Many of you had picked up NCL Industries on my recommendation on June 25th and are getting a bit frustrated that the stock is almost at the same level and not moving.
My call on June 25th: "Our quest for good stocks with huge potential and also under-valued at the same time is difficult and at times frustrating. This week however I came across a hidden gem that fits all these parameters and will shine with splendour in near future. Buy NCL INDUSTRIES (NSE: NCLIND) at 33-34 for a 1 year target of 56 (+64%). Very strong financials, under valued (P/BV only 0.86). Used to trade at 80+, two years back. No change in financial strength and profit in these 2 years. This should gradually move back to its old value levels because the company's profits are unchanged and they are commissioning their capacity expansion shortly."
Why is it not moving: Probably because it could not show a good profit for the June quarter; in fact, it posted a minor loss on account of an one-off depreciation expenses. Some are of the opinion that the Telangana issue may be weighing iit down and it will be moving only after the political environment cools off.
Current Outlook: Fundamentally a good stock with history of good performance. Pays dividend regularly. Under-valued with book value near 40. The stock should really be at the levels of 42-45. It will take some time to take off.
And it will not go down below 32. Currently at 33.4 AGM for dividend payment of Rs 1 per share will be held on Sep 30. The stock should move back to around 37-38 in 2 months and still remains to be a multi-bagger.
My hold time of 1 year for the stock remains unchanged and I am still positive on a target of 53. But those who are getting impatient can move out with minor loss or profit.
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