Mackwoods Energy PLC - MEL

investcsesl · 1 Mackwoods Energy PLC - MEL Tue May 12, 2015 12:52 am

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Mackwoods Energy PLC - MEL

My target price for MEL is Rs. 7.50 – Rs. 8.00 within one month, on or before 10^th June 2015 and to reach all time high for long term investment.

I think it is worth buying MEL at current pricing levels (Between Rs. 6.20 to Rs. 6.50) for an investment due to following reasons;

· - Net Asset Value per share – Rs. 7.25 as at 31 December 2014

· - Director purchased 54,988 shares between 6.30-6.50 during 17 to 19 March 2015

· - All time low – Rs. 5.80

· - All time high – Rs. 16.30

· - IPO Price – Rs. 14.00

· - Currently trading at Rs. 6.20

· - Dividend per share – Rs. 0.10 (Expected within 03 months)

· - Top 20 share holding - 95.93%

· - Company is managing funds effectively for new developments without going for right issues

· - Future potential in the renewable energy segment in the country and therefore specially in the Hydro / wind and Solar power segments, MEL can perform better in coming years

Please note that I have observed artificial downward pressure in the share price and collection at the same time between Rs. 6.50 to Rs. 6.20.

MEL is a risk free investment and value for money at current prices.

Attachments

IPO Report - MEL.pdf: IPO Report by Lanka Securities Research; You don't have permission to download attachments.; (1.3 Mb) Downloaded 13 times

Raj Rajaratnam · 2 Re: Mackwoods Energy PLC - MEL Tue May 12, 2015 11:52 am

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Are you sure MEL going to pay a dividend?
It's operating with a loss for last 9 months in 2015. I dont think the business had a superb last quarter.
This is Chris Nonis's company. Do you think there will be support from the current government for get new business opportunities?
Attractive business model and good management, but not sure about short term prospects.....
Experts please give your comments on MEL.................

investcsesl · 3 Re: Mackwoods Energy PLC - MEL Tue May 12, 2015 11:44 pm

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Below is the comparison of quarter wise Earnings Per Share (EPS) of MEL

Period	FY 2013-14 EPS	FY 2014-15 EPS
1^st Quarter - 30th June	+0.06	-0.06
2^nd Quarter – 30^th September	+0.09	+0.06
3^rd Quarter – 31^st December	+0.01	-0.03
4^th Quarter – 31^st March	+0.38	Pending

Yes, company has incurred a marginal accumulated loss of -0.02242 per share up to 31^st December 2014.

But, It shows 4^th Quarter is the dominant part of earnings in the financial year. I don’t think the company has incurred un-forcing hit during last quarter when considering the weather pattern.

Also please note all the hydro power companies have done better during fourth quarter of FY15.

I’m not recommending the share to buy at Rs. 14/= as we saw in the initial attachment from the expert research, But I’m highlighting the value of it at 56% discounted price of Rs. 6.20 -6.50.

Teller · 4 Re: Mackwoods Energy PLC - MEL Wed May 13, 2015 2:41 am

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Running with a huge loss. How can they pay in coming quarters? im not confident about their growth

Raj Rajaratnam · 5 Re: Mackwoods Energy PLC - MEL Wed May 13, 2015 12:02 pm

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May be Chris Nonnis using some kind of creative accounting for the 4th Quarter....
But interesting analysis. Appreciated investcsesl...... Thank you
I have already MEL in my watch-list...........

investcsesl · 6 Re: Mackwoods Energy PLC - MEL Wed May 13, 2015 12:18 pm

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Raj Rajaratnam wrote:May be Chris Nonnis using some kind of creative accounting for the 4th Quarter....
But interesting analysis. Appreciated investcsesl...... Thank you
I have already MEL in my watch-list...........

Thanks Raj, I feel I'm not alone.

I don't want MEL to present a creative accounting for the 4th quarter. What I'm expecting is the real picture of on going projects and pending Proposals.

