Turnarounds : some opportunities

Originally Posted by Agilent

There u r Ashish...

will give u my views on Polar soon

(Thanks by the way for that advice on tax)

AGILENT

Originally Posted by aca_trader

Keep an Eye on PolarInd for a turnaround provided they play the cards correctly NOW. The appreciation in stock may come earlier though, may be in a few months. Sorry, can't provide the logic behind fundamental call.

Technically, the stock is moving in a wide downward channel and has right now started a upward journey after making lower pivot with price moving above adaptive MA. Chart Attached.
Best Regards,
--Ashish

Originally Posted by Agilent

Ashish
Polar had a poor FY 05-06 (see attachment)

But maybe the worst is over for them (and, besides yr TA assessment, u seem to have info abt their current working / outlook when u say they are turning around... am I right ?)

Pray tell us the full story

AGILENT

Originally Posted by Agilent

Hi all

It is well known that turnarounds present great capital gains opportunities, as do companies witnessing sharp growth in profitability.

Here are some possible turnaorund scrips, identified from diverse sources including TA, and some from 'smoke' (as in ... theres no smoke without fire)

Will welcome informed views/info which could confirm that these cos are indeed turning around ... and where possible... pl give insights into how their resp business models are improving to enable the turnaround.

And yes, I do have positions in some of these scrips, and thats the reason I am trying to get more info from informed sources , many of whom will be on this forum

- Madhya Desh Papers, (Icici code MADDES)
- Nirlon
- Nocil
- Nagarjuna Fertilisers
- Mangalam Timber


Also , will someone pl tell me why Teledata is priced at a PE of below 1.5 ? And what's its outlook ?

Finally , I welcome others to post their own turnaround reccos. Remember, some of them can easily outperform markets, hence will be good hedges during bearish markets (which can again descend upon us ... who knows)

Thanks

AGILENT

Originally Posted by jdm

hi agilent,
no problem with the folks out here, only the very nature of these "turnaround" stories that might kept people (i was also in the list before this post) out of the discussion.

coming to your list i can say a few words about one company (i do not name it, i hope you understand)

the script was a turnaround story and was recommended when prices was hovering above Rs.30 (ahh i gave you a hint) by the research cell (it was a fundamental pick) of the broking house in which i used to work. but then prices never picked up. now in a meet we caught up with the analyst who in turn said, theres nothing wrong with his analysis. the problem lies elsewhere. the promoters have started playing. he further emphasized that the company shares an office in the same building where the headquarters of our company is located and on this ground he knows some of the guys in the company (some of them is also our clients) who has further confirmed about the playup story by the promoters. sadly its true for 99.99% of the turn around stories.

the main problem with identifying turnaround stories is, once one identifies such stocks, rather i say, once one get the news of that turnaround story the market already discounts all such news.

the problem is, one needs to identify them when the market has not already discounted them. sadly TA is probably not the right approach, atleast doesn't works for me. one has no option rather than going the fundamental way. but then also the problem is, even in this age of information, very little material is found about those companies (they only come up with those flashy Balance Sheet only after prices has peaked out ) take modi olivetti for example, the company got delisted in 1997. now it is back again in the bources (got relisted in 2003) in its new avatar as Spice Ltd. and is said to be the new turnaround story. now with no records for so many years in between, where do one go?

i can give you a couple of methods which i follow while i pickup those future turnaround stories, provided theres no news in the media about that company and significant price built up has not taken place (now i agree the last part is very relative. normally a price appreciation of more than 50 times from its low is not uncommon but then a price buildup of 10 times from its low might look expensive, but then ....... as i say very relative)

the dividend payout method.
the most common method is when a company starts paying dividend after a long lull. suitable example will be hanil era textile. the company after a long lull paid its maiden dividend in 2003. pitti laminations can also be a similar example.

the niyat factor ( the motive factor and not nyet as we say in russian )
one cannot ignore the factor that the Indian market is infested with shady promoters, who not only raises money though IPO, debenture or/& FD's from the common public but also from the institution, and then they square up the books and refer their company to the BIFR or simply disappears leaving everyone in a lurch and adding to the list of vanishing companies in the books of Sebi.

now my lookout is for those companies who even during their tough times kept their commitments. take ISSAL (after restructuring trading as ISMT Ltd at BSE) for example. the company was going though a very bad patch. but even then, it honored paying interest to its debenture holders @ 18% till the debentures got redeemed a couple of years back. no mean task honoring 18% in todays time. and just see how the company performed. after a bit restructuring a year back the stock prices zoomed.

well i am neither a statistician nor a engineer (just a drop out ) and these methods may not be perfect examples, but then thats how i read the market. just some arbitrary thoughts.

cheers,
jdm.

Originally Posted by Agilent

Hi all
10 k members .. and not even one has anything to say abt NOCIL, NIRLON, Mangalam Timbers

Cmon folks .. these are very much names from hamara hindusthan , and not from Mars

Surely at least a couple of you would have some info, or views ?

Pl share

AGILENT

Originally Posted by jdm

coming to your list i can say a few words about one company (i do not name it, i hope you understand)

the script was a turnaround story and was recommended when prices was hovering above Rs.30 (ahh i gave you a hint) by the research cell (it was a fundamental pick) of the broking house in which i used to work. but then prices never picked up. now in a meet we caught up with the analyst who in turn said, theres nothing wrong with his analysis. the problem lies elsewhere. the promoters have started playing. he further emphasized that the company shares an office in the same building where the headquarters of our company is located and on this ground he knows some of the guys in the company (some of them is also our clients) who has further confirmed about the playup story by the promoters. sadly its true for 99.99% of the turn around stories.

Originally Posted by jayzarna

For a total newbie, where and how does one start building up a sound base on fundamental analysis. With all the rumors, shady operators and what have you, is it then best to stick to the blue chips for a conservative investor. If one does play midcaps or these special stories, what are one's options.

You make interesting reading, and I liked the neither statistician nor engineer part. I did Statistics but am trying to figure out what and where to use it as far as stocks are concerned.

Thanks once again..but are not some of these companies good companies like Nagarjuna or Nocil?

Jayesh

Originally Posted by amitt29

I agree with Joydeep for most of his thoughts(infact 99%) but for the last.Markets are easier place to make money but not like trading on a friday and partying on Saturday.Whether trader or investor u must have
1)Discipline,and a pretty strong regimen.
2)Try to study as much as possible b4 entering and even if it means sacrificing somethings,I personally shut myself for 6 months form the world,friends.And believe me it pays.And one more thing if u r good at technicals,its my belief(that since pictures speak a thousand words,u will get better in FA too,it will come to you)
3)Most difficult part,we hear a lot abt noise(while trading/investing),but after learning and while learnin u have to filter what u want to learn.
4)Flexibility in ur ideas and a hawk eye.
Theres no newbie and veteran in the markets,all are players on the field andeach one is alone against a team.
These are my observations.

Regards
Amit.