Dear Sir,
Recently we released long/medium term investment recommendation for our Alpha and Alpha + members and would like to share with you details on the same.
If you like to invest in niche, good quality debt free small companies growing at 20-25% + annually and still available at ~5 times earnings, then as you will realize on reading the below details, latest alpha recommendation (Name of the company – Eo****t) is one of those companies.
You can get a detailed report on our latest Alpha stock by subscribing to either of Alpha or Alpha +
Details on alpha recommendation
The company that has been chosen for alpha recommendation is amongst the top 4 companies in India in its area of operations and it has achieved the same on the back of its own persistence to be India’s leading company and technology backing from foreign partners.
We like companies that have leadership position in their respective industries as it is reflective of the quality of management, their ability to outgrow competition and do things differently. With leadership position the companies also get advantages of scale, brand recognition, customer stickiness, etc.
Our stock picks like Cera (620% return), Acrysil (400% return), WimPlast (350% return), Amara Raja (230% return), Bajaj Corp (950% return), Supreme Industries (105% return), Symphony (175%), etc are the leading companies in their respective industries and the stocks have delivered huge returns since recommendation.
Significant transformation in the last 5-6 years – Prior to FY 08, it was solely a distributor of various multi-national companies, however in FY 08 it started its own manufacturing and the same now contributes to more than 75% of the operating revenue of the company.
Scale up of own manufacturing has resulted in significant improvement in the profitability of the company and for FY 14 it has recorded 5 times Profit Before Tax of what it recorded at the start of manufacturing in FY 08.
The company is on net basis debt free and the return ratios have improved to around 18-20%.
Operating Performance – We have talked about major transformation in the company in the last 5-6 years and let’s see if the same has transformed into operating performance or not:
5 years sales growth – 15% + CAGR
5 years profit growth – 31% + CAGR
Return ratios – Improved to 18-20%
Debt equity ratio – 0
Surplus cash – 10% of the current market cap of the company
Dividend payout – 15%
Promoter holding – 50%
Despite very strong growth in earnings and the major transformation that is underway, the stock is available at 5 times FY 14 earnings.
You can get a detailed report on the company by subscribing to either of Alpha or Alpha +
Best Regards,
Ekansh Mittal
https://www.katalystwealth.com/
Ph.: 0512-6050062, Mob: +91-9818866676
Email: [email protected]