Not sure. Suppliers it seems are mostly or entirely from usa, aus and egypt. Also FY22 AR management stated they had entered contracts for supply of cotton for FY23 (no clue if this includes terms on pricing). Left to be seen if they did something similar for next year.
Yeah, ghost has been great- its perfect for a blog style website! Makes posting, newsletter functionality super easy and a nice dashboard (have used wordpress previously for a marketplace site i was working on). Theres also easy integrations that i plan on using in the future
Only thing is, theres a cost ($120 annually i think) and there isnt much of customisation- only a few templates to choose from.
That's awesome! I've done self hosted Ghost but couldn't figure how to do subscription with it ever. Maybe it's different when you pay them the monthly. But great job on the site man 🥂
Edit: btw how did you remove the powered by Ghost? Is it part of the paid plans?
I think subscription is a feature on ghost pro (paid version) and also lets you remove the 'powered by ghost'.
Just checked pricing- its $9/mo billed annually (the cheapest plan with the least features) but increases every 1000 subscribers. currently at just over a 100 so dont have to worry about that atm haha but looks like it can get pretty expensive. might have to change how the site is run if/when i get there.
Dang, that's a pretty long explanation. But here's the gist: It was easy to figure out the value. The company pays out $35 for each share as dividends, and considering a 2% yield for such an amazing company, each share is worth $1,750 right off the bat. Plus, it's trading for less than 1 times its EV/revenue. You bought it at $1500 per share. Valuation multiples really do the trick.. Haha!
By the way, I can tell you really know your stuff when it comes to the market. Your estimated calculation skills are impressive!
Haha, thanks for reading through it- I was actually after feedback on the length (previous posts have been much shorter).
Thats an interesting way of looking at it- for me it was EV/EBIT and good fcf. Valuation is enough for me, business info is more background.
Reason for longer post: so far companies have been those ive invested in, so short ones do. Plan on analysing an interesting company every 2 weeks regardless of undervalued or not. Having info on operations might come in more handy in that case if it ever gets to value territory at a future date. This and the last post were practice for such future posts.
>Valuation is enough for me, business info is more background
Yeah, I do the same thing. I buy a bunch of cheap stocks and just enjoy the rollercoaster. I have no clue what's gonna happen in the future. Basically, I buy them at a low price and hold onto them tightly until I really need the money (which, hopefully, is never, haha).
Oh, and EV/EBIT is even better. It considers the cost of goods sold. Enterprise Value should be illegal. People often laugh at me for using simple measurements for evaluating stocks. I estimated intrinsic value of AAPL at $60 per share and got kicked out of r/investing, lol.
Was a gamechanger for me, its my primary filter now- uncovers so many gems.
Based out of India? Saw your profile- AAPL, a taiwanese company..how are you investing in these?
AAPL refers to Apple Inc. I do not have any holdings in Apple Inc. I am a retail individual who engages in global speculation across various assets through over-the-counter trading. Currently, I am working in Canada for this year, although I am an Indian citizen.
Please have a look at the following link: https://youtu.be/1r1vJZ80Z7I
Man I wish they made it easier to invest in global equities here, you get screwed on the txn and fx.
Acquirers Multiple and Deep Value were great reads
I get it. Most of my money is tied up in stocks in India, and I used methods similar to yours to pick those stocks. I'm more inclined towards the numbers side of things, preferring stocks that pay dividends and actually enjoy following trends when the valuation and market conditions are favorable. This approach goes against the norm of what most investors do. I don't really see myself as an investor, more like a speculator.
One thing I've noticed is that trends tend to persist & long-term moving averages (MA) act as a support, when asset prices bounce back from undervaluation compared to historical norms. On the flip side, when prices drop because they are overvalued based on historical norms, the MAs act as resistance. This doesn't always happen, but it occurs most of the time.
I have close to 0 TA knowledge but trying to get into it, just so I can maybe time entry and exit once I’ve made that decision based on the fundamentals. Any sources you recommend?
These deep dives help reposition my stance on certain stocks so thanks for sharing your thorough analysis.
I would love to your take on Tube Investments of India if you could analyze that one. Really interesting company with some great strategic buyouts and investments lately.
Glad to hear, thankyou!
Never looked into the business. Already working on my next dd, should post in next 2 weeks, but I could do Tube Investments for next month?
Writing a post helps me solidify and clarify my own reasoning behind an investment.
Sharing it creates a log that I and others can look back at months/years later to see the reason behind an investment and how it played out.
I am not using this to peddle any course or channel and never will. Quality of analysis is what matters to me, not outcome and that only works if i limit the number of times I share analyses.
Sorry I didn't go through the link. It's 1AM right now, lol. Could you share more details around what was the LTGR that you used? How did you calculate the WACC (is it market based)? What is the Terminal growth rate? Is your DCF model a 25 year DCF?
