Stock Tip: SKM EGG PRODUCTS: A great consumer product waiting for a big run – the next Jubilant !!

SKM Egg Products Export Ltd( listed at NSE only )

Price : Rs 153 Date: 30th Jan 2015

Target: Rs 350                        Time Frame: 3 years

SKM Egg products exports is in the business of processing eggs, convert them into powder and liquid and exports them to developed countries. The end user industries are Global bakery companies and companies making all bakery products. The company’s products are well accepted and have got food quality approvals from the European union and other markets. The company procures and processes 1.8 Million eggs per day, yes per day. This is a massive scale and is a big moat. All the people who travel abroad know how the western world cannot live without bakery products. They consume it in all the meals. So, the demand is going to be robust and is recession proof. See the company’s fundamental below.

Return on Equity ( TTM till Dec 14 ) : 46.5%	RoCE ( TTM till Dec 14 ) : 55%
Sales ( CAGR last 3 years ): 29 %	Net Profit Growth ( CAGR last 3 years ): L to P
Net Working Capital Cycle (13 – 14 ) : 37 days	Operating cash flow ( last 3 years ): 45 Cr
EPS CAGR Growth ( last 3 years ): L to  P %	Current P/E ( TTM ): 19
MCap to Sales ( TTM ): 1.47 Times	MCap to Operating Profit ( TTM ): 9.4 Times

The company had a RoE and RoCE of less than 20% till Sep 14 quarter but moved to more than 45% due to the excellent Dec 14 quarter result. The company TTM PE is 19, does not look cheap. But the MCap to Sales TTM ratio is just 1.47 times and the MCap to Operating profit in just 9.4 times which are very cheap. The EV to ebitda will still be more attractive.

BUY IT BEFORE OTHERS AS IT IS GOING TO MOVE UP LIKE JUBILANT.

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Disclaimer: I will have an interest in the stock

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Stock Tip: MT Educare Ltd: A simple but great compounding business and opportunity

MT Educare( listed at NSE & BSE )

Price : Rs 117.65                Date: 23rd Jan 2015

Upside: Rs 230                 Time Frame: 3 to 4 years

MT educare is in a simple business of coaching school students, CA classes and IIM entrance examination. For the last 8 years, the company has been consistently increasing its sales and profits. With the Indian demography, the demand shall be growing steadily. See the company’s fundamental below.

Return on Equity ( 2013 – 14 ) :   20.4 %	Return on Capital employed ( 2013 – 14 ) : 30 %
Sales ( CAGR last 5 years ): 20 %	Net Profit Growth ( CAGR last 5 years ): 53 %
Net Working Capital Cycle (13 – 14 ) : negative	Operating cash flow ( last 3 years ): 55 Cr
EPS CAGR Growth ( last 3 years ): 32 %	Current P/E ( TTM ): 17.27
MCap to Sales ( TTM ): 2.47 Times	MCap to Operating Profit ( TTM ): 9.4 Times

The company has a very good RoE and RoCE. Most importantly the company has a negative working capital cycle as it collects part of the fees as advance. The company is cash rich. The company has more than 130 coaching centers in India and growing which is a big moat. FIIs have more than 10% shareholding with very little DII stakes. Valuation are very attractive with the MCao at just about 9 times its OP. The EV to ebitda will still be more attractive.

BUY IT BEFORE OTHERS AS IT IS GOING TO BE A STEADY 25% COMPOUNDER LIKE HDFC BANK/HDFC. When DIIs start buying, it will surge.

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Disclaimer: I will have an interest in the stock

Feel Free to comment your views on this stock 

Follow me at Twitter: @rvetri

www.stocks2brich.blogspot.com

www.a1moneytips.blogspot.com

Kuantum Papers: for > 50% gains as positional trade

Kuantum Papers Ltd: A Terrific value buy

Kuantum Papers Ltd ( listed only at BSE )

Price : Rs 88        Date: 16^th Jan 2015

Upside: 50% to 100%      Time Frame: 6 Months to 1 year

Kuantum papers is a very decent paper manufacturing company with sales and profit growing at 16% and 22.33% in last 3 years. It has a very good RoE of 36.30% and RoCE of 21% and with a good working capital cycle. See the company’s fundamental below.

Return on Equity ( 2013 – 14 ) :   36.30 %	Return on Capital employed ( 2013 – 14 ) : 21 %
Sales ( CAGR last 4 years ): 16 %	Net Profit Growth ( CAGR last 4 years ): 22.33 %
Net Working Capital Cycle (13 – 14 ) : 33 days	Operating cash flow ( last 3 years ): 157 Cr
EPS CAGR Growth ( last 3 years ): 22 %	Current P/E ( TTM ): 2.3
MCap to Sales ( TTM ): 0.16 Times	MCap to Operating Profit ( TTM ): 1 Time

The striking undervaluation is that the current market cap is just one time its Operating profit and just 2.33 times its Net profit for FY 2013-14. This undervaluation is a great opportunity to have a positional trade to make a 50 – 100% gain in the next 6 – 12 months

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Disclaimer: I will have an interest in the stock

Follow me at Twitter: @rvetri

www.stocks2brich.blogspot.com

www.a1moneytips.blogspot.com

R S Software : A value pick and get rich Indian stock

R  S Software - an Indian multi bagger stock
Price: Rs 551.60 ( 29th Dec 2014 )      Target: 3 bagger by 2017

Area of operation: Building Software for the e-Payment industry. Vast potential to scale up
Look at the impeccable track record in the past.

Return on Equity ( 2013 – 14 ) :   36.40 %	Return on Capital employed ( 2013 – 14 ) : 53.4%
Sales ( CAGR last 3 years ): 23.2 %	Net Profit Growth ( CAGR last 3 years ): 36.40 %
Net Working Capital Cycle (13 – 14 ) : 30 days	Operating cash flow ( last 4 years ): 101 Cr
EPS CAGR Growth ( last 4 years ): 36.40 %	EPS ( TTM ): 48      Current P/E: 11.47
MCap to Sales ( TTM ): 2 Times	MCap to Operating Profit ( TTM ): 7.7 Times

A steady growth company in the sunrise sector with its market cap at only 7.7 times its operating profit. With healthy RoE and RoCE and good cash flows. A take over target by any of the IT major is a possibility. Grab it

Disclaimer: I will have a vested interest in the stock

Feel Free to comment your views on this stock  

Follow me in Twitter: @rvetri