Sunday, June 14, 2015

Torrent Power Ltd @ 140.65 ( Below 119 Strong buy)

1.Torrent Power is a 10 Rupee face value Electric Utilities Stock which currently traded at 140.65. 
2. Year High ( 52 week High) of Torrent Power is 186.5 and Year low (52 Week low) is 121, So as per my 52 week high/low ratio formula this ratio is 1.54, If you read my book then you may knew that If any stock year high/low ratio is below 2 then stock price is stable for buying read more details of this term here. 
3. Torrent Power have total 454668881 shares, Promoters hold 53.44 % FII hold 3.62% and DII hold 21.28% shares.Good promoters holding with no any pledged stock so this is a good point. 
4. Torrent Power Net sales on FY 2014-15 is 10273.9 Cr., So when we divided total shares 454668881 in FY 2014-15 sales then we get a ratio “Net sale per share per year” which is 225.96. 
5. So If we compare this 225.96 from current market price 140.65 then we find that CMP is belowe Net sale per share per year, So as per my formula of valuation CMP is a fair value of stock. 
6. Base Price (3 Year Average Price) of Torrent Power is 140.41 So Stock traded near his base price, as I publish JSW Steel article when it traded at 973.10 but I advice to buy JSW steel below 884 and now market prove my theory because  JSW steel is available below 884 for long term buyers. 
Read this article about JSW Steel here
This time we wait Torrent power for 15 % below of base price ( Near 119 for fresh buying). 
7.Book value of Torrent Power is 146.44 , So CMP is discounted to book value, price/book value ratio is 0.9574. 
8. Overall I think  Torrent Power Ltd is a good value buy at CMP 140.65 but if available near or below 119 then this is a strong buying call.
9. Discloser:- I Mahesh Chander Kaushik author of this research report is an existing research analyst and passed NISM certification for research analysts. I am also applied for a grant of registration under SEBI(RESEARCH ANALYSTS) REGULATIONS, 2014 hereby disclose about my financial interest in the subject company and the nature of such financial interest:- 1 Me and my associates or relatives already hold 6 stocks of JSW Steel ltd company so my personal interest is included in this stock. and Me and my associates or relatives have no any stocks of Torrent Power Ltd company so my personal interest is not included in this stock. 2. Me and my associates or relatives have/have not any actual/beneficial ownership of one percent or more securities of the subject company(Torrent Power Ltd). 3. Me and my associates or relatives have /have not any other material conflict of interest at the time of publication of the research report. 4. Me and my associates or relatives have/have not not received any type of compensation from the subject company(Torrent Power Ltd) in the past twelve months. 5. I am not served as an officer, director or employee of the subject company(Torrent Power Ltd). 6. I have been not engaged in market making activity for the subject company(Torrent Power Ltd).

Tuesday, June 9, 2015

HOW TO READ MY RESEARCH REPORTS ( TERMS USED IN MAHESH KAUSHIK RESEARCH ANALYST REPORTS)

Respected readers, 

If you not read my book then this short article is helpful for understanding terms using in my research reports. 
please also note that:-
Minimum holding time in all of my research reports are one year.So use my research reports only for fundamental delivery base buying for holding period of 1-2 years, My reports are not useful for day trading and F&O trading
1. Face Value:-Face value means your original invested money in company, As I described in chapter 8 of my book "Face value is your basic amount which invests in the company , in other words face value is your real share in the company equity capital for example if a company have 10,00,000 share of 10 rupee face value than share capital of the company is 10,00,000 X 10= 1,00,00,000 , and if you buy 50 share of this company at market price of 100 then you invest 50 X 100=50000 but your partnership in company share capital is 50 X 10=500 only , remain 4500 is given as a premium to the seller who sell his stocks to you. If you buy a stock at 3500 which face value is 1 rupee then your investment in the company is only 1 rupee remain 3499 is a premium to the seller
 2. Year high / low ratio :-I always by stocks which year high/low ratio is below 2 .If any stock is down more than 50 % from his year high then I avoid this stock. For example year high of stock A is 256.55 year low is 96 and the stock traded at 108.55 then I avoid this stock because good companies never down more than 50 % within a year until something is wrong. In opposite, a stock is trading more than 100 % from year low than I avoid it for example company B is traded at 56 and year high of this company is 65.25 year low is 19.55 then I not buy it because I think this stock is already running very fast and it is better to wait market fall. 
when a stock is recover more then 40% from year low and if company declare a positive result after the date of year low then year high/low ratio is acceptable till 2.5

3. Promoters Holding:-If promoter holding reducing in last one to four quarters then I think something is wrong and avoid this type of stock because promoters are selling their stocks to retail investors but if promoters increase their holding than I think this is good because promoters knew his company fundamentals very well
4.BASE PRICE: - Base price of a stock is an average price of his last 3 years closing price . Base price shows the real fair value price of stock which market gives him. In other words, we say the base price means 3 years DMA of stock. In the calculation of the base price do not forget to adjust bonus and stock split ( Read my Book for more detail of this term). 
5.Net sale per share per year:- When yearly net sales data (net income or net revenue) of any company is divided with total number of shares then this ratio is called NET SALE PER SHARE PER YEAR.This is the Fundamental target price of a stock so if your stock price is lower from this then your stock valuation is good and if CMP is higher from it then the stock is traded at a higher valuation”. Buy when the market price of a stock is below from his one year net revenue per share. And sell when stock current market price cross one year net revenue per share. 
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