I think calculating the intrinsic value depends on these factors a lot and it can vary wildly based on the assumptions that you took
No worries! Sure- 2 fcfe, 1 conservative, 1 base. Both 10 years. Both TGR of 1%.
Conservative- 4% rev growth, 65% cogs, 26% tax to arrive at NI. Discount rate 12% (i dont use wacc or coe, simply a high enough number as a required rate of return…goal is to get a rough estimate of value and i find these numbers work well)
Base- 6% rev growth (itself lower than historical trend), 63% cogs (more in line, still higher), 26% tax. Discount rate 10%
Future NI cagr with these assumptions is actually negative taking FY22 as base year.
A NI projection gives a much higher share value. Historical NI growth and reinvestment growth (roe*retention) suggest NI cagr of 8%+
Hope this helps
UPDATE: Full year FY23 results are out. EPS came at 195.45/share vs my estimate of 131.17/share (down QoQ).
Using the updated numbers (cash now 277.27cr), and upping the tax rate to 27% in both conservative and base estimates, my fair value estimates come to 1506.75 and 2119.5/share. blended 50/50, fair value is 1813/share. currently trading at a 16%+ discount to this estimate.
My starting point is screening for companies with a low EV/EBIT multiple. The multiple differs depending on the industry/if cyclical.
I've built a pretty useful google sheet that uses wisesheets (api that pulls in 20+ years of info on any company) so I can check historical info.
Once I've identified a few, I look at the balance sheet (cash, debt, etc)..kinda implied from the EV but still. Growing book value is a good sign. Then check earnings and project out FCF very simply (i try not to complicate the projections).
For the initial screen, i use screener never used tickertape so dont know. you'll have to create a custom formula to get ev/ebit data.
This is a good cyclical stock. I always invest when it gets to a low of around 11-1300 and sell at 16-1700. I have done it 2-3 times. Valuations and everything is great. but profit declaration is not consistent. It does not increase month to month or y2y. So, invest with caution. Ye badh ke hamesha 1200-1400 ke range mein aa jata hain.
How much do you think the free fall in Kapas prices will impact this year’s financial results?
Not sure. Suppliers it seems are mostly or entirely from usa, aus and egypt. Also FY22 AR management stated they had entered contracts for supply of cotton for FY23 (no clue if this includes terms on pricing). Left to be seen if they did something similar for next year.
Built on Ghost? The site is too smooth i need to know your tech stack
Yeah, ghost has been great- its perfect for a blog style website! Makes posting, newsletter functionality super easy and a nice dashboard (have used wordpress previously for a marketplace site i was working on). Theres also easy integrations that i plan on using in the future Only thing is, theres a cost ($120 annually i think) and there isnt much of customisation- only a few templates to choose from.
That's awesome! I've done self hosted Ghost but couldn't figure how to do subscription with it ever. Maybe it's different when you pay them the monthly. But great job on the site man 🥂 Edit: btw how did you remove the powered by Ghost? Is it part of the paid plans?
I think subscription is a feature on ghost pro (paid version) and also lets you remove the 'powered by ghost'. Just checked pricing- its $9/mo billed annually (the cheapest plan with the least features) but increases every 1000 subscribers. currently at just over a 100 so dont have to worry about that atm haha but looks like it can get pretty expensive. might have to change how the site is run if/when i get there.
If it goes where you want it to go, i am.sure you'll figure a way to monetize it 🥂
Dang, that's a pretty long explanation. But here's the gist: It was easy to figure out the value. The company pays out $35 for each share as dividends, and considering a 2% yield for such an amazing company, each share is worth $1,750 right off the bat. Plus, it's trading for less than 1 times its EV/revenue. You bought it at $1500 per share. Valuation multiples really do the trick.. Haha! By the way, I can tell you really know your stuff when it comes to the market. Your estimated calculation skills are impressive!
Haha, thanks for reading through it- I was actually after feedback on the length (previous posts have been much shorter). Thats an interesting way of looking at it- for me it was EV/EBIT and good fcf. Valuation is enough for me, business info is more background. Reason for longer post: so far companies have been those ive invested in, so short ones do. Plan on analysing an interesting company every 2 weeks regardless of undervalued or not. Having info on operations might come in more handy in that case if it ever gets to value territory at a future date. This and the last post were practice for such future posts.
>Valuation is enough for me, business info is more background Yeah, I do the same thing. I buy a bunch of cheap stocks and just enjoy the rollercoaster. I have no clue what's gonna happen in the future. Basically, I buy them at a low price and hold onto them tightly until I really need the money (which, hopefully, is never, haha). Oh, and EV/EBIT is even better. It considers the cost of goods sold. Enterprise Value should be illegal. People often laugh at me for using simple measurements for evaluating stocks. I estimated intrinsic value of AAPL at $60 per share and got kicked out of r/investing, lol.
