ITC - FMCG + Hotels - Time to Light Up the Cigarette ?

Analysts are now making investment case for Cigarette and FMCG Major - ITC Ltd. ITC's earnings growth has been remarkably stable despite tax increases and regulatory restrictions, reflecting its strong pricing power. ITC's CAGR was 18.4% over the past decade and average variance was only 3ppts. The new smoking ban appears to have had little effect and we do not expect it to have much impact in the medium term.

Volume growth of approximately 20% in filter cigarettes in 1HFY09 is encouraging and expect a 15% Cagr in the cigarette business Ebit over FY08-11.

Non-Cigarette Business:
While there has been concern over the need for a cash infusion into the non cigarette businesses, only 12% of post-tax cash generated by the cigarette division over the past seven years has been used for non-cigarette expansion. The paperboard unit is coming out of its capex cycle and the fast-moving consumer goods (FMCG) division's losses likely to shrink in 2HFY09. However, cyclical pressure will remain on the Hotels business.

According to CLSA here is the Sum of the Parts Valuation for ITC
Cigarettes - Rs 178 (19x PE, 20% discount to HUL)
FMCG - Rs 17
Agribusiness - Rs 3
Paperboard Rs 12
Hotels - Rs 12
Cash - Rs 6
Total Rs 225 is the Target price. ITC is expected to report an EPS of Rs 9.1 for FY09 and Rs 10.3 for FY10.

What's Holding India + What will Boost It ?

During the past five years (F2003-2008), India has received cumulative inflows of US$224 billion. This serviced India’s biggest ever credit and capital spending cycle. India's outstanding credit grew from US$189 billion in March 2003 to US$643 billion by March 2008. Over that time, the country spent US$1.4 trillion on investment. It's no surprise that growth accelerated and averaged nearly 9% during this period.

India's infrastructure was not ready for this growth, and combined with the surge in global commodity prices (again reflecting unprecedented global growth for mostly the same reasons), inflation surged - a classic case of overheating. Of course, the Central Bank took prompt action, but it has left us with a cyclical slowdown in growth. If capital flows recede, a natural outcome of the ongoing global crises, India’s growth will hurt further.

During the same period, the BSE Sensex constituents on aggregate, have grown earnings fivefold in five years from Rs247 billion to Rs1,215 billion. If earnings fall in the coming quarters, it should surprise nobody. Morgan Stanley expects broad market earnings to decline by 10%-15% in F2010 and ROE to decline in the coming 18 months. India still trades at a premium of 25% to emerging markets.

What will be a Big Booster to the Market:
Global Economic Crisis should Calm down.
Credit growth needs to go below deposit growth for a sustained period so that banks' balance sheets become more liquid.
Infrastructure Spending: The government will need to boost infrastructure spending and also cut tax rates. This cannot be funded using public debt and hence as corollary government will need to privatize assets or raise multi-lateral agency loans.
Election Verdit - India should avoid a fractured verdict.

Morgan expects earnings to grow 2% in FY09 and fall by 10% in FY201

Will US slowdown affect India?

THE OTHER day, my friend expressed concern about the US economic slowdown affecting India. He, like many others, based his fears on two factors. One, the slowdown in the US economy will result in lower export of Indian goods and services to that country, thereby slowing down the Indian economy. And two, the US slowdown will hurt the Indian stock market, forcing people to cut their demand for goods and services.

But are such fears justified? Not entirely. Consider this. There is a huge domestic demand for goods and services. This means exports do not contribute substantially to India's economic growth. In any case, India exports to many countries apart from the US. A US slowdown does not, therefore, automatically mean a sharp drop in Indian exports.

Of course, that does not mean that a slowdown in exports to the US is not a cause for concern. If nothing else, exports are important as it provides us forex to pay for our imports. But the important point is that we do not depend so much on exports for economic growth as do, say, economies in South-East Asia. While globalisation will ensure that the economy will be affected, the impact may not be large enough to cause a sharp slowdown.

