FIRE on FACOR ALLOYS

Dear Mohan Bhai,

I appreciate your concern. It is true that these PENNY STOCKS are somewhat risky. But, in case of FACOR ALLOYS, the story is really different. Th ecompany is in recovery path. Search the net. You will get their Financial statement. I can remember about their JUNE QUARTER performance, where the PAT has jumped 139%. One of my friends is with the company at Shreeramnagar, AP - who also told me not to worry about the future of FACOR ALLOY. You must appreciate that by seeing one or two days' price - one share cannot be predicted. Just see today's volume and price !!!! I would suggest you to purchase this stock for a handsome gain - still time is left. Best of luck.

Dear Neel Bhai,

I am not against/for FACOR ALLOYS. I am just curious (and now intrigued) about the company. I checked the June Qtr results. PAT up 139% and Sales down 36% !?! Also the PAT increase is on a small base of 2.56 Cr.
I agree that if BIFR is looking into restructuring the co., then it may recover.

From 16.35 on 30th Aug 05, the price has constantly fallen to todays close of 4.23. Thats 287% down in 3 months. So its not about seeing 2 days price movement. And ah! volumes. Todays volumes are 1.6 million. Out of which, there was one block deal of 1 million. And in terms of turnover it is 1.6m x 4.23 = 6.7 million. Thats not a big amount. Single entity can do that much trading in a day.

Lets forget all this for a while. If you are really suggesting me to invest into this co, then I think you should provide a rationale for it. Please answer the following qs -

1. How fast is the company growing? Can you give us a topline/bottomline CAGR figures?
2. Profitability of the company? Any growth in OPM%?
3. What competitive advantage does the co's products/service have over its peers? (market share, Export component of revenues, price leadership etc.)

4. What are the support and resistance levels for the stock?
5. What are the short term / long term targets? Atleast some EPS guidance?

In nutshell, if the co is really going to do well and give good returns then we will all buy. It is in the best interest of all of us here to know the reasons why you think we should invest. I dont think that just becasue BIFR has decided to ail the co is a reason good enough to invest in the stock.

Thanks,

Mohan

Hi Mohan Bhai,

I am overwhelmed by your warm response. Beleive me, I am searching a turnaround case in FACOR ALLOYS, and like many stocks in share market, it is also a probability. There are so many things tangential and intangential as well, in support ans also in against to my opinion. The price is not that much ! and, unlike so many fake companies in PENNY STOCK group, this company is EXISTING and regularly producing High Carbon Ferro-Chrome and Bye-products. Why not to take a chance ? Do you get my point Boss ? Love.

Neel

Dear Mates.......

So many negative remarks flooded with FACOR ALLOYS in this thread...but, inspite of all these ... this share goes on ascending very steadily. Both price and volume is moving up as our expectation. Wait for a good rally on this counter soon........

Dear Neel,

Why inspite of these negative remarks is the stock increasing in price and volume steadily? Do you know that?

Thanks,

Mohan

Hi Mohan,

Now its increasing daily. But I am worried coz no one can say when it will start to walk in opposit direction. I appraised you have gone thru the company position but when we purchased it was not so bad. Now I am thinking that it can go little more up and on that stage we should sale. What's your opinion.

Regards,

Amit

Hi Amit,

Small caps are the first to fall when market falls. And they fall the hardest. Sensex is at 9400. The markets are over valued.
On fundamental front, it looks like a BIFR turn around story. These things take time.

Thanks,

Mohan

Mohan Bhai,

Your feedbacks are really good. This is true that the penny-stocks will crush harder with the fall in sensex. i also think that the market is over-valued and another correction of a big order is on the way. But, from my earlier experiences, I have seen that with the down-slide of the sensex, most of the operators and other entities are going for the penny stocks leaving the heavy weights.
As regards FACOR ALLOYS, it is obviously a BIFR-come-out case and a Turn-around-case as well. i AM ADDING BELOW THE RECENT DEVELOPMENTs in turning around this company. This is extracted from THE HINDU BUSINESS LINE (May 19 2005) :

"FOLLOWING the directives of the Board for Industrial and Financial Reconstruction (BIFR) through the recently sanctioned restructuring package, Ferro Alloys Corporation Ltd (FACOR), the Rs 208-crore ailing ferro alloys major, has initiated steps towards demerging itself into three independent entities.

According to a FACOR senior official, the ferro alloys division consisting of plant at Garividi in Vizianagaram, Andhra Pradesh would be transferred to a new company being formed in the name of FACOR Alloys Ltd (FAL) with registered office in Andhra Pradesh.

The company's steel division consisting of steel melting and rolling plants located at Nagpur in Maharashtra would be transferred to a new company being formed in the name of FACOR Steels Ltd (FSL) with registered office in Maharashtra.

The company's charge chrome division consisting of charge chrome plant and mines in Orissa would remain with the existing company, FACOR, official told Business Line.

The company has also initiated steps towards splitting the equity share capital among these three entities as per the restructuring scheme cleared by the BIFR.

The existing paid-up equity capital of Rs 20.35 crore would be split among FSL, FACOR and FAL in the ratio of 20:40:40.

This results in FAL having a paid-up equity of Rs 4.07 crore, and FACOR and FAL Rs 8.14 crore each.

According to a FACOR official, the company was advised to split up shares in respect of shareholders holding equity shares of the company as on the record date, July 1, 2004.

After the split, the existing promoters' group along with the Switzerland-based joint venture partner, AOA Securities Anstalt, will pump in funds in the form of equity to the tune of Rs 54.62 crore as per the restructuring scheme.

The Swiss partner proposes to hold 50 per cent equity in FACOR, FSL and FAL.

Following the induction of fresh funds, the paid-up equity of FACOR would go up to Rs 18.61 crore, that of FAL to Rs 19.59 crore and of FSL to Rs 20.65 crore.
As part of the scheme, the company proposes to sell its five diesel generator sets aggregating 50 MW at a cost of Rs 39 crore and utilise the proceeds to reduce institutional outstanding.
Further, the company proposes to sell its 30MW captive power plant at Garividi for Rs 19 crore and the 20 MW captive power plant located at Ranida in Orissa for Rs 18 crore.
The company expects to get an additional of Rs 2.75 crore through sale of miscellaneous surplus assets, the official said."

All these have made the company VIABLE - and the share price is reflecting this. See the volume trades also. If the sensex supports, wait till the scrip crosses Rs. 13.50 !!!!!!
Best of luck.

Volume in the positive territory is increasing everyday. This is a very good sign for growth. The METAL stocks are in high demand. My bet still is FECOR ALLOYS. Don't wait further mates. Go for the scrip.

Hi,
Now it is increasing on daily basis. Whst you think. I think we should wait for a week and it we get our cost we should move out. Pls revert.

Regards,

Amit Goyal