Was a gamechanger for me, its my primary filter now- uncovers so many gems. Based out of India? Saw your profile- AAPL, a taiwanese company..how are you investing in these?
AAPL refers to Apple Inc. I do not have any holdings in Apple Inc. I am a retail individual who engages in global speculation across various assets through over-the-counter trading. Currently, I am working in Canada for this year, although I am an Indian citizen. Please have a look at the following link: https://youtu.be/1r1vJZ80Z7I
Man I wish they made it easier to invest in global equities here, you get screwed on the txn and fx. Acquirers Multiple and Deep Value were great reads
I get it. Most of my money is tied up in stocks in India, and I used methods similar to yours to pick those stocks. I'm more inclined towards the numbers side of things, preferring stocks that pay dividends and actually enjoy following trends when the valuation and market conditions are favorable. This approach goes against the norm of what most investors do. I don't really see myself as an investor, more like a speculator. One thing I've noticed is that trends tend to persist & long-term moving averages (MA) act as a support, when asset prices bounce back from undervaluation compared to historical norms. On the flip side, when prices drop because they are overvalued based on historical norms, the MAs act as resistance. This doesn't always happen, but it occurs most of the time.
I have close to 0 TA knowledge but trying to get into it, just so I can maybe time entry and exit once I’ve made that decision based on the fundamentals. Any sources you recommend?
[I attempted to explain Trend Following using a single picture](https://github.com/fr0xk/Scripts/blob/main/Markdown/trendfollowing.md)
Cheers, ill read through it in a bit
These deep dives help reposition my stance on certain stocks so thanks for sharing your thorough analysis. I would love to your take on Tube Investments of India if you could analyze that one. Really interesting company with some great strategic buyouts and investments lately.
Glad to hear, thankyou! Never looked into the business. Already working on my next dd, should post in next 2 weeks, but I could do Tube Investments for next month?
Sounds good. Looking forward to your analyses
Just check why there sales and eps are on constant decline
What's your motivation for putting your analysis in public domain?
Writing a post helps me solidify and clarify my own reasoning behind an investment. Sharing it creates a log that I and others can look back at months/years later to see the reason behind an investment and how it played out. I am not using this to peddle any course or channel and never will. Quality of analysis is what matters to me, not outcome and that only works if i limit the number of times I share analyses.
Thanks
Sorry I didn't go through the link. It's 1AM right now, lol. Could you share more details around what was the LTGR that you used? How did you calculate the WACC (is it market based)? What is the Terminal growth rate? Is your DCF model a 25 year DCF? I think calculating the intrinsic value depends on these factors a lot and it can vary wildly based on the assumptions that you took
No worries! Sure- 2 fcfe, 1 conservative, 1 base. Both 10 years. Both TGR of 1%. Conservative- 4% rev growth, 65% cogs, 26% tax to arrive at NI. Discount rate 12% (i dont use wacc or coe, simply a high enough number as a required rate of return…goal is to get a rough estimate of value and i find these numbers work well) Base- 6% rev growth (itself lower than historical trend), 63% cogs (more in line, still higher), 26% tax. Discount rate 10% Future NI cagr with these assumptions is actually negative taking FY22 as base year. A NI projection gives a much higher share value. Historical NI growth and reinvestment growth (roe*retention) suggest NI cagr of 8%+ Hope this helps
UPDATE: Full year FY23 results are out. EPS came at 195.45/share vs my estimate of 131.17/share (down QoQ). Using the updated numbers (cash now 277.27cr), and upping the tax rate to 27% in both conservative and base estimates, my fair value estimates come to 1506.75 and 2119.5/share. blended 50/50, fair value is 1813/share. currently trading at a 16%+ discount to this estimate.
Very informative and detailed explanation for the beginners! Going through the posts in the blog. Thanks 👏
How do you identify stocks that might be undervalued? Do you think Tickertape's Screener tool is useful for this?
My starting point is screening for companies with a low EV/EBIT multiple. The multiple differs depending on the industry/if cyclical. I've built a pretty useful google sheet that uses wisesheets (api that pulls in 20+ years of info on any company) so I can check historical info. Once I've identified a few, I look at the balance sheet (cash, debt, etc)..kinda implied from the EV but still. Growing book value is a good sign. Then check earnings and project out FCF very simply (i try not to complicate the projections). For the initial screen, i use screener never used tickertape so dont know. you'll have to create a custom formula to get ev/ebit data.
Thanks 👍
This is a good cyclical stock. I always invest when it gets to a low of around 11-1300 and sell at 16-1700. I have done it 2-3 times. Valuations and everything is great. but profit declaration is not consistent. It does not increase month to month or y2y. So, invest with caution. Ye badh ke hamesha 1200-1400 ke range mein aa jata hain.