But what about the negative impact on the stock market? Our stock market thrives on tech companies, all or most of which derive a substantial proportion of their revenues from the US. The US slowdown will, therefore, hurt the tech stock valuations.

But will fall in equity values force people to cut down their current consumption, thus, slowing down the economy? Not really, because only a small proportion of Indian households invest in the equity market. Fall in equity values will not, therefore, bring down income levels forcing people to cut demand for goods and services. In short, fears that the US slowdown will cause great harm to the economy can be, at least for the present, put to rest.

Stock tips that you can buy and sell

Buy GMDC - Target 280 - Short Term Target - Stop Loss 190

Buy Gujarat NRE Coke - Target 126 - Short Term Target - Stop Loss 81

Buy Hind Rectifiers - Target 153 - within 0 days - Stop Loss 108

Buy Infosys - Target 2000 - Within 3 Months - Stop Loss 1695

Buffet's hamburger analogy

Economic theory tells us that higher prices dampen demand and lower prices increase demand. But when the stock market witnesses a bull run, investors do not behave like normal consumers. The higher stock prices go, the more they appeal to investors, a psychology that often proves detrimental to the interests of both investors as well as the market.

Buffett elucidates a point beautifully in a letter he sent to his shareholders in 1997.

“A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef?

Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong.

Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the ‘hamburgers’ they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”

How Warren Buffet learnt the lessons in investing.

I came across an article where Warren Buffet tries to explain how he learnt the lessons in investing.

I bought first stock at age 11. I bought 3 shares of Cities Service Preferred at $38 ¼ . My sister followed me and did the same. The price then declined to $27 and sister complained every day on the way to school. When the stock recovered to $40, she and I sold. I had a $5 profit. The stock then rose to $200. The lesson I learned was not to get involved with others on investments, or else their emotions will spill over.

Advice from Warren Buffett to young people on the verge of careers in managing investments

Asked what advice he could provide to young people on the verge of careers in managing investments, Buffett boiled down his principles into four cardinal rules:

1. Understand the business in which you are investing. "You can't make money in stocks unless you understand the business," he said. "I look for businesses within my circle of competence." Having a large circle of competence is less important than having one with a well-defined perimeter.

2. Look for sound fundamental economics. Investors should seek out companies that have a sustainable economic advantage — a phenomenon Buffett called "a castle with a moat around it." Consider Coca Cola, for example. The company's brand name has represented enjoyment for generations, which no competitor can buy for millions of dollars. "Share of market follows share of mind," noted Buffett.

3. Find competent leadership. Companies with a sustainable economic advantage need honest, capable and hardworking leaders to retain their lead. Berkshire-Hathaway's managers have one instruction: Widen the moat. That keeps the castle valuable.

4. Buy at the right price. Purchases must be made at the right price if they are to pay off.

Buffett cited example after example to show how he had used these principles to make investment decisions during his career. As a young investment manager, he took Moody's manuals and went through them page by page until he found the companies he sought. A bus company in Bedford, for example, had $100 a share in cash, but its stock was being traded at $40 a share. Buffett found such deals because he went looking for them. "No one will tell you about them," he said. "You only get told about things someone is pushing for some reason." Buffett invested in companies like Coca Cola and The Washington Post for similar reasons. Berkshire-Hathaway built its empire on the success of these investments.

Asked why he has not retired despite his phenomenal wealth, Buffett said the reason is that he has more fun doing what he does than anything else. "The fundamental thing is that the process should be fun," he said. "I had just as much fun when I had $10,000 to invest as I do now. It's crazy to do things for your resume. It's like saving up sex for your old age. You should do what you enjoy as you go along, and work with people you admire. I look forward every day to the next day. I'm wired for this game."

What Is the warren Buffett Investing Philosophy?

Warren Buffett: How He Does It

Did you know that a $10,000 investment in Berkshire Hathaway in 1965, when Warren Buffett took control of it, grew to be worth over $50 million by 2003? By comparison, $10,000 in the S&P 500 would have grown to only $500,000. Whether you like him or not, Buffett's investment strategy, known as value investing, has been one of the most successful ever. Here we look at how Buffett amassed this fortune solely from investing.

