Jindal Poly - Update

CMP - Rs 230

The stock price is definitely moving up. It increased around 8% on Friday after the company announced some minor modification to the buy back approved earlier. I couldn't find anything new in this news although Mr. Market got excited.

Now what? should I be buying more or just wait till it crosses Rs. 350 and sell.  I am finding it difficult to convince myself to buy more although that is the right things to do. The price is still very low compared to its intrinsic worth. But I guess I am subconsciously anchored to Rs 200, my earlier buy price.

Key takeaways
1. Graham was definitely right about Mr. Market. He just wants some action. Any efficient market theory supporters?
2. Anchoring is easy to understand but very difficult to practice.

Jindal Poly - Update

CMP - Rs. 215.6

Stock price is moving up with high volumes. See I was so right about it!!. This is what I wants to believe although actual price movement can be in any direction irrespective of the analysis. We can sometime be right even with faulty thinking. How do I know if my analysis is correct?

Jindal Poly Films - History Repeats!!

Lot of things happened to this stock/company in last one year

• Company announced a 1:1 bonus and the stock price went to Rs 530+ after the record date (around  3-4 times the price when I had analyzed)
• Company is investing in thermal power company called Jindal Powetech. Around 600MW is expected to go live in Mar 2012
• Plastic prices zoomed and came back to normal recently

Yesterday I checked the stock to see whats happening

• The net profit dropped considerably in the last Quarter due to decrease in the plastic prices
• The current market price is around Rs 205 from the peak of 500+ some time back
• Company has again announced a buy back from market up to Rs 350 with a budget of 140 crore

So the price is nearly back to the price one year back adjusting for the bonus. The stock is looking more attractive now than one year back considering that nothing much has changed to the company. Actually the company is increasing the prices of its product from last few months and expect to retain the volumes. This should reflect in this and future quarter results.

I feel this is a great opportunity and stock is a good bet for the long term at these prices. 

Jindal Polyfilms - Buy?

Jindal Polyfilms is part of B.C Jindal group and is one of the largest manufacturer of BOPET and BOPP films in India. These films are used as packaging on different products.

The key numbers are as follows
CMP=Rs 380
Market Cap - 875 cr
Sales ~1580 cr.(>1000 cr from past few years)
P/E = 10 (Avg EPS of last 3 years)
P/B<1
The company is buying back shares for some time now at Rs 400 and Rs 450 now. So the intrinsic worth of the company seems to be somewhere between 450-600.

Interestingly the company is taking loans to buyback the shares. It still has room to take on more debt to completely buy back the non promoter holding of 33%. So is it a delisting candidate? possible.

But these are some of my concerns

• Market overall seems to be overvalued. Is it a good time to buy a secondary company like this?
• The market price is quite stagnant from few years now. Only recently crossed the 2005 IPO price of 350.
• How will appreciation of Rs against Euro impact its business

Overall company looks undervalued with little downside but good upside.

Why am I blogging on Value Investing?

I am not a big investor and don't have the skills of some of the value investors already posting their ideas on many of the blogs (Actually I am in IT). But I have lot of interest in learning value investing and am investing in stock market from last 5-6 years with decent success. The process of learning gives me more pleasure than actually making money.

The idea of this blog is not to teach anybody value investing (I don't think I have the qualifications to do it. There are many other books/resources to do that) but to log my experiences of learning value investing and applying them to the actual situations in the Indian markets. This I think will help me in streamlining (also to know what I was thinking at a particular point in time) my thought process and also may help some other aveage investors improve their value investing skills along with me.