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Wednesday, February 21, 2007

FCS SOFTWARE : Value Pick

Continuing with my theme of concentrating on Value stocks in the current market weakness, I present another potential multibagger. The company has posted a nine months EPS of Rs.11.45 and at a projected EPS of Rs.15 for full year, the fair value of this stock should not be less than 150. But the stock is currently trading at only 82.30. Clearly, it is one of the most undervalued IT stocks in the market.

20 comments:

Sandip said...

Request to give short-term tips with target value and period.

jig said...

hey dude whts ur call on lok hsng now?

Superstar said...

Dear Sandip,
I would suggest you not take a short term view on the markets currently and have a medium term outlook at least. The targets for FCS Software are 96, 112 and 160 for the ST,MT and LT.

Dear Jig,
I had given my view on real estate prices being at their peak and a major correction in realty prices in the offing on moneycontrol some days back. I had also given on the Lok Housing board on moneycontrol a stop loss of around 230 which should have been strictly followed.

One can accumulate SRF, Salona Cotspin and FCS Software on every dip with a MT to LT view.

Cheers!

Vandy said...

Thank God u hv not removed ur reccos post the crash.Bill Gates has removed all reccos from his blog.

jig said...

Pattern Similar to may last year.
Hey guys if u remember whn mkts crashed last time in may we saw a similar pattern where the mkts fell frm 12000+ to 11500+ and then recovered for a day say up arrnd 250 pnts whch made investors feel this is one of those regular corrections and thn mkts wld again start movin up but we all know wht happened. Whts ur call on the mkts now ?

Superstar said...

Hi Jig,

I am not that pessimistic about the mkt right now. The biggest worry of the Indian investor has been whether the long term cap gain exemption maybe tinkered with in the budget. I reckon that since the mkt has fallen pre budget, there is not much downside left post budget, provided there is no negative news in the budget. Even if the budget is neutral and does not contain any bad news, we can see a very sharp rally upwards on the budget day. Let's hope for the best.

Cheers!

jig said...

hi,technically mkts have broken all major support levels.Where do u see the mkts frm here on ?

Superstar said...

Hi Jig,

If you are invested in fundamentally sound companies making consistent profits, then you should not panic and stay put. But if you know that you own some junk stocks then this may be a good time to switch to quality stocks which you always wanted to own but could not because of their high prices.

The recent worldwide crash in the markets was due to fears of some regulatory action in the stock markets of Chindia. But actually, if you ask for my personal opinion, then I would say that the global markets are now controlled by a group of less than ten big (and I mean really BIG) fund houses who manipulate these falls at a pre-fixed time. By acting as a cartel, they make money both when the markets go up and when they go down.

Coming to technical levels on the Nifty......I just had a look at the charts and if the mkts do not bounce back immediately, the next crucial level to be tested is 3550.

Cheers!

jig said...

hi, hey thanks for the reply.
Hmm as far as my portfolio, majority of the scripts i hold are trading at a PE between 3-8.
Hey whts ur take now on FCS with MAT comin in.Thnk its negative for the sector as a whole.
Wht say?

Superstar said...

Hi Jig,
MAT is indeed a negative for the IT industry, but not a very significant one. I still feel that the IT sector is seeing robust growth and particularly talking about FCS Software, it's grossly undervalued at current levels...MAT or no MAT.

Cheers!

dips said...

dear superstar,

i want to know y u have removed kovilpatti thread from here?? are u not confident of its moving ahead...am stuck up with 1000@ 56..

dips

Superstar said...

Dear Dips,
Thanks for writing in. It was found the EPS figures for kovilpatti as given on the BSE website were incorrect. Since the actual Eps comes out to be lesser than the figures given on the BSE, that thread has been removed. Although that stock is not one of my top picks any more, I hope you will get back your cost price in a few months or earlier when the entire market recovers. Let the acquisition of Eltex make some contribution in their revenue and then this stock may see an upswing.
Even lok housing thread has been removed as the heading of the topic mentioned it as a "current pick". I do not want any new visitor to the site to be misled into believing that I'm still recommending that stock when I already gave a stop loss for that at around 230 levels.

I know that most of us (if not all) are having notional losses on our portfolios, but I hope the markets will recover as they did after the crash of last May-June.

Cheers!

grsh said...

Technical Analyst, Sudarshan Sukhani is of the view that one shouldn’t buy SRF.

Sukhani told CNBC-TV18, "SRF has nothing to comment to itself, it’s not a buying opportunity. Whatever has happened to that stock is a different issue, it’s fallen a lot for reasons, which I do not understand. But on the charts you don’t buy such stocks. If I were holding it, I would have been stopped out for a loss and just stay away from it, watch it of course it’s a different issue."

Superstar said...

Dear Grsh,
I saw the clip that you commented about on Tv. And this is why I don't like tv analysts. They are always so vague. Their comments are so vague that they can mean anything. If Sudarshan knew the "reasons" for the SRF fall (if they were anything other than the whole world's market having crashed in the last one week), then why didn't he specify them? He was totally evasive on this stock and obviously he was avoiding having to make a comment on this stock.

Cheers!

apoorv said...

Dear Superstar,
What are your views on Teledata Infomatics and Accentia Technologies. They seem to be quite undervalued and fundamentally strong, esp. Teledata.

Superstar said...

Dear Apoorv,
I have had a bad experience with Teledata in the past, so I'll be wary of it. The management does not have a good reputation. I don't know why that stock had fallen from rs.60 levels two years back to its recent lows of rs.7 approx. Now that the stock has gone up a lot from its lows, I am afraid that it may be in distribution again. Valuations have never been a problem with Teledata, but management has been. I may be wrong in staying away from this stock, but it's a case of once bitten and twice shy with Teledata.

I would prefer buying FCS Software over Teledata anyday.

Cheers!

Niraj said...

Dear Superstar, I am a medium to long term investor. Have found your analysis and comments interesting.Do you manage porfolios ? Can you forward your email and webadress on electrogroup@rediffmail.com please
Thanks. Deepak

Niraj said...

dear superstar...i find your analysis and comments too interesting. Do you manage portfolios too ? can you please email me your email id and webaddress on electrogroup@rediffmail.com.Thanks..

LONGTERM said...

dear superstar..do you manage portfolios. I am a medium to longterm investor and find your analysis and comments interesting. Kindly forward your email id and website address on electrogroup@rediffmail.com. Thanks

My World said...

srf is trading at 116 now.After the dividend was declared (40%)the price dipped slightly...........can u pls share ur views on this scrip at this time.I hold 2000 at 148>Should I average it down or can it dip even further.?