Pincon Spirit Stock

(Lotus) #144

Pincon charts Rs 300 crore capex, to issue $30 million masala bonds .

Although there is no clarity on the integrity of the promoters, the business has been growing over the quarters.

Honest management commends premium in the market.

Although the results are good, pincon price has dropped more than 10% in the last week.

Wonder if it is still a buy?

(Ravindra Mutyala) #145

How do you interpret the case ā€œgiving dividend only to non-promoter shareholdersā€

(deepali.kumar) #146

I did not quite understand what you meant by," no clarity on the management"ā€¦

Pincon management, going by what has happened with Pincon life, (another worthless Company by same management), stock price manipulated from 360 levels back to 60 levels. What more clarity does one need? As for "good " numbers, I highly doubt the reality of the numbers too.

PS , sure is ā€œshowingā€ great , in fact, too good to be true, earnings growth, but how come itā€™s Cash flow is negative back to back. Do dig deeper into this.

And only thing, itā€™s doing back to back is hoarding on debt, any which way. Plus the upcoming Rights Issue ā€¦

PS , for me is a Garbage company, with too much manipulation. The question one should ask is, is Garbage a good" buy "cuz itā€™s cheap?

Disclosure: No longer invested and NEVER intend to in future.

(Kumar Saurabh) #147

One thing i noticed recently, on business news channel, its logo is flashed while displaying charts of any stocks in discussion. Understanding they serve lower economic segment, whats the reason for spending on premium English business news channel?
Disc : not invested and not interested

(deepali.kumar) #148

@Kumar Saurabh

Splurging to display their logo on premium Business channelsā€¦seems begging for attention, of premium Fund houses, to have a glance at their ā€œimpressiveā€ Investorā€™s Presentation maybe and yearning for some respectable investor/ fund house in this godforsaken Companyā€¦is my guess.

(Kumar Saurabh) #149

i was trying to be subtle :wink:

(KalyanKool) #150

Hi Abhishek, Thanks for sharing your in depth analysis. In your assessment on management quality, you didnā€™t seem to account for Mr. Roy being a whole time director of Modi Udyog in which a large price manipulation was seen. Can you please share your views on that? This is one thing that concerns me a lot more than anything else. A risky business is okay with me as long as management is good.

Disc: Invested 15%

(abhi2525) #151

Have read the whole thread and I do feel that there can be a good case of investment here. Any idea about the issues related to the promoters being raised here?

(Ravindra Mutyala) #152

As per the today announcement, country liquor prices in west bengal hiked huge 15 to 40%. West Bengal state beverage corporation limited will take 4% for the wholesale trade and retailers will get 8% margin (earlier 6%). Remaining margins will benefit the manufacturer. As per the filling, this move will benefit the Pincon as it has the presence in Retailing also. On the other hand, there will be a hit in the volumes due to the huge hike in prices.

Earlier private wholesalers used to get only 2% margins on the trade, now WBSBCL is getting 4%. There may be a reduction in the working capital cycle which we have to track.

This looks like a win-win situation for all ( Manufacturers, Wholesaler, and Retailers).

Disclosure: Invested

(nitin.verma) #153

Pincon spirit shifted to grade 6 GSM!!!Annexure II.xls (74 KB)

(yudiagg) #154

What does this imply please?

(sumitg04) #155

Please read the following BSE circular to understand the impactā€¦ In brief investors money is stuck for a long period of time in it

(yudiagg) #156

Many thanks. I hope I can sell off my holdings today!

(sumitg04) #157

It seems you didnā€™t read the circularā€¦

(Whipsaw) #158

Accordingly, securities mentioned in Annexure II shall be moving to GSM framework under Stage VI w.e.f. August 8, 2017. Therefore, as per the provisions of GSM framework, the securities shall not be available for trading from tomorrow. Trading in these securities shall be permitted once a month (First Monday of the month).

(deepali.kumar) #159

This turn of events in PS, although NOT unexpected, is indeed sad, for the the gullible investors. This is the reason we give more weightage to the quality of Management.

Although it is understandable, that it is a little tricky(definitely not an undoable one) task to go through all the financials with a fine tooth comb. PS was anything but a clean BS. Like back to back Negative cashflows from Operations, exploding debt and ever increasing Number of shares Outstanding over the recent past years. But, it was a known fact that management is unclean. Any prospective investor could have googled that, even ā€œafterā€ it was mentioned here in Valuepickr forum.

I bet PS doesnā€™t even pass 2 out 10 ," The 10-Minute Test", that Pat Dorsey writes about in his book.

The disturbing thing, over and above all this, for me, was to see that previous posts here at Valuepickr, that displayed an almost ā€œimpressiveā€ investment case in Pincon spirit, which I can say with confidence must have been prepared by someone with a CA/CFA background, just vanished in thin air.

This is not MMB, where sane views are very rare. If I write something at valuepickr, I should be writing it responsibly. And yes, its true that we might have liked a company but found during the ongoing research that things are wrong and I should call it quits, as rightly said by Mr. Keynes," When facts change, I change my mind". But have the courage to write that too, for the good of others who read.

(AbhijitMani) #160

Totally agree here.
valuepickr thread here was full of cautionary views for quite some time.

(deepali.kumar) #161

Yeah, but NOT from the guys who were all ga ga about it in previous threads.

(Dazzled beginner) #162

Trueā€¦so many red flagsā€¦

  1. no positive cfo since 2013ā€¦
    2)continous equity dilution since 2015ā€¦ Remember wen i had first purchased the share (bonus adjusted 25rs ) the total shares were one crore ten lakhs oddā€¦in less than two years increased to more than 4 croresā€¦
  2. inflated receivablesā€¦
    4)one more thing i noticed was expansion spreeā€¦rampant buying of smaller liquor companiesā€¦but the price at which they were purchased werent disclosedā€¦
    5)continous increase in borrowingā€¦
  3. dividends were paid using borrowed moneyā€¦
  4. borrowings increased rampantlyā€¦guess it was case of paying tom using harryā€™s money.
    All these made me uncomfortableā€¦was lucky i had enough time to completly exit the stock about a month agoā€¦
    Was lucky enough to get away without paying tuition fees to marketā€¦
    For me this was a case of making money in not so good companyā€¦
    Lots of lessons learntā€¦some of the arguements made in this thread tipped my decision in favour of sellingā€¦
    No wonder the stalwarts say do not confuse brains with bull marketsā€‹:pray::pray::pray:ā€¦
    Mungers statement " just know wer the land mines are so that u wont step on them " makes soooo much sense

(roysavio) #163

Am glad I exited the stock more than 2 months ago. I was never a big fan of the company and had posted about it in previous threads here. The equity dilutions were a big red flag for me and the constant jump in sales and profits. :slight_smile: I remember Warren Buffetā€™s warning to be wary of managements that give targets and regularly meet them. :wink: