Few days back we released the latest Sep’15 research note on an emerging company for our Alpha and Alpha + members and would like to share with you details on the same.
We have always believed that it’s important to get the four pillars of stock selection right; they are: business, management, financial performance and the valuations. If the above four are strong (reasonable in case of valuations), you probably have a long term winner at hand and that seems the case with our Sep’15 Alpha stock.
Consider the fact that company deals in one kind of product (simple and easy to understand business) and is one of the leading companies in its business, has consistently reported more than 20% growth, has a good, rational and transparent management at the helm of the affairs and the stock is available at less than 15 times earnings.
Note: This is not an investment advice. The performance data quoted at www.katalystwealth.com represents past performance and does not guarantee future results.
Details on latest Alpha stock
In general we look for small, simple, easy to understand businesses as we don’t find ourselves capable of analyzing companies like RIL, SBI and the Sep’15 stock perfectly fits in our criteria of simple, easy to understand, scalable and decent business.
Product profile – More often than not we look for companies where the products touch our daily lives as that helps in better understanding of the demand outlook for the products and that’s precisely the case with Sep’15 Alpha stock.
Almost each one of us comes in contact with the company’s products several times on a daily basis.
What is further good about the company’s products and business is that there’s reasonable level of customer stickiness attached to the business.
Certified and compliant manufacturing facilities – These days manufacturing facilities and practices of the company’s are getting scrutinized in a major way and it is important that the company one invests in has the requisite certifications and is in compliance with law.
Besides having certified facilities, Sep’15 stock has been continuously upgrading technology and has its own design centres which enable it to keep rolling out new and innovative products as per the requirement of its clients.
It’s important to note here that Sep’15 alpha stock is amongst the leading companies in its business and generates sizable turnover from exports.
Industry Outlook – Since the last few years the industry has been growing at double the GDP rate. The business seems good to us on account of certain level of customer stickiness, domestic growth opportunities and increasing opportunities of exports with manufacturing shifting from developed world to countries like India.
Management – Based on our analysis, we have found company’s disclosures policies, remuneration to the promoters and related party transactions within reasonable range and haven’t found any major issues in terms of corporate governance.
The management has also done a fine job of maintaining reasonable growth, profitability and has been rationale with capital allocation decisions.
Operating Performance – If both the business and the management are good, it should reflect in the operating and financial performance of the company.
We strongly believe in the consistency of the past performance or improvement in operating performance based on carefully analyzed data and the current strength of the balance sheet to support the future growth and in the case of Sep’15 stock we find all the three.
Over the years the company has consistently maintained 20% + growth while continuously improving in terms of operating efficiency, asset utilization efficiency and maintaining a fine balance of leverage on the balance sheet.
Disclaimer: www.katalystwealth.com (here in referred to as “Katalyst Wealth”) is the domain owned by Ekansh Mittal. Mr Ekansh Mittal is the sole proprietor of Mittal Consulting and offers independent equity research services to retail clients on subscription basis. SEBI (Research Analyst) Regulations 2014, Registration No. INH100001690.
Use of the information herein is at one’s own risk. This is not an offer to sell or solicitation to buy any securities and Ekansh Mittal/Mittal Consulting/Katalyst Wealth will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. Before acting on any recommendation, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. All content and information is provided on an “As is” basis by Ekansh Mittal/Mittal Consulting/Katalyst Wealth. Information herein is believed to be reliable but Ekansh Mittal/Mittal Consulting/Katalyst Wealth does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Mittal Consulting, its proprietor may hold shares in the company/ies discussed herein. The performance data quoted represents past performance and does not guarantee future result