieved more than 10x return in the 15 years period between 2000 and 2014.
This analysis was inspired by Thomas Phelps book “100 to 1 in the Stock Market,” published in 1972. Today, just like in 1972, there are many lessons to be learned by observing the exceptional long-term performance of a few selected stocks. In particular, studying historical case studies helps in getting better at: (i) assessing the key drivers of long term value creation; and (ii) identifying how there can be a significant discrepancy between short term market perception of risk vs. long term real risks. Furthermore, observing how most market participants missed great investment opportunities teaches something about the importance of being humble about your own assumptions and opinions and the many challenges we face as long-term oriented investors in making even rough predictions about the future.
Performing this research has also been useful in better understanding that there are many patterns that can lead a particular investment to achieve superior shareholder returns (the 3 case studies in the presentation are in fact very different from one another). Although “the rear-view mirror is always clearer than the windshield,” it is very helpful to increase one’s database of investments that worked in the past in order to be open-minded and better prepared in the search for new investment ideas.
Additionally, one should also keep in mind that studying historical multi-bagger stocks is also a good way to reduce one’s investment mistakes. In fact, for every multi-bagger stock that manages to grow revenues at 20-30% per year there is likely to be at least one traditional company that is probably being disrupted and is likely to disappoint its shareholders in the future (see the case study in the appendix). Avoiding these companies can be as valuable as identifying good investment ideas.
Turning towards the search for multi-bagger stocks over the next 5-10 years, I think it will become increasingly important to be able to identify business leaders and company cultures that are customer-centric and able to be continuously innovative, while avoiding the pitfalls of corporate bureaucracy and hierarchy. Although most firms would argue they are already pursuing these sound business principles, very few are able to execute on them. Thus, in the next few years as the pace of technological disruption accelerates and traditional barriers to entry (such as high distribution costs) continue to diminish, the share of companies that can create value for shareholders regardless of the quality of their leadership team is likely to decline is well. The challenge for investors is being able to identify “intelligent fanatics” CEOs and great company cultures early on and have the conviction to invest in them for the long term. On this topic, I think public equity investors can learn a great deal from Silicon Valley’s leading venture capitalists.
As a final point, it is interesting to note that Thomas Phelps’ book was published at the beginning of 1972, before the 1973-74 bear market, which offered exceptional investment opportunities to rational investors who had cash to deploy. Currently, based on most metrics, asset prices are generally quite expensive, sustained by a combination of unprecedented interventions by monetary authorities and widespread optimism in financial markets. Both interest rates and price volatility around the world are at a historic low. I have no idea what the exact trigger and timing of the next bear market will be, but hopefully this historical analysis will help investors maintain a rational long-term perspective when a more risk-adverse market sentiment eventually returns.
when calculation PEG ratio , which growth we should consider in denominator. Its Revenue growth , Profit after tax growth or EPS growth.
Can anyone please answer this.
Thanks in Advance
1.What is free float.? From where we can get the information? What relationship this has got with the stock price movement?
2. Why for few stocks, with volume of few hundred, stock price moves big where as in many cases,with volumes of few lakhs, stock price hardly moves?
I will be thankful,if I get clarification in this respect from forum participants.
Since, you are using per share information in PE ratio, you can use the EPS growth.
Free float is the number of shares that are available for trading in the market. For example, if a company has 1 lakh shares outstanding and 75% is held by the promoter, then only 25,000 shares are normally available for trading.
Stock price movement is a function of demand and supply. If there is more demand for a stock, the price will rise. The more the demand, the more the volumes. If the stock has low float, demand can sometimes spike the prices as there is demand-supply mismatch.
I am new to investment concepts and learning things from VP forum and reading books . Need help from any one in this group wrt to below query I.e
how to Predict " Expected annual growth rate i.e ‘g’ " in the below intrinsic formula of benjamin graham ??
V = EPS x (8.5 + 2g), or.
Value = Current (Normal) Earnings x (8.5 plus twice the expected annual growth rate)
@basumallick Hi, Just want to know what are the rules of declaring results for SME?
Is it halfyearly for them?
Yes that’s right. NSE emerge has stipulated half yearly audited reports. Surprisingly it also mandates corporate governance practices of main board…i.e. clause 49.
Why does market assign different multiple to different stocks? Is it expected growth? Is it good roic? Is it good margin? Let say three companie, company 1 20% growth expected for next 5 10 years but very low npm 1% and risk free rate return as roic…
Company 2 no growth …risk free rate roic…but high npm >30%
Comapny 3 no growth average to low npm but vrry high roic >40%.
How would market go abt these simple cases…ofcourse its not so simple but i am trying to understand the rank ordering of these parameters…
If someone can give real stock examples that will be great
company 1 120% growth expected, but npm 1%
when there is sales growth but very npm means ,suppose in the long run if company sales doesn’t grow as expected ,but expenses always occurs til the company runs, then it would be very tough for the company to survive and meet all the expenses occured to execute business or the company.so low npm like 1% is always risky businesses as company needs much funds required to grow as it doesnt save much from its sales so it would take debt then and will pay interest which in turn will reduce npm further…
example, company A which sales around 10 lakhs first year,opm 5% 50000,npm 1% 10000,inv turnover 3,fixed ass turnover 5)
now in 2nd second years if company wants to increase sales growth to 120%, then it would need around 2 laks more if its assetturn over is 5 or more than 5, so it would take loan of 2 lks and increase the sales to 22laks.Suppose its FA turnover is low it might need more funds, so after taking loan it pays 24000(12% p.a as interest), now its sales ( 22laks, opm 5% 110000, npm 1% 22000, but it needs to pay interest as 24000 yearly, so net profit -2000).
for example , company eps is 5, Its CAGR 10y avg is 10.5%, then value = 5 * 2(10.5)
thats why analyst prefers low PE stcok ,for example @ eps 5 if stock is available @ price of 45 then its PE is 9 which provides some margin of safety , now cagr is 10.5 which is reasonable , now according to formula we already got the value of 112.5, so u would feel safe to buy because there is no risk of falling much though if it hasn’t been valued much in the market in future.