ok, another value investing blog. And a couple of knocks on wood hoping it survives.
Few investment themes have been written about as much as the Buffett-Graham one. Well documented, researched, exploited. Am throwing my lot in here as well.
I propose a deep value blog, and I mean DEEP value. Stocks that nobody seems to want to touch. But there is value, and very limited risk - according to me.
Also, since I now live in Bombay, my universe will be the BSE, NSE.
Here goes...
The idea for today is Sakuma Exports. current market cap of Rs.21cr
38cr of Cash, Made 5cr in PAT last year, will probably make more this year. Not much debt. Paid a 1.65cr dividend. The company sources agricultural commodities from farmers in India and sells them abroad. So the main source of business risk is inventory. My sense is they manage it reasonably well. Buying - hedging - selling. There were some export bans on agri-commodities last year (FY11) and the working capital cycle was stretched, so debt levels went up to 38cr, most of which was short term in nature. The company adjusted by selling more domestically.
Over 60% of the stock is held by promoters. They are buying back stock every day.
Ok, so what are the risks besides inventory.....governance, of course, which is potentially a problem with most small, listed companies in India. Also, the stock is crazy illiquid (this I can live with).
My sense is that governance will not be as much a problem here because the insiders already own a big controlling stake and are buying more. If they wanted to siphon, why buy more.
Anyhow, that's the idea for today. Welcome your thoughts.
Cheers,
Bee
Few investment themes have been written about as much as the Buffett-Graham one. Well documented, researched, exploited. Am throwing my lot in here as well.
I propose a deep value blog, and I mean DEEP value. Stocks that nobody seems to want to touch. But there is value, and very limited risk - according to me.
Also, since I now live in Bombay, my universe will be the BSE, NSE.
Here goes...
The idea for today is Sakuma Exports. current market cap of Rs.21cr
38cr of Cash, Made 5cr in PAT last year, will probably make more this year. Not much debt. Paid a 1.65cr dividend. The company sources agricultural commodities from farmers in India and sells them abroad. So the main source of business risk is inventory. My sense is they manage it reasonably well. Buying - hedging - selling. There were some export bans on agri-commodities last year (FY11) and the working capital cycle was stretched, so debt levels went up to 38cr, most of which was short term in nature. The company adjusted by selling more domestically.
Over 60% of the stock is held by promoters. They are buying back stock every day.
Ok, so what are the risks besides inventory.....governance, of course, which is potentially a problem with most small, listed companies in India. Also, the stock is crazy illiquid (this I can live with).
My sense is that governance will not be as much a problem here because the insiders already own a big controlling stake and are buying more. If they wanted to siphon, why buy more.
Anyhow, that's the idea for today. Welcome your thoughts.
Cheers,
Bee
