Mr. Naren is a very respectable and veteran value investor who believes in sticking to his investment philosophy irrespective of Mr Market opinion.
For a long time and despite ailing debt markets, he has been advocating investments in debt instruments maybe due to expectation of turn around of interest rate and economic cycle in short to medium-term.
However, yours risk profile and investment objective should not necessarily be same as someone coming on TV. Try to invest what you understand best.
I am a newbie, just want to present my understanding without all those complicated terms and get a feedback on it!
Share Price * total shares = K * companies valuation, K is sector specific and is higher for higher growth prospect
Company valuation => How much is it worth, increases with increase in revenue/earnings/profit-margin
Revenue growth => Sales growth(Important for unconsolidated market) + Margin growth(Important for consolidated market), it builds a trust if earning are partly distributed to shareholders for large caps, but small caps can reinvest this cash to attain higher growth, right?
Sale growth => Increase in market share in existing region or enter a new geographical region or launch a new product line
Increase in market share => To me this is very much hidden & takes lot of effort to figure out, that what strategies led to increase in past & how will new strategy pan!
I havenât talked about MOAT yet, MOAT would guarantee retaining existing market share or even in some cases have multiplier effect.
Questions:
1.) What are the resources to check for current valuation, or have to do our own individual DCF analysis?
2.) Why would I be willing to pay higher P/E multiple?
I know I have to learn a lot, I started just a fortnight earlier, would be helpful if you guide my boat to show the path forward!
One simple calculation:
For example companies A and B, growing at 15% & 40% CAGR its earnings and having valuation @15PE & 40PE, respectively.
Say both are at 100 today in valuation.
At the end of say, 5 years, Company A is still at 15PE and say company B is at half of its 5 years back valuation, 20 PE.
Now calculate and see the value of both companies end of 5years. Then you will be surprised and understand 5 years back which is cheap, in hindsight. Probably u will get the answer to your question.
Off course MOAT/SECTOR/PROMOTERS/OPPERTUNITY SIZE and lot of things matter in valuations.
Just search for ELSS, or tax saver in any investment website
If you donât know one
ET Money
Things to note: Always buy Direct Growth MF, if you ask why, then read about them, also look for ones with lease expense ratio and go through their portfolio, or you could just toss a coin and choose one!
I have recently started evaluating stock opportunities and have a very basic question.
I have seen a few ways of calculating FCF involving mainly Cash from Operations and Capex. But how do long term and short term investments affect Free Cash flows for a company?
Wrongly flagged. Not able to unflag.May be ignored.sorry.
Sir,
I have a query in the forum and not to you specifically . I have hdfc demat a/c and sbi cap cap account in my name. These are linked to bank joint account with my wife. My wife is the nominee in both Demat accounts. . My question is 1. in the event of my death , whether my wife can operate my demat account or she would have to open first a new demat account and shares in my account would be transferred to her demat account. 2. Till the formalities in 1 completed, dividends etc would perhaps be deposited in our joint account and perhaps there is no problem in drawal by her. Is my understanding correct? 3. Whether shares can be transferred online to my or my relatives demat account either in same or different DPs and If so, how it should be done?
Regards
Tamal Bhattacharjee
Whatever interest/dividends/income (Sometimes losses too), directly go to the FCF of the company. Letâs say Company A produces 100 in FCF. They also hold some Mutual Fund units that pay Dividends. Letâs say they receive 5 in Dividends for the year. So FCF becomes 105 for the year.
The problem is, apart from safe securities, all speculative securities do not give linear gains. They also give losses sometimes. So I generally ignore income/losses from non-business investments from FCF. To make up for this, you can either value them separately or look at what is the B/S value for them and take it at that Fair Value and add back to your final estimate of Value.
I donât think other income coming from non-core operations (such as investment into debt funds) are included in FCF calculations. Are you sure about it?
Shemaroo has launched shemaroo marathibana and shemaroo TV. But on both channels, I donât see a single advertisement. Also, the channels are free. Just wanted to understand how does shemaroo make money from the two channels.
They are not provided in formulas because it is not general. All companies donât have a common source of short/long term investment.
But the concept of a âFree Cash Flowâ implies that it is that amount of Cash that is owed to the shareholders of the company. And any income from external investments are also owed to the shareholders of the company.
If you start questioning the Balance Sheet figures, then you canât proceed further a lot. Before attempting to calculate FCF (Which I assume you are going to use for a valuation or pricing), you should be sure that you trust in the management to walk the talk and that there is nothing off about the Balance Sheet. Rather, if there is something off, you already know why.
If dso based on last quarter instead of annual figure and there is a big jump Itâs a red flag
Together with inventory also behaving the same way
It needs further investigation maybe they had a large expansion, maybe most of the large sales Was towards end of the quarter
If the pattern repeats, like in case of Caplin points the markets donât forgive and think of the worst
Hi Mr Tamal.
I presume both the Demat accounts are in single name ( your name) so in the unfortunate event of the holderâs demise the nominee will inherit the holdings and has to go into nominees demat account ( process called transmission and not transfer). so to avoid this better way of holding is you being first holder and she being 2nd holder. in this case the joint account will become single account. point 2 - your understanding is right in that all the benefits like dividend will be credited to your savings bank account whcih is joint account so she can withdraw without any problem. point 3 - if you want to transfer shares to any other demat without being bought and sold in the stock exchange then use the demat transaction slip and mark it as off market deal. the shares will be transferred.
hope this helps
Attention:- @gchandra.9
Sir, thanks for your time and reply. As you have rightly said, since both Dmat a/c are in my name, so it would be better to open joint a/c to avoid hassles in future. Now my question is
" whether it is allowed to convert my single holding Dmat to joint a/c Dmat with my current holdings transferred to newly opened joint account automatically or I have to apply for off market transactions to my DPs "