What Is the Buffett Investing Philosophy?
Value investing looks for stocks whose prices are low for their companies' supposed intrinsic worth, which is determined by an analysis of certain characteristics and fundamentals of companies. Mirroring the mentality and shopping style of a bargain hunter, value investors looks for products that are beneficial and high quality but cheap in price. In other words, the value investor searches for stocks that he or she believes are undervalued by the market. Like the bargain hunter, the value investor tries to find those items that are valuable but not quite recognized as such by the majority of other buyers.

Warren Buffett takes this value investing approach to another level. Many value investors aren't supporters of the Efficient Market Hypothesis but trust that the market will eventually properly start to favor those quality stocks that were, for a time, undervalued. Buffett, however, doesn't think in these terms. He isn't concerned with the supply and demand intricacies of the stock market. In fact, he is not really concerned with the activities of the stock market at all. He chooses stocks solely on the basis of their overall potential as companies--he looks at each company as a whole. Holding these stocks for the extended long term, Warren Buffett seeks not capital gain but ownership in quality companies that are highly capable of generating earnings. When Warren Buffett invests in a company, he is not concerned whether the market will eventually recognize the company's worth; he is concerned with how well that company can make money as a business.

So How Does Buffett Find Low-Priced Value?
Here we look at some of the questions that Buffett asks himself when he evaluates the relationship between a stock's level of excellence and its price. Keep in mind that these are not the only things that he analyzes:

1. Has the company consistently performed well?
Sometimes ROE is referred to as "stockholder's return on investment." It tells the rate at which shareholders are earning income on their shares. Warren Buffett always looks at the return on equity (ROE) to see whether or not a company has consistently performed well in comparison to other companies within the same industry. ROE is calculated as follows:

= Net Income / Shareholder's Equity

Just having a high ROE last year isn't enough. The investor should view the ROE from the past five to ten years to get a good idea of the historical growth.


2. Has the company avoided excess debt?
The debt/equity ratio is another key characteristic that Warren Buffett carefully considers. Buffett prefers to see a very small amount of debt, which means earnings growth is being generated from shareholders' equity. The debt/equity ratio is calculated as follows:

= Total Liabilities / Shareholders' Equity


This ratio indicates the proportion of equity and debt the company is using to finance its assets, and the higher the ratio, the more debt--rather than equity--is financing the company. A high level of debt compared to equity can result in volatile earnings and large interest expenses. For a more stringent test, investors sometimes use only long-term debt instead of total liabilities.

3. Are profit margins high? Are they increasing?
The profitability of a company depends not only on having a good profit margin but also on consistently increasing this profit margin. This margin is calculated by dividing net income by net sales. To get a good indication of historical profit margins, investors should look back at least five years. A high profit margin indicates that the company is executing its business well, but increasing margins means that management has been extremely efficient and successful at controlling expenses.

4. How long has the company been public?
Buffett typically considers only companies that have been around for at least ten years. As a result most of the technology companies that have had their IPOs in the past decade wouldn't get on Mr. Buffett's radar. It makes sense that one of Buffet's criteria is longevity: value investing means looking at companies that have stood the test of time but are currently undervalued. Never underestimate the value of historical performance, which demonstrates the company's ability (or inability) to increase shareholder earnings. Do keep in mind, however, that the past performance of a stock does not guarantee future performance--the job of the value investor is to determine how well we can trust that the company has a capacity to perform as well as it did in the past.

5. Do the company's products rely on a commodity?
Initially you might think of this as a radical approach to narrowing down a company, but Buffett tends to shy away (but not always) from companies whose products are indistinguishable from competitors, and those that rely solely on a commodity such as oil and gas. He does not put his money into companies that rely on the price of an underlying commodity. If the company does not offer anything different than another firm within the same industry, be wary as a value investor.

