Few days back we released the latest Jun’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 if you are able to get both the sector and the company right, there’s a long term winner at hand and that seems the case with our Jun’15 Alpha stock. Consider the fact that one of the products the company deals in has been consistently recording 15% + growth at industry level since the early 2000 and the Jun’15 company we are talking about has recorded more than 44% annualized growth in the same product category in the last 4 years. We are not considering last 5 years growth as then the CAGR number would be too large due to base effect.
You too can get the detailed note on the stock by subscribing to either of Alpha or Alpha +. Register yourself HERE and subscribe our services for high quality research.
Note: This is not an investment advice. The performance data quoted at www.katalystwealth.com represents past performance and does not guarantee future results.
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 Jun’15 Alpha stock
In general we look for the following traits in the stocks of companies we invest and initiate report on: Companies that have the ability to consistently generate high returns on capital employed; can grow earnings at a rapid pace without requiring access to outside capital markets and are run by able, honest, and owner-oriented managers.
Also, the products/services should be easy to understand and the company should have a simple structure as that’s when it is easy to make high allocations.
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 Jun’15 Alpha stock.
An average middle class to a wealthy household comes in contact with the company’s products several times on a daily basis.
Superior Technology and exclusive licensee of patented technology – The Company manufactures its products using a patented technology and is the exclusive licensee of the same in India.
The access to the top notch technology gives a certain degree of edge in terms of product quality over both domestic and international manufacturers who do not have access to the same
Also, company’s products have highest degree of certifications in terms of safety standards which again give it an edge especially in quality and safety conscious export markets.
Industry Outlook – As mentioned in the opening sections, at the industry level itself the growth has been in excess of 15% since the last several years.
The outlook for the product remains very strong as the penetration is still very low and qualitatively the product is superior in almost all the aspects to other comparable products.
Operating Performance – A company may operate in a fast growing sector, it may have high brand re-call and may have strong future outlook, however 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.
As far as Jun’15 stock is concerned, it didn’t report the greatest performance but there’s been a consistent improvement in financial and operating metrics on year on year basis and the company has now reached a level where the profitability has improved significantly and that too at below 50% capacity utilization. While the sales have more than doubled in the last 4 years, EBITDA has grown by more than 200%.
Imagine the expected improvement in performance and profitability at 80-90% capacity utilization.
All this while company’s absolute debt level has reduced and considering strong operating cash flows, we expect the net debt to go down substantially, thereby transforming the entire capital structure of the company.
You too can get the detailed note on the stock by subscribing to either of Alpha or Alpha +. Register yourself HERE and chose the subscription of your choice.
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Best Regards,
Ekansh Mittal
https://www.katalystwealth.com/
Ph.: 0512-6050062, Mob: +91-9818866676
Email: [email protected]