We have been participating in the Special situation opportunities (SSOs) as these come with relatively lower risk and decent gains in a relatively shorter duration of 3-4 months. Have also benefited from this strategy with several Special Situation opportunities like Ineos Styrosolution delisting, Suven life-Suven Pharma demerger, Linde India delisting, Hexaware delisting, etc appreciating by 20-140% in a period of 2-11 months.
On 11th Jan’21 we released our New Special Situation stock report and we think you may find the logic behind the same interesting as there’s a reasonable probability of decent gains over the next 2-3 months.
Latest Special Situation Report (Jan’21)
The opportunity we are talking about has the following attributes:
- It’s a delisting based opportunity
- Market cap < 500 crore
- Fundamentally strong company with debt free balance sheet (on net basis) and some surplus cash reserves
- The stock is trading around 10-11 times pre-tax operating earnings
- After cleaning up the balance sheet in the last few years, the company has been trying to improve the profitability as well by pushing for exports and offering additional services and products to customers
- Downside risk is low as the base price (expected floor price) is only about 17% lower
- The highest level the stock has traded in the last 5 years is around 75% higher from the current levels. On the upside, taking cues from the past cases, 30-40% seems quite possible.
Overall, at around current price the risk-reward ratio is in favor of the shareholders and have therefore initiated the opportunity for Premium members.
For better understanding of the Special Situation Opportunities, you can read our Presentation on the case studies shared with the students of MDI, Gurgaon, a Premier Business School:
- Special Situation Investing, 2020 – LINK
You can access latest Stock Reports, Special situations and Model Sheet in Premium Memberships HERE
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Details of Associate: Not Applicable
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The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
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Disclosure (SEBI RA Regulations)
Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – Yes, Investment in Suven Pharma
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest at the time of publication of the research report or at the time of public appearance – No
Whether it or its associates have received any compensation from the subject company in the past twelve months – No
Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past 12 months – No
Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided – No
Whether the research analyst has served as an officer, director or employee of the subject company – No
Whether the research analyst or research entity has been engaged in market making activity for the subject company – No