The reluctant fundamentalist

I apologise for the hiatus. First my net connection went kaput and of course there wasn't much to write about the markets in the last month or so.

Market tanking for the last one month save the last week! Good sign, eh? Fundamentals are just as important as they are at any other time. Click here for Warren Buffet’s take on falling equity prices. Falling prices are a great sign with value picks becoming cheaper and consequentially greater value picks. I mean if I wanted to buy that DVD compilation of Seinfeld and DVD prices crashed, I would be elated eh?

This time I would be revisiting some of the old recommendations I had made in my mailing list in pre blogging days.

Welspun Gujarat: My favourite pick. I started tracking this company at a price of Rs 88. They make something boring like metal pipes for Oil and gas transportation. Remember with all the hoopla about energy and all that jazz, these guys stand to make the maximum money. Moreover their plate mill (plates being a key raw material for these pipes!) just went live a week back. Now they have an assured source of key raw material. The impact of this would be seen in the coming quarters. Their order book stands at a whopping Rs 5900 crores. Twice their annual sales of Rs 2700 crores. CMP: 403. A patient investor can expect levels of Rs 800 in a couple of years.

GEI Industrial Systems Ltd: I bought at 98 levels and now it is Rs 90. Am not too worried about the small loss. Remember the Warren Buffet quote? Anyway they make industrial compressors and are a key player in the Heat transfer Industry. Their key customer is again the Oil and gas transportation industry. The bottom-line is that their last quarter results have been terrific. Their sales are up by 74% and their net profit by 70%. No brainer, eh? Sure to double in a year.

Gujarat NRE Coke: These guys are one of the biggest miners and suppliers of coking coal. This is a fantastic play on the huge demand for steel. As anyone would obviously know, coking coal is a key input for the Iron smelting process. This scrip was available for as little as Rs 54. Now at a healthy 156. The management has shown the foresight to purchase coking coal mines in Australia thus ensuring themselves of raw material supply as well. Morever the coking coal rates are now being renegotiated with their customers at 20-30% increase to current contracted rates. This is one hell of a story. This stock is sure to reach Rs 250-300 levels by next year this time! Remember to ask me about it!

Wanbury: CMP Rs 113: They make bulk drugs for several branded manufacturers and have one of India’s very few FDA approved plants. They are the world’s biggest producers of Metformin- the number One Anti Diabetic drug in the world. They are developing leadership in other key segments such as Gynecology, pediatrics etc. Because of its small equity base, it has been ignored by the big institutional buyers. Well that’s a good sign cos it’s now available at a PE of 5 which is a steal considering its explosive growth prospects. Just go out and buy!

Well here comes the standard caveat, it is reasonable to assume I have decent amounts invested in these stocks. And hence my opinion is definitely biased. What the heck! Let’s all get richer together! Happy Investing!