Graphite India & Ador Welding

Hello there....is anyone here tracking graphtie India and Ador Welding? Both seem to be compelling buys especially Ador. Esab a peer stock is trading 15x while both these are trading at 10x

Ador is 100% debt free company and expanding its business into gensets utlising exisiting resources.

Any views out there?

thanks

Hello vhg71,
I do not track Graphite India. However, Ador Welding seems to be testing patience of lot of investors since last several months. It had one bad quarterly financial result (perhaps quarter ending June 2006 or March 2006 -subject to correction). That is all. It was brutally kicked down from its peak of about Rs. 515/- all the way down to Rs. 220/- or so. Still worse, it has not been able to get its head up convincingly. Still langushing at or around Rs. 250 causing anguish to its shareholders. Most probably the performance of subsequent quarters have also been somewhat erratic. I donot know the exact reason for this sort of erratic performance. If anyone can throw some light on this, I shall be greatful to him.

As far its technicals are concerned, kindly go throgh its chart. I am unable to attach its chart as size of my chart file is in excess of 100 K. B. (permissible limit in this forum). It formed a head and shoulder pattern in between March 2006 to June 2006. Neckline was broken during June 2006. There was one pull back above this neckline, but that turned out to be a failure, with price collpasing below the neckline again. That effectively put the price target of about Rs. 190 to Rs. 200. It has touched the low of Rs. 220/- recently. Almost achieving the target. If you draw a trendline from the peak of Rs. 514, connecting its lower tops, it has recently overcome this downward sloping trendline and is currently in a pullback mode, i.e. it has retreated and now sliding along the earlier resistence line, which is now acting as supportline. It has not broken this trendline as yet. Volume on breakout none too inspiring. May be that is why, it has not gone in to an explosive upmove after the breakout of the resistance line.

Current year E.P.S. seems to be about Rs. 20/- if we are to extrpolate the quarterly earnings. Barring nasty surprises, it appears to be an appealing buy, provided one has tons and tons of guts and patience. E.P.S. of Rs.20/- discounts the current market price of Rs. 250/- about 12.5 times. This is certainly not an outrageous PE ratio for a good scrip like Ador Welding.

It is operating in a sector, which has got huge potential. Its credentials are also good. What I really want to know from other informed members is the reason behind erratic quarterly performance and stagnating bottomline.

I am aghast at the way the market has punished this scrip. After June 2006, many good midcap scrips have recouped at least 75% of their losses. But this one has been going only one way, down to the drain.

If some experts of this forum can supplement my comments or add a critical note to my comment, then I shall be glad.
R. S. Iyer

Ador's biz is closely linked to metal prices and my guess is that when metal stocks suffered this one went down too more so coz it is a midcap. now that metals have started looking up maybe this one will improve too. If you have time take a look at G.I. looks good too and steady performance. Target is 91 CMP 60
What is perplexing is that Esab looks a much inferior stock and it is trading at 15x