6. Is the stock selling at a 25 percent discount to its real value?
This is the kicker. Finding companies that meet the other five criteria is one thing, but determining whether they are undervalued is the key for value investing, and finding a company that is trading at a 25 percent discount is not always easy. To check this, we must determine the intrinsic value of a company by analyzing a number of business fundamentals, including earnings, revenues, and assets. A company's intrinsic value is usually higher than its liquidation value, which is what a company would be worth if it were broken up and sold today--the liquidation value doesn't include intangibles such as the value of a brand name, which is not directly stated on the financial statements.

Once Buffett determines this intrinsic value of the company as a whole, he compares it to its current market capitalization, which is the current total worth (price) of the entire company. If his measurement of intrinsic value is at least 25 percent higher than the company's market capitalization, Warren Buffett sees the company as one that has value. Sounds easy, doesn't it? Well, Buffett's success, however, depends on his unmatched skill in accurately determining this intrinsic value. While we can outline some of his criteria, we certainly have no way of knowing exactly how he gained such precise mastery over calculating value.


Conclusion
Well, as you have probably noticed, Warren Buffett's investing style, like the shopping style of the bargain hunter, reflects a practical, down-to-earth attitude. This attitude Buffett maintains toward also his lifestyle and overall philosophy on life: he doesn't live in a huge house, he doesn't collect cars, and he doesn't take a limousine to work. The value-investing style is not without its critics, but whether you support Buffett or not, the proof is in the pudding. As of 2003, he holds the title of the second richest man in the world, with a net worth of over $30 billion (Forbes 2003). If you choose to practice this kind of investing style, keep in mind that it takes time to do the proper analysis and to get good at it

What’s a good way to become a better investor?

Warren Buffett: Read everything you can. I read every book on investing in the Omaha Public Library. Fill up your mind with competing thoughts and decide what makes sense. Then jump in the water and start investing real money, rather than a paper portfolio. The difference between investing real money and is the same as reading a romance novel and actually dating. There’s nothing like experience. The earlier you start, the better.

I read a book when I was 19 that formed my framework ever since. You have to read a lot in order to be able to recognize which ones jump out at you—and then do some investing yourself.

Stocks having Strong Market Expectation

Reasons to Buy
1. Market has strong expectations for some stocks this may be due to strong earning potential of the strong earning potential of the companies.
2. Due to high market expectations some of the stocks are currently trading with high or reasonable PE ratio.
3. High PE for stronger growth potential stocks is not considered as negative.
Such stocks may provide 40 to 50 or can go till 60 percent returns in 12 to 18 months.

Sr.no.        Stock                 CMP
1.        Sterling Biotech Ltd   Rs.161.05
2.        Idea Cellular Ltd      Rs.103.90
3.     RICO Auto Industries Ltd  Rs.28.35
4.      GMR Infrastructure Ltd   Rs.156.45
5.          Siemens Ltd          Rs. 661.65

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Source "daytradingshares.com"

Stocks to Watch

Reasons to Buy
Following stocks are related to Power Cable manufacturer, Ceramics/Sanitary sector and Textile Industry
1. Posted good results in this year's first quarter results.
2. All sectors mentioned will be in high demand in future

Name of Stock           Current Price(Rs)        Target price(Rs)     Support Price(Rs)           Period
1. Diamond Power               353.05                  550                  300               12 to 18 Months
Infrastructure Ltd
2. Kajaria Ceramics Ltd        30.6                    50                   25               18 to 24 Months
3. Cera Sanitaryware Ltd       121.95                  190                  110               18 to 24 Months
4. Vardhman Textiles Ltd        119                    190                  100               18 to 24 Months

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Source "daytradingshares.com"

