Hope you are doing well.
Yesterday, we released our new stock recommendation for our Premium Members and would like to share with you details on the same.
How often does one get a High growth stock, Market leader with almost 50% market share, Minimal debt at Cheap valuations?
Not very often, right?
Well, if you put in several hours of stock research on daily basis and wait for the right moment, you do get a good investment opportunity every now and then.
The stock we recommended yesterday to our members has all the above-mentioned characteristics:
- High growth industry - At least for the next 4-10 years
- Strong entry barriers - Stringent regulations and time taking customer approval process
- 25% + Sales and PAT CAGR over the last few years
- Market leader - ~ 50% market share
- Minimal debt - In fact, almost debt free including surplus cash
- High promoter holding
- Capacity expansion - Executed and ongoing plans in place for future growth
All the above and most importantly at reasonable valuations or we can also say cheap valuations considering the stock is quoting around 10 times earnings.
As mentioned above, waiting for the right moment is important because the same stock wasn’t very cheap a few months back.
Thanks to market correction, the stock is down 40% from the peak and is now offering a good entry point in our view.
What we like the most about the company – Like any company, this one too was going through a bad phase a few years back.
All this while the management diluted equity only once in 10 years. Further, the promoters kept on increasing their stake through open market purchases almost every year FY 12 onwards. We like promoters who value their stake in the company because as minority shareholders we can only piggyback.
We also like the fact that the industry has strong entry barriers as the regulations are stringent at the govt. level and even getting approvals from the customers is a time-taking process.
To sum it up, considering strong momentum for the industry, market leadership, significant improvement in balance sheet, high entry barriers and cheap valuations, we have recommended the stock to our members.
If you are looking for investment opportunities do check out our premium subscriptions.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected]
Disclaimer: You can access it here - LINK
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 – No
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