Moneylife

STOCK LETTER

Panther
Small-cap/low price stock

Monday, 27 October 2014

Volume 1, Issue 27
MARKET WATCH

Nifty, Sensex will struggle to make fresh highs

T
he S&P BSE Sensex closed the 100 points or 1.28%). The
Indices Change
week that ended on 23rd October at On Tuesday as anticipated, the government,
26,851 (up 743 points or 2.84%), index closed in the green after making a on Monday, BSE Sensex 3%
while the NSE’s CNX Nifty ended at recovery from the day’s low. Nifty closed announced that Nifty 3%
8,015 (up 235 points or 3.02%). Last at 7,928 (up 48 points or 0.61%) making it would auction
week, we had mentioned that Nifty might it the third consecutive day of gain. 74 coal-mining
try to rally. This week, the Indian stock According to Moody’s Investors licenses to private companies in the next
market opened with a gap on the back Service the Indian government’s decision three to four months. The government will
of positive data from the US and the to remove price controls on diesel and allocate government companies licenses
winning of Bharatiya Janata Party (BJP) in to raise natural gas prices, signals fiscal without an auction. This move is likely to
Haryana and Maharashtra assembly polls discipline and is a “credit positive” step, help power, cement and steel sectors.
helped build up the positive sentiments. although the overall impact could be Market on Wednesday moved higher in
On Monday, Nifty closed at 7,879 (up limited. line with the positive trend of US indices
on Tuesday and positive closing of most of
Money Flows
the Asian indices. Nifty closed at 7,996
(up 68 points or 0.86%).
FII Net Inflow DII Net Inflow
The market was open for a special
1,700 (Rs crore) 1,350
(Rs crore)
trading session on Thursday to mark the
1,070 920 start of Samvat 2071. Nifty closed at
440 490
8,015 (up 19 points or 0.23%).
Friday market was closed on account
-190 60 of on account of public holiday.
-820 -370 Stock: Although R S Software sales for
the September 2014 quarter fell by
-1,450 -800
5% over the year ago period while its
22 Aug-14 22 Sep-14 23 Oct-14 22 Aug-14 22 Sep-14 23 Oct-14
operating profit for the relevant quarter
The Nifty rose 3% this week. Both FIIs and DIIs were net buyers this week bringing in Rs1,067.64 rose by 14%. The board of the company
crore and Rs289.26crore respectively. has approved the payment of another
Market Valuation interim dividend of 15% for FY14-15.
The stock rose 3%. The board of directors
Nifty PE of AVT Natural decided on the closure
8,150
Grossly Overvalued
22x of AVT Natural Pte., Ltd., Singapore, a
Overvalued
20x wholly owned subsidiary, due to changed
7,020 Fairly valued
17x international market conditions, while on
5,890 Undervalued
15x
the other hand AVT Tea Services Ltd, its
4,760
Grossly Undervalued wholly owned subsidiary in the United
Kingdom has set up a subsidiary company
3,630
in the US, under the name AVT Tea
2,500 Services North America, LLC to cater to
Jan-08 May-11 Oct-14 the American market. Weak result pulled
the stock lower by 14%.
The current four-quarter trailing Nifty EPS as per NSE is Rs387. On this basis, the current Changes: There are no changes this week.
Nifty PE works out to 20.70. Unless earnings improve, the market is getting overvalued.

Disclaimer: Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and the information may be
incomplete or condensed. All opinions and estimates constitute our judgment as of the date of the report and are subject to change without notice. This report is for informational
purposes only and none of the stock information, data and company information presented herein constitutes a legally binding recommendation or a solicitation of any offer to buy
or sell any securities. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a
personalised recommendation to you. Individual stocks presented may not be suitable for you. Moneylife is a research and information company and not investment advisor. Please
consult an advisor about the appropriateness of your investment decisions.
 Moneylife
STOCK LETTER

Panther
Small-cap/low price stock

Monday, 27 October 2014

Volume 1, Issue 27

Company Business Comments

[email protected]@email.com
AVT Natural Products Industrial Intermediates Conservative management based in Kerala with decades of experience in the field

Adi Finechem Chemicals A small chemical manufacturer with low debt

Ador Fontech Industrial Intermediates Beaten down stock with great growth prospects if industrial growth picks up

[email protected]@email.com
Atul Auto Auto Focused presence in a growth segment, as 3-wheeler sales continues to boom

Avanti Feeds Farm & Farm Inputs Excellent growth over the next two years.

Goodyear India Auto Components Well-known tyre company, offering steady dividends

MPS [email protected]@email.com
Education Extremely strong growth and price rise in the last two quarters. But valuation still reasonable

Munjal Auto Inds Auto Components Business has been sluggish for two years which is why the stock is available at a low price

Munjal Showa Auto Components Business has been sluggish for two years which is why the stock is available at a low price

[email protected]@email.com
Orient Refractories Industrial Intermediates MNC with great prospect, low valuation and high return on capital

RS Software (India) Software & IT Services Small software stock with high return and low valuation.

