Page industries

Stock Opportunities
41

I think Speedo doesn’t add much to the topline currently. Its in nascent stage.

42

19% capacity increase every year till 2016 -2017

This is a clear visibility statement from page to grow atleast 25%CAGR for the next 5 years.

The operating leverage should come to play by this and with absolute pricing power, good days ahead for page still!!!

43

Hi,

I had visited a multibrand outlet in Bangalore. Page had great visibility throughout the store.

Here is what the owner had to share:

  • Page has huge brand power. Even though Heinz has better quality it sells much less

  • Page introduced kids thermals and other inner wear about a year ago and it has good sales. He told he has stacked-up inventory to avoid running out of stock!

I think more than speedo, which will take more time for repeat sales, the kids segment will contribute significantly.

So Page has mens, womens and kids inner wear, gym wear and swimming wear to sell!

Hitesh Bhai,

It would be great if you could give a techno-funda call on Page. Do you think it can give good value? EPS compounding might happen but will market give a lower P/E when competition heats-up with Heinz, Fruit-of-the-loom etc?The high P/E days were when there was hardly any competition from world class brands like the above.

Cheers

Vinod

44

Vinod,

just a small correction - heinz is the ketchup maker. hanes is what you have in mind.

45

:))) HG, thanks that was a really funny goofup… Ketchup and underwear

46

Think it this way, Vinod. Warren Buffet is paying around 13 Billion dollars for Heinz stake at 22-23 PE. Heinz is a ketchup company and there are lot of Ketchup companies in India and China which can give it a run of money( Warren has given a statement that he is hopeful of Heinz growth in emerging markets). Jockey as per you is a great brand. Though available at a P.E of 35, the predictabilty of 25% plus growth is much higher for atleast 4-5 years and therefore it commands a higher PE. With average ROE at around 50% and earnings predictability, I doubt it will be available at a lower PE.

47

Regarding growth prospects, I think there are no doubts about Page inds. The only distant risk I see is of PE compression. If and when that happens needs to be seen.

48

Odd behavior from the company!

I went back to see if they did this in the past? But, could not find anything for FY12. If they do not want to release standalone financials for the last quarter, can this mean something? The company has been on a streak of positive surprises, is it time for a negative one?

Here is what BSE says:

Page Industries Ltd has informed BSE that the Company would publish the audited financial results for the year ended March 31, 2013 within a period of 60 days of closing of the Financial Year, as such the unaudited financial results for the fourth quarter of the financial year 2012-13 shall not be published.

Questions: What are they hiding or more importantly what are they revealing?

49

Surprising but without info I would refrain from selling off position

50

Companies opting to publish audited results is a routine matter and I dont think there is usually anything to hide.

But at around 3700 plus levels it looks expensive and I guess it needs some time correction with mild price correction.

In sharp corrections it is the usual psychology to latch on to stocks which are creating new highs thinking them to be “technically strong” and this usually leads to exhorbitant valuations.

51

True enough but nowadays a little shaky body language gets victimized. I believe there a huge set of companies avalible at better valuations. The business no doubt is good but would not buy at these valuations

52

The researchers have found that the stocks that did exceptionally well for last 5 years did poorly in terms of returns in the next 5 yeartime frame. Mathematicians/statisticianscall isreversionto mean. The common folks say… nothing grows to sky…even if it is GentsChaddi or Baniyan company. If history is witness then …3 years from now this stock willbeavailable atattractivevaluation with good 20% long term revenue and profit kind of growthpotential— as seen at that point in time. Most of glamour stocks especially small and medium ones, are available at attractive valuation few years down the line. Here in this stock at this valuation I think the odds are stacked against new investors.

53

Investing is not so easy. Mean Reversion is a concept only in books.

54

true, and its most used by fund damagers

55

Page has not been the typical multibagger stock in a time frame of last 2 years. It has languished in the region of 2200-3700 uptrending channel since Dec 2011. Thats a 60-70% return within a time frame of 18 months. But what it has done is provide absolutely steady compounding without too much loss of sleep. And one could have bet a heavy part of portfolio in this one.

Otherwise if you compare it with returns generated in same period with stocks which we are fond of ,

like ajanta from 150 to 800

or mayur from 160 to 500

or kaveri from 450 to 1400

or astral from 120 to 300

and some others,

then page will pale in comparision.

But if u dont want to have too much homework or worries and anxiety then page is the stock to own.

If u feel that u have amassed a good amount of capital and want to relax and not have too much worries, then to limit downsides, and still enjoy the ride, one can buy page.

1 Like
56

Agree with you Hitesh. It is a steady compounder now(25-30%). It’s a sound business which is by now on many investor’s radar. Same is the case with Titan and Gruh as well.

57

Hitesh, i have a different view point.

1). You have mentioned the winners. There were other stocks too that most investors had in their portfolio, which have fallen quite a lot or went up & have come down to same levels. so the returns should be seen over full portfolio.

look at the stocks discussed in late dec 2012, and where they are now.

2). there is always issue of reasonable size allocation to lot of such companies as the visibility/ comfort is not that great. so one loser can average out one winner.

3). its also a question of amount of churning that an investor does/ like to do in his portfolio. high churning may not be everyone’s cup of tea.

Over period of time, i realize having mix of strong moat compounders and opportunistic/ one off bets could be ideal - this is from personal experience…

Regards

Vishal

comparison.

58

Hi. Not sure i understand the difference. even a 25% compounder will double in 3 years and triple in 5 years giving multibagging returns. surely there is nothing unwanted in this?

59

Would not want to sound against the tide but most of the Jockey shops in malls do not have the same rush it used to have in the last 2 quarters…may be the rush was due to the thermals in the previous quarters…

There are others which are available at better valuations than Page right now. With cotton prices hitting high, I would wonder if this can be easily passed onto the customers with consumer sentiments at such levels…fingers crossed

60

1).

2).

3).

vishal,

Agree with your viewpoints to a large extent.

But if one had bet a reasonably good amount on the winners discussed, the losers would be taken care of.

Question of portfolio allocation is the main investment argument in stocks like page where one can allocate a huge sum to the stock and lay back and watch the portfolio grow.

The path to multibaggers will always be riddled with some losers and one will have to learn to take them in one’s stride and weed out the losers at the earliest once the story goes sour.

A stock stops being a quick multibagger once the whole market is convinced about its potential. Page now falls into that category. It will at best be a steady compounder if bought at the right price.

Best thing to do in case of page inds is to do what was mentioned at the beginning of the thread – pray and wait for a quarter or two of lacklustre growth and when the opportunity comes up then load up.