Pure Case Study/Tutorial: Vimal Oil and Foods

(Kartik Dutta) #1

Guys, I am a beginner in investing and this forum. I read a few “simple” books on it
and I am trying to pick out stocks to invest in, through online virtual sites (Still in College :blush:). Could you please tell what other criteria to look for than the financials I have posted, Other Things I should study about the industry or the company ?

I wanted to ask your views on the following stock. I just ran a few queries through screener.in and got it as a response. It meets the following criteria -->

Return on invested capital > 25% and
Earnings yield > 15% and
Book value > 0 AND
Average return on equity 10Years > 15% AND
Return on equity > 15% and
Market Capitalization > 15 and
Price to Earning > 5 and
Promoter holding > 30%

Any of the senior Moderators who could elaborate, I would be very grateful to them.

Disclosure : No Holdings

(Aman Vij) #2

Financials is the place where you begin. The real questions comes from understanding the story behind the numbers - what led to higher ratios, is it sustainable, what are the opportunity size for the company,managements attitude towards shareholders and most importantly the risks involved with the company’s business model. Go through few threads and you should get the idea of what it takes to build conviction because in trouble times (which will be number of times in company history) it is only your own conviction which will help you when others around you are panicking.
An extract posted by Prof. Sanjay Bakshi summarizes it in a better way

(Kartik Dutta) #3

Rokrdude/ Aman ji,

Thank You very much for that information.

Another query is that where can small Retail Investors get the information you said we should have for such Small sized and relatively unknown companies ?

Also, Would it be wise to know the macro economic and sector performance to which the company belongs to before investing ?

(ishandutta2007) #4

Any clue how borrowings have incresed and other liablities have decreased in 2016 ?