Dear friends,

I used to make regular posts in KASHIWALA.BLOGSPOT.COM. But for the last several months there was some difficulty in accessing the site, probably due to wrong input of password etc.

The above problem has been sorted out. Now I propose to have regular posts.

Kindly go through the same.


(AJAY SINGH RATHORE)

KASHIWALA

Dear friends,

I used to make regular posts in KASHIWALA.BLOGSPOT.COM. But for the last several months there was some difficulty in accessing the site, probably due to wrong input of password etc.

The above problem has been sorted out. Now I propose to have regular posts.

Kindly go through the same.


(AJAY SINGH RATHORE)

KASHIWALA

DCW LTD. : BSE CODE 500117

DCW IS A DIVERSIFIED manufacturer of basic chemicals, such as:
Caustic Soda, Liquid Chlorine and Chlorine based products such as Trichloroethylene and HCL : Upgraded Ilmenite or Synthetic Rutile
Yellow Iron Oxide , PVC Resin, Soda Ash, Ammonium bi-carbonate
Liquid Bromine and Bromide.

IF YOU ARE READING THIS IN KASHIWALA’S SITE, IT IS ORIGINAL, OTHERWISE IT IS PIRATED.

The company is in existence from 1925 and was earlier known as Dhrangadhra Chemical Works, with plant in Dhrangadhra, Gujarat. The company has come a long way since. The name of the company has been changed to DCW Ltd. and now the company has plants in Gujarat and Tamil Nadu.

The company has a share capital of 39 Crores made up of equity shares of FV of Rs.2.00 each. The company has reserves of over 269 Crores, thus making it a bonus candidate in another 2-3 years.

Promoter’s group is holding 40% shares. Institutions including FIIs are holding about 17% shares and balance is held with the public.

The company has during the year 2007, issued equity shares to FIIs and Promoter Group Companies, at Rs.10.00 premium, viz. Rs.2.00 + Rs.10.00 = Rs.12.00.

The company is consistently in profits and is also paying dividends. The share price of the company touched 52 week low on 16.09.2008.

In my lessons on fundamental analysis, I had stated the following factors to be considered for picking up shares.

1. The company should have regular profits and cash flows.
2. Placement of shares to promoter groups or FIIs at premium is good.
3. At some point of time, a well performing company may touch year’s low.

DCW has qualified on all these fronts. Considering the factors, one can consider picking up DCW shares for a reasonable expectation of 20-25 percent capital appreciation in 12 months.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.



KASHIWALA

FOLLOW UP ARTICLE : MUTUAL FUNDS

MUTUAL FUNDS :

Several months back I had posted an article How to create wealth using Mutual Fund Route. Many people e-mailed that they had already started SIPs in schemes like Magnum Contra, Franklin Bluechip etc. Few persons who had started investing in Magnum Contra stated that they are seeing falling NAVs and are apparently worried. No one needs to worry for the following reasons.

IF YOU READING THIS IN KASHIWALA'S SITE, IT IS ORIGINAL. IN OTHER SITES, IT IS PIRATED.

a. Our own near and dear ones are investing in Magnum Contra SIP @Rs.3000.00 per month and our highest NAV purchase price was Rs.39.00 and lowest was Rs.23.50. In the meantime, we have received a dividend of Rs.4.00 per unit.

b. My advice to people is to invest at least for seven years in Dividend reinvestment option (more if you can) and wait for 3-4 years more.

c. Try to aim at a corpus of at least 15000 units or 20000 units within this time. Do not count your investment in Rupee value, rather count in in terms of number of units.

d. When the NAV is low, you get more units. When the NAV is high, you will get more dividend which will be ploughed back as further investments.

e. After a period of say, 8-10 years, if you have achieved your goal of 20000 units (suppose), convert it into dividend pay out option. Even if the fund pays a dividend of Rs.6.00 per unit, you will get Rs.10000.00 per month (Rs.120000.00 per annum). Presently when the NAV was around 29 during the years 2006 and 2007, the fund paid a dividend of Rs.4.00 per unit.

f. Finally, do not be perturbed by the falling NAV. This will help you indirectly by bringing more units into your kitty. Continue your SIP. Those readers who have not started any SIP, may start now with at least 3000 to 4000/- per month with a clear cut aim of at least 20000 units in another 7-8 years time.

g. The positive factor in the overall mutual fund industry is that they are sitting on a pile of cash and are making selective investments. So, their own investments will get averaged and we can expect better times ahead.

h. Last but not the least, have a positive view of the market and your investments. In the long run, nothing will go wrong.

IF YOU READING THIS IN KASHIWALA'S SITE, IT IS ORIGINAL. IN OTHER SITES, IT IS PIRATED.

Good luck.

Kashiwala

REGULAR POSTS

DEAR READERS,

I have not been making any posts for the last several weeks, due to professional and family pre-occupations. There were some bereavements in the family circles as also some health related problems.

