Can Fin Homes Ltd - 511196

Name of Company	Can Fin Homes Ltd
BSE Code	511196
NSE Code	CANFINHOME
ICICI Code
Established
My Take	So-So
Headquarters	Bangalore
Promoters	Canara Bank
Story	200 Cr market cap for a 40 Cr FY10 profit. Which makes the PE around 5 times. Promoter holds 42% of the shares. Can buy when price is 45-50 – that would mean about 4-5% dividend yield.
Sector	NBFC
Sub-sector	Housing finance
Website	http://www.canfinhomes.com/
Positives	Very good NPM's – around 15% is average. 250 Cr reserves for a 213 Cr FY10 revenue is really good. The website focuses on prospective customers and has no information for investors – this could mean, there is no manipulation by the promoters. Can expect a regular dividend yield of 2-2.5% at current prices. Not a very volatile stock – the 52 week price ends are between 75 and 102.
Negatives	1600 Cr debt (for a FY10 revenue of 213 Cr) seems huge. Cannot see a huge increase in revenues for the last 5 years. Going forward also, we cannot expect a great increase in revenue as no ad campaign or offers are visible.
Peers	HDFC, Dewan, LIC Housing, GIC Housing, Gruh
News
Price @ blogged	95.50 (26-Jun-10)

UCO Bank - 532505

Name of Company	UCO Bank
BSE Code	532505
NSE Code	UCOBANK
ICICI Code
Established
My Take	So-So
Headquarters	Kolkatta
Promoters	Government
Story	NPM's around 6% can be expected. Gross NPA at 1.99%, net NPA at 1.17%. CAR by Basel II is 13.21.
Sector	Banking
Sub-sector	Retail banking
Website	http://www.ucobank.com/
Positives	Low PE -  4300 Cr market cap for a 1000 Cr profit. Regularly dividend paying company – can expect a dividend of >1%. 63% promoter holding. Revenue has doubled from 4300 Cr in FY06 to 9500 Cr in FY10. Profit has grown 5 fold in the same period from 200 Cr to 1000 Cr. The company has 3000 Cr in reserves (<1/3rd of FY10 revenue).
Negatives	Very near 52 week high.
Peers	SBI, ICICI, HDFC bank, IOB, BOI, IB
News
Price @ blogged	78.40 (26-Jun-10)

Harita Seating systems - 590043

Name of Company	Harita Seating systems
BSE Code	590043
NSE Code
ICICI Code
Established	1986
My Take	Dislike
Headquarters	Chennai
Promoters	A lot of Harita companies
Story	Manufactures only seating systems. Wholly owns Harita polymers – not sure if it has really started operations. The company  60:40 JV with Fehrer GmbH - Harita Fehrer Ltd. manufacturing locations at hosur, Ranjangaon (Pune), Nalagarh (HP), etc.
Sector	Auto anciliary
Sub-sector	Seating systems (for auto and other)
Website	http://www.haritaseating.com/
Positives	66% promoter holding
Negatives	FY09 and FY10 has been loss making, though FY10 was almost no loss-no profit. The company does not have any reserves. Even when the company was profitable, the NPM's were not high (around 3-4%). 73 Cr for a loss making company (and has not made max 6 Cr profit) – seems like a high price. No Institutional holding.
Peers	Bosch
News
Price @ blogged	95 (27-Jun-10)

Fundamental Stock Analysis

 

 

What	Why	Action
One-year Price chart with 50-day moving average	Buying a stock while it's in a downtrend is dangerous, as it will likely move lower. A stock is in a downtrend if its price is below its MA, and in an uptrend if above. Use the 50-day MA.	O.K. to buy if stock price is above its 50-day moving average.
Price/Sales ratio (P/S)	Valuation check. A stock with a P/S above 10 is momentum priced. Buying momentum priced stocks is only recommended in a strong market.	O.K. to buy if P/S is less than 10. P/S ratios between 3 and 5 are best for growth stocks. Ratios below 2 reflect value priced stocks.
Cash Flow per share	Companies with positive operating cash flow are safer investments than cash burners (negative cash flow).	O.K. to buy if Cash Flow per share is a positive number.
Average Daily Volume (shares)	Institutional buying is an important catalyst for stock price growth.  Institutions buy hundreds of thousands of shares and prefer stocks with large daily trading volumes so they can easily move in and out of positions.	O.K. to buy if Average Daily Volume is 100,000 shares or higher (0.1 mil), and above one million shares is best.
Financial Health Grade	Invest, don't gamble! Stick with companies with solid financials.	O.K. to buy if Financial Health Grade = A, B or C

 

Growth Grade	Consistent strong sales growth over extended periods translates to long-term stock price appreciation.	O.K. to buy if Growth Grade = "A" or "B"
Institutional Ownership	Lack of institutional ownership means mutual funds, pension plans and other institutional buyers don't think they will make money owning the stock. Why would you want to own it?	O.K. to buy if institutions own at least 30% of shares outstanding.
Number of Analysts Making Buy/Hold/Sell Recommendations	A company's performance can go unrewarded if nobody knows about it.  Sufficient analyst coverage is necessary to create investor interest, especially from institutions.	O.K. to buy if a total of at least four analysts are listed as currently making strong buy, buy, hold, underperform, or sell recommendations.  Look only at the total number of analysts making recommendations, not whether there are more buys than holds, etc.

 

- - - - - - - - - - Advanced Research & Analysis- - - - - - - - - - - Calculator Required
Gross Margin Trend	Changes in gross margin percentages from quarter to quarter point to changes in a company's competitive position in its marketplace.  Increasing gross margins signal an improving competitive position, and declining margins warn of increasing competition.	Gross margin (GM) is the "Gross Profit" divided by "Total Revenue," expressed as a percentage. Calculate the GM for each of the past five quarters, and observe the GM trend. O.K. to buy if the trend is flat or increasing. Ignore variations of less than 1%, e.g. from 41% to 40.5%.
Revenue Growth Rate Latest Quarter compared to year-ago quarter	Slowing revenue (sales) growth is an important "red flag" signaling danger ahead.	Use your calculator to compute the most recent quarter's (MRQ) revenue growth rate (percentage) vs. the year-ago quarter. Compare that figure to the "1 Year" sales growth listed in the Growth Rate section. Ideally, the MRQ growth should exceed the 1-year figure, signaling accelerating growth. But, it's O.K. to buy if MRQ growth is at least 85 % of "1-Year" growth.
Forecast Revenue Growth Rate	Look at consensus revenue forecasts to determine if historical growth rates are expected to continue.	Check the forecast revenue growth percentage for the current quarter vs. the corresponding year-ago quarter.  Ideally, the growth rate should be accelerating but it's O.K. to buy if the forecast year-over-year revenue growth is at least 80% of the "1-Year" growth from the previous step.
Accounts Receivables Growth vs. Sales Growth	Accounts receivables are monies owed by a company's customers for goods received.  The Accounts Receivables Ratio (ratio) is the net receivables divided by the revenue for the same quarter.  A significantly higher ratio vs. year-ago is a red flag pointing to future problems.	Compute the ratio for the most recent and the year-ago quarters. Ideally the most recent ratio would be less than year-ago, but it's O.K. to buy if the ratio is the same or lower than year-ago. Ignore increases that are less than 5%, e.g. from 60% to 64%.