Keep a stoploss of Rs 220 in Orchid Chem: Gujral

Technical Analyst, Ashwani Gujral is of the view that in Orchid Chemicals and Pharmaceuticals one should keep a stoploss of Rs 220.
Gujral told CNBC-TV18, "Orchid is still consolidating its previous move, so I think with a stop of Rs 220 that can be traded back upto Rs 300 but all these depends really on whether the market is able to hold up that 4,530-4,550 zone, otherwise if we start falling back like we are doing right now I think all these moves will end by evening."
Disclosure:Analyst is long on Nifty but does not have any holdings in stocks.
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Source "moneycontrol.com"

Bombay Dyeing has support at Rs 600: Gujral

Technical Analyst, Ashwani Gujral is of the view that Bombay Dyeing and Manufacturing Company has good support around Rs 600.
Gujral told CNBC-TV18, "Bombay Dyeing is a realty stock it will be a high beta sort of a counter but it has good support around Rs 600 and on a market bounce you could easily get levels of about Rs 780."

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Source "moneycontrol.com"

Buy Unitech, DLF says Gujral

Technical Analyst, Ashwani Gujral is of the view that one can buy beaten up stocks like Unitech, DLF.
Gujral told CNBC-TV18, "You would buy any of the beaten up stocks something like Unitech, DLF because realty tends to bounce back in all of these bump ups. Try to get into these beaten up and you will probably do very well by evening."

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Source "moneycontrol.com"

NSE Portfolio Ticker by Manjunath G

Dear Friends,

After getting the comments, suggestions and appreciation on NSEGrabber, I was motivated to write another software for the benefit of investors/traders. This new software called "NSETicker".

Its a grid type software, in which you can add all your favourite NSE stocks and the data will be updated automatically after every specified time. After adding the stocks this software shows the following informations.

1. Company code.

2. Previou's day close.

3. Last Trade price.

4. Today's change (Rs).

5. Today's change (%).

6. Volume.

7. Day's High.

8. Day's Low.

Following are the major features available in this software.

1. Add your favourite stocks.

2. Save the portfolio and user settings.

3. Proxy setting.

4. Refresh Interval time settings ( the stock information will be updated every specified interval )

5. Delete the particular stock.

6. Ticker updates the value only during market hours (10am to 4 pm). saving of bandwidth during non-market hours.

Now let me explain about the usage of this tiny software.

First Screen:

As soon as you double click on application for the first time you will see a window like this. There is menu called "Options". Using this you can add your fav stocks, save the portfolio, general settings, proxy settings and Exit. Clicking on "Options" will show the different entries like in the below image.

Main Screen:

• Add Stock : Using this user can add new stocks to the portfolio.
• Save: Save the portfolio in to harddisk. here a file called ticker.txt will be created in c:\
• Proxy settings: user can change the proxy settings using this option.
• General settings: curretnly only refresh interval can be modify using this. by default, the refresh interval is 1 mints ( and its the minimum).

Add Stock:

By clicking on Options->Add stock, will pop up another window like this. In the combobox you can select which ever company code you want and click on "Done".

Main window with rows:

Clicking on Done will extract the data from the nseindia.com and displays the information in the row wise.

Delete option will be enabled after adding any new row and using this user can delete the specific row.

Proxy Settings:

This feature will be used for those who are behind proxy server. People like me who sits in office behind proxy server can specify the proxy address and port number and click on Ok.

This is required to extract the live data from NSEindia.com

General Settings:

Using this user can specify the refresh interval time. By default, the value is 1 mint( this is the minimum).

After every specified interval the data will be again updated with nseindia.com.

Main menu with all ur fav stocks

This is how it looks after adding all your favourite stocks .

Save:

User can save the portfolio by using Options->Save. By doing so the portfolio will be saved in the harddisk and the status message will be displayed saying "Saved the portfolio succesfully".

Refresh:

After the specified time of interval the data will be updated and the message will be displayed in the status bar like "Last updated on ...."

Btw, the data will be updated only during market hours. ie between 10am and 4pm. Due to this the software will not use any bandwidth during the non-market hours ( any way the data will be static after market hours)

Download the software here http://www.geocities.com/manjunath_govindaraju/NSETicker.zip

Comments, suggestion, appreciation and criticism.

