Tuesday, September 20, 2011

RESPONSE TO READER'S QUERY: @NR 16/9/11 WOCKHARDT

TECHNICALLY, WOCKHARDT is in a sideways kind of move in a tight 370-400 band. First resistance on the upside is at 408 levels followed by 420 and then 448. For a reasonable inkling of an uptrend it should trade decisively above 408 levels. On the downside, it has great support at 367 levels which seems unlikely to break, save some unforseen adverse news etc.

FUNDAMENTALLY, the Corporate performance has been good, of late, with a pretty aggressive  EBIDTA growth guidance for FY12 given by the Management.   At CMP 400 odd , it is a bit expensively valued at about 38 PE TTM. The main risks are the Debt retirement issues as well as the FCCB Bond Holders petition wherein adverse newsflow could result in a sharp downswing for the Scrip. However if Management's confidence in solving the above two bug-bears is acceptable then one could definitely see  15-20% returns from CMP over the next year.

Thus, it would be great if one could pick up the stock at the lower end of the 370-400 band, for a target of 480 odd over the nest 12-15 months.
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2 comments:

  1. NRSeptember 20, 2011 at 10:12 PM

    Thank You very much on your replies. I have a few more queries. Can you plz suggest 1 stock from each f the below sectors where deep value is hidden and is unnoticeable or the CMP does not have proportionality with the value

    a. Chemicals
    b. fmcg
    c. pharma
    d. IT
    e. fertilizers/agri
    f. brands
    g. household


    Thanks

    NR

    ReplyDelete
  2. SANJAY M.September 21, 2011 at 5:50 PM

    Dear NR, that's a tough one since most 'good' portfolio stocks have already been 'discovered' as it were, and have run up as a result. However, off the cuff, the names that come closest to your criteris are as follows: Chemicals (TATA CHEMICALS or even RIL); FMCG (really tough one but I would pick NESTLE); Pharma (AUROBINDO PHARMA, DIVIS LABS); IT (INFOSYS is the safest bet at this time); FERTILIZER/AGRI ( CHAMBAL on dips, ZUARI IND, COROMANDEL on dips, JAIN IRRIGATION from Agri/rural); brands (I am not sure what exactly you mean by this segment but I would pick ITC); Household (again I am not clear what segment u have in mind, but if u mean realty, then DLF, HDIL, GODREJ PROPERTIES; if u mean household items then Hindustan Sanitary HSIL, KAJARIA) All the best

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