I will be starting regular posts in the near future. I thank readers who have been sending me e-mails regularly.

Kashiwala

REPLIES TO QUERIES

1. Delivery Percentage :

There is no calculation for delivery percentage. This can be obtained from BSE Site or NSE Site at the end of the day. In case of shares placed in T Group, all transactions should be delivery based. Therefore, the delivery percentage is obviously 100%. In other cases, this percentage may vary depending on the type of share, share capital, volumes traded etc. In shares which are in F&O segment, there are no circuit limits. Here the delivery percentage tends to be on a lower side with more fluctuations. This is a haven for day traders.

In companies like SBI or other big companies, a delivery percentage of above 30% on any day may indicate accumulation and there are days when the percentage remains less than 15%. Here Day trading is a factor. In small companies a delivery percentage of over 60% may show accumulation and a smaller percentage of 25% or so or even less, may show day trading.

The moot point I was trying to convey is that, when the M factor increases sharply and the delivery percentage remains on a lower side, this indicates increased operator activity (day trading) and it is advisable to book partial profits on any such steep rise. Of course, this comes in practice and keeping a keen watch on the markets.

If you are reading this in Kashiwala's site, it is original. In other sites, it is pirated.

PE RATIO
PE ratio is the share price prevalent in the market divided by the eps. EPS is the net profit divided by number of equity shares. While EPS is a simple arithmatic calculation, PE ratio is a bit complicated as there are no hard and fast yardsticks. EPS is more of a fundamental based study, but PE may have to do more with technicals.
Now Cement Companies are not faring very well due to various factors so the markets are not paying much attention to the shares. A recent example in PE ratio anomaly is Ranbaxy. It is stated that it is being traded at over 40 PE and the increase in price is mostly news driven, due to acquisition of a stake by a Japanese Firm. Other Pharma firms may not be commanding the same PE.

Rather than PE ratios (which are mostly driven by market mechanics and technicals), it is worthwhile to look at the book value and price to book value ratio. If the ratio is much lesser than one (price is less than book value) and there is consistent profitability, it is safer to enter the scrip.

Comments will be welcome.

Kashiwala

NAVNEET PUBLICATIONS

NAVNEET PUBLICATIONS LTD: BSE CODE 508989
NAVNEET was floated by the NAVNEET Group of Companies managed by Gala Family Members who have an enviable reputation of over 46 years in the field of Educational Books Publishing.
Since 1959, Navneet has been a major force in the dissemination of knowledge. NAVNEET is a dominant player in the field of educational books publishing, publishing more than 4000 titles every year in English, Hindi, Marathi and Gujarati.
In 1987, to further strengthen and consolidate the business of book publishing, NAVNEET installed ultramodern printing press at Dantali, District Gandhinagar, Gujarat. By 1991, sophisticated printing and binding machineries had been imported to complete the modernisation-cum-expansion plans of the company.
In 1993, NAVNEET installed machinery to manufacture paper stationery products at Vasai near Mumbai. The company also installed State-of-the-Art 'Note Book on-line' machine in 1995 at Daman. The operations at Daman have since been shifted to more specious factory at Silvassa.
Over the decades, NAVNEET has emerged as an educational products and services company in India. The company's products are sold under the 'Navneet', 'Vikas' and 'Gala' brand names.
NAVNEET's portfolio of syllabus based Books includes high quality books, supplementary books like Guides and 21 Question Sets among others in four languages, English, Hindi, Marathi and Gujarati. The company has a dominant market share in Gujarat and Maharashtra.
NAVNEET also produces various titles in the children and general books category, which are not based on syllabus, such as activity books for children, health series books, cookeries, mehendi,feng-shui etc.
The company enjoys leading position in premiere stationery markets in India, the Middle East, parts of Africa, U.S.A. and Europe. (Source Company Website)

If you are reading this in Kashiwala's site, it is original. In any other site, it is pirated.

The share capital is 19 Crores, divided into 9.5 Crore shares of Rs.2.00 each. The promoters of the Company hold 62% stake in the Company. About 15% stake is held by Financial Institutions/FIIs etc. The remaining about 23% shares are held by public. The company has substantial reserves of Rs.186 Crores as at March 2007. It is expected to be more by the time FY 2008 results are announced.

Since the company deals in text books etc. used mostly in schools, for obvious reasons, the profitability for Ist quarter, viz. April – June in any year is generally higher than any other quarter. Therefore, YOY results show a better comparison.

The share price was hovering between 70 – 80 for quite some time in Sept. 2007 to November 2007 and started climbing to reach a high of about 160 in January 2008. It is now hovering around 85 levels.

Conservative investors can add Navneet Publications to their portfolio at the current price of around 85 or so, with a clear expectation of 25-30% increase from the current levels in one year. On a longer term basis, with the book value over 10 times the face value of the shares, this could be a potential bonus candidate.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)

KASHIWALA