As usual source code will be provided for the interested people. :)

warm regards

Manjunath G

manjunath.govindaraju@gmail.com

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Update 1:

Followng are the changes in the latest version.

• Color Indication added.
  Red - Negative
  Green - Positive
  White - No changes
• "Refresh" button added for manual reset (if you dont want to wait for specified time and wants the update immedietly)
• Improved the status messages.
• Fixed small bug ( before refresh was happening on ly between 11am and 4pm and now changed to 10am)

Download the latest version from http://www.geocities.com/manjunath_govindaraju/NSETicker_1.zip

warm regards

Manjunath G

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Source Code:

Here is the source code of the this small application. I uploaded the code in as-is format. If you find time or interesetd plz do add new features and let me know.

Dowload the souce code at http://www.geocities.com/manjunath_govindaraju/NSETicker_SC.zip


regards
Manjunath G
Manjunath.govindaraju@gmail.com
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Source: http://manjunathg.blogspot.com/2007/06/nse-portfolio-ticker.html

Do and Dont's For Stock Market Investments

This is the question probably every equity investor would have asked himself a number of times
What you Must NOT Do in Stock Market

* Don't panic
* Don't make huge investments
* Don't chase performance
* Don't ignore expenses
* Don't panic

What You Must Do in Indian Stock Market

* Don't panic
* Get Rid of the Junk
* Diversify
* Belive in your Investment
* Stick To your Strategy

Source: http://www.sharetipsinfo.com/

How to earn in Bullish stock market.

1. Always remember this is your hard earned money not anyone’s. So you have to take care of it and be cautious at every level, if you are taking calls from processionals then also.

2. Always follow Indian stock market.

3. When market falls, don't panic, when market zooming don't be overjoyed as you can earn and loose both ways around.

4. If market goes up you first buy and then sell and if Indian stock market goes down, you first short and then buy.

5. Never hesitate to ask for professionals advice.

Source: http://www.sharetipsinfo.com/ Please Visit here for more tips

Basic Rules of Stock market

1. Whenever market is high it will fall soon.

2. Whenever market is low ,if there is no external factor then it will rise.

3. Same rules applies to stocks scripts also.

Everyone say's that when market is high we will invest in shares , as doing intraday trading is risky. However we say that when market is going high investment is not that safe as it doesn’t make any point blocking your money when SENSEX and NIFTY are already zooming high. Wait for correction to come and then buy at lower price. Till the time stick to intraday stock trading.

Best time for investment - when market is down, though by keeping fundamental’s in mind.

Best time for intraday trading - Everyday is best day for it. Condition being some professionals are assisting you with there analyzes of stock market.


Source: http://www.sharetipsinfo.com/ Please Visit here for more tips

Some Tips From the Experts

General Market Advice:


1. Never chase a stock.


2. Buy when markets are in the grip of panic.


3. Only buy fundamentally strong stocks, which are undervalued.


4. Buy stocks grown in top line and bottom line over the past years.


5. Invest in companies with proven management.


6. Avoid loss-making companies.


7. PE Ratio and Growth in earnings per share are the key.


8. Look for the dividend paying record.


9. Invest in stocks for sure returns.


10. Stocks have been the high yielding asset class over the past.


11. Stocks are an asset class.


12. The basic property of any asset class is to grow.


13. Buy when everyone is selling and sell when everyone buys.


14. Invest a fixed amount each month.


Source: http://www.sharetipsinfo.com/ Please Visit here for more tips

Hello Get Tips and Tricks

Hello all you will get good amount of tips, tricks, suggestions, forecasts to invest in the share market so that you can get more information on shares you want to invest. Here you can get Daily forecasts at this site or even in your email account's inbox if you subscribe for the updates on the top of left side. So you will get more details about share market so as to invest with more care as it is one of the risky market which can turn any side anytime so just keep visiting this site daily and keep getting new tips and tricks and forecasts to invest in share market