Sun Pharma Adv Research Pharma Could be a jackpot thanks to the commitment of the management of Sun Pharma

[email protected]@email.com
Suven Life Sciences

Hexaware Technologies
Pharma

Software & IT Services

Lumpy earnings growth but is stabilising. High return on capital

Mid-cap IT stock with a good OP growth of 22% and RONW of 40%

MT Educare Education Conducts coaching classes for school and college as well as entrance exams. Strong RoCe
and reasonable valuation.

[email protected]@email.com
 Moneylife
STOCK LETTER

Panther
Small-cap/low price stock
Monday, 27 October 2014
Volume 1, Issue 27

[email protected]@email.com
Financial* Valuation** Return# Entered
MC/ RoE Current Performance
Av. Sales Av. OP MC/OP Date Price
Sales Price since entry date
Older stocks that can be bought now

[email protected]@email.com
1. AVT Natural Products 69.34 17.25 2.97 17.53 25% 25 Apr 14 27 39 49%

2. Adi Finechem 38.96 8.38 2.40 11.76 45% 25 Apr 14 114 300 164%
3. Ador Fontech 34.34 4.86 1.39 10.83 16% 25 Apr 14 68 103 51%
4. Atul Auto 106.01 10.99 2.09 21.79 37% 25 Apr 14 192 379 97%

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5. Avanti Feeds
6. Goodyear India
321.94
410.95
30.10
38.90
0.73
0.87
8.78
8.40
47%
25%
25 Apr 14
25 Apr 14
622
420
1,545
651
148%
55%
7. MPS 46.70 15.54 5.68 17.40 59% 25 Apr 14 383 611 60%
8. Munjal Auto Inds 209.72 16.58 0.61 7.41 26% 25 Apr 14 54 113 109%

[email protected]@email.com
9. Munjal Showa
10. Orient Refractories
406.97
102.36
27.38
19.82
0.42
2.60
5.73
14.14
19%
39%
25 Apr 14
25 Apr 14
90
61
184
94
103%
54%
11. RS Software (India) 90.09 20.95 2.37 9.02 37% 25 Apr 14 221 670 203%
12. Sun Pharma Advanced 40.58 4.80 32.00 — 8% 25 Apr 14 152 194 28%

[email protected]@email.com
13. Suven Life Sciences 130.37 54.12 3.98 10.48 56% 25 Apr 14 84 193 129%
14. MT Educare 46.07 10.05 2.94 18.12 23% 01-Oct-14 149 140 -6%
Older stocks to avoid now ( does not mean exit; Hold not Sell)

[email protected]@email.com
1. Hexaware Technologies 255.88 96.36 5.90 17.32 38% 27-Jun-14 157 187 19%
* 5 quarter average (Rs crore) ** Based on latest quarter (annualised), MC- Market Cap #Return on Equity (based on net profit of previous 4 quarters)

Operating Profit - profit generated in the normal course of business (for companies other than bank and NBFCs); arrived at after deducting operating expenses
(excluding depreciation and interest) from sales. For Banks and NBFCs, operating profit is arrived at after deducting operating expenses (excluding depreciation) from
total income and net revenue respectively.
Valuation - ratio of market capitalisation to sales or operating profit. Low ratio is better.
Market capitalisation - recently traded price multiplied by number of shares outstanding.
RoE is return on equity which is net profit divided by networth.
Shortlisted price is the price at which we had added the stock to our stockletter.
Current price is the price as on the last trading date of the week.
Performance is the return between the entered at price and current price.

How to Use the Stockletter

1. At any point, we intend to maintain a maximum portfolio of 30 shares in our Panther stockletter. If we go beyond, we will explain why
HowOur
2. to Use the Stockletter
suggestion is to invest an equal amount in each stock listed.
1. AThese
3. stockletters,may
new subscriber as atake
source of information,
a position in any are for two
of the those who of
kinds understand the rewards and risks of investing in stocks for the long run and use the list
recommendations
a.
for When a completely
doing their own researchnew with
stock is added
their own timeb. Any
and existing stock which we recommend to enter at current price
resources.
4.
2. For instance,
Equal in case
distribution if you
of your haveacross
surplus Rs500,000 to invest,
all stocks and we
is preferable. Forhave
this,listed 25 use
you can stocks, you-would
the tool put Rs20,000 in each. If we have
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recommended 10 stocks as per 3a and 3b above, you may invest Rs20,000 in each of the 10 stocks and wait for further recommendations. If it
3. Changes in the stockletter list will be mentioned in the table as and when they arise.
is a rare stock that exists in Antelope and/ Lion, you would spread your Rs20,000 investment equally across each such stock
5. As for exits, please follow the recommendations which would be mentioned in the column Comment in the previous page
Happy investing!

Happy investing!