CCL products seems to be a new entry in your portfolio. What is the thesis?
CCL Products is in the business of processing and selling instant coffee. It has plants in Vietnam, Switzerland and India for processing coffee. Last year was the first year of operations in Vietnam and company sold coffee worth 101 crore from there (17% of total sales). The company expects good growth from this place in future years. Last year company processed and sold around 13800 M.T. of coffee, out of which only 2500 MT might have been done in Vietnam. The capacity at Vietnam itself can be raised upto 20000 M.T., thus entailing huge growth potential (A total of 20K in Vietnam and 20 K in India should translate into 3x growth from here as well). That should at least keep the company growing for next 5 years at 25% p.a. in a blue sky scenario. Also, the company gets huge tax benefit at the Vietnam plant, which in turn will improve margins, increase cash flow thus reducing the interest cost and allowing company to report better margins for quite some time to come. Company appears to be well poised for next several years.
Company exported coffee worth 554 crores last year. This means that the company exported 90% of its produce. It exports to more than 60 different countries.
The company has also entered into retailing of coffee using its own brand Ć¢Continental CoffeeĆ¢. Though, I did not find any of continental coffee in Bangalore. As the company is from South India and it has no presence in Bangalore, I would assume it to be a far shot, but this part of the business may be worth watching.
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Just forgot to mention that we already have a thread on CCL products at valuepickr. The investment arguments there are much more detailed.
http://www.valuepickr.com/forum/untested-worth-a-look/711288613#410340148
gyani baba ji waiting for your portfolio update, & any new added to ur portfolio.
Interesting portfolio Gyan. Loved to read. Every word of yours shows a clarity of thought in your mind, and that is very important in investing.
Kaveri is fallen almost 30% from top in this raging bull marketā¦ any specific reason you have been able to decipher? Please share.
I am not able to find any specific reason for Kaveriās fall except for the promotersā perceived lack of interest in the business. They want to start another business by selling roughly 1/3 of their stake in Kaveri.
I was eagerly waiting for the shareholding pattern of Kaveri for December quarter. Somewhere I had read that the promoters were selling in the open market. But all those were just rumors as the promoters have not sold a single share in the open market in the last quarter. Actually, the only sellers were small retail investors and the buyers were FIIs whose stake have gone up by almost one percent in the company. Many punters and operators have used the opportunity to hammer down the prices as there were many days when one could see a sell order of almost 12-13 lakh shares in NSE and it continued for quite a few days. Considering that almost one lakh shares of the company trade daily on NSE, puting an order for 13 lakhsharesfor serveral days consistently appeared malafide.
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On shareholding pattern of last few years, promoters holding has come down by around 6%. Latest announcements on exchanges shows some inter-promoter transfer, no selling to outsiders. There was a rumour that promoters want to sell some stake, and in reply to the exchanges they have not denied the rumour and said that some promoter may do it to raise money for some other ventures. There has been no selling by any institution.
The share had a stupendous run in last few years, and it is possible that public shareholders want to lock in their gains, and there is nothing wrong in it. In absence of institution or promoters buying, share prices in mid cap companies may correct substantially even on public selling. So such fall can be great buying opportunity if nothing is fundamentally wrong. But we must make effort to be sure that nothing is wrong.
Gyan ji,
i must admit this has to be one of the best thread here when it comes to PF management. Compact insights on the āWHYsā of the stock picks is too good for someone like me who is not from the finance background.
Thanks pd,
I have gathered a lot of insights by reading the posts on valuepickr and going through the threads of other senior members. Real credit goes to them.
Gyan, i remember reading your blog. Cant seem to find it now. Can you please share your blog link.
Thank you. Even though your blog updates are infrequent they are valuable when you do write a post.
@gyansr, Hi Gyaan Bhai, Its been while you have updated your Babaji ki Potliā¦
Please open ur Pitara and share updates in your portfolioā¦
Thanks,
Vishal.
Updates have not been provided keeping in mind the Sebi regulations. I donāt want to be seen as promoting a certain stock. For the same reason I have taken my blog private as well.
Your blog asks for invitationā¦