Unfortunately I'm not in a position to buy nowadays. I will let you know the reason later. If you can collect at 6.20 - 6.30 levels, I will buy the full quantity from you at 6.50 after one month period if the company reports are not much attractive, otherwise you will not sell me at that level.

investcsesl · 7 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 10:43 pm

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Below is the updated table with the latest results.

Period	FY 2013-14 EPS	FY 2014-15 EPS
1^st Quarter - 30 June	+0.06	-0.06
2^nd Quarter – 30^th September	+0.09	+0.06
3^rd Quarter – 31^st December	+0.01	-0.03
4^th Quarter – 31^st March	+0.38	+0.26
Total	+0.49	+0.24

It is nice to see a positive result at the end resulting NAV to cross Rs. 7.50.

Turnover increased by 3.4% but due to pressure in margin, and increased operational expenses cause the reduction of final profit.

But I got to know Mackwoods Generators are having good reputation among industrial zones and therefore with the aggressive sales promotional activities, company will secure better profit margins in the future.

http://markets.ft.com/research/Markets/Tearsheets/Summary?s=MEL.N0000:CSE

Mackwoods Energy PLC - MEL Mel_su10

I don’t think this is a company should be traded very close to the all time law of 5.8. This is a very good opportunity for medium term investors to buy and hold MEL between 6.2 - 6.5 due to below reasons.

a)      IPO price Rs. 14.00
b)      Only 1.32 million shares in the free float according to FT
c)       96% shares in the hand of Top 20 list and balance only 3.9 million shares
d)      MEL can be a victim of big players due above reasons as they only need Rs. 20 million cash injection to move the share back to Rs. 14. (Calculation will be shown separately in – “Why big players behind illiquid shares”)

Teller · 8 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 11:11 pm

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For me so far i dont see a much reasonable earnings from MEL. All Hydro power units run with maximum efficiency with high profit but MEL unable to perform so far. We have to wait till next 2_3 quarters. So far MEL stands for The lowest earnings in the sector....

BvsB · 9 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 11:21 pm

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investcsesl wrote:Below is the updated table with the latest results.

Period FY 2013-14 EPS FY 2014-15 EPS
1^st Quarter - 30 June +0.06 -0.06
2^nd Quarter – 30^th September +0.09 +0.06
3^rd Quarter – 31^st December +0.01 -0.03
4^th Quarter – 31^st March +0.38 +0.26
Total +0.49 +0.24

It is nice to see a positive result at the end resulting NAV to cross Rs. 7.50.

Turnover increased by 3.4% but due to pressure in margin, and increased operational expenses cause the reduction of final profit.

But I got to know Mackwoods Generators are having good reputation among industrial zones and therefore with the aggressive sales promotional activities, company will secure better profit margins in the future.

http://markets.ft.com/research/Markets/Tearsheets/Summary?s=MEL.N0000:CSE

I don’t think this is a company should be traded very close to the all time law of 5.8. This is a very good opportunity for medium term investors to buy and hold MEL between 6.2 - 6.5 due to below reasons.

a)      IPO price Rs. 14.00
b)      Only 1.32 million shares in the free float according to FT
c)       96% shares in the hand of Top 20 list and balance only 3.9 million shares
d)      MEL can be a victim of big players due above reasons as they only need Rs. 20 million cash injection to move the share back to Rs. 14. (Calculation will be shown separately in – “Why big players behind illiquid shares”)

Highly Appreciate your great work...

But ,do you think MEL 's earnings justify HNWI to attract to this share...?

BvsB · 10 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 11:25 pm

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One plus point- Dr.C. Nonis is in the driving seat... Wink

Teller · 11 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 11:35 pm

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Yes,he is in the driving seat, he can drive but has he a driving license?

investcsesl · 12 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 11:44 pm

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BvsB wrote:

But ,do you think MEL 's earnings justify HNWI to attract to this share...?

Thanks BvsB. I don't find any risk entering MEL at current prices. No need big HNWI to enter to drive back as very little shares in the free float.

investcsesl · 13 Re: Mackwoods Energy PLC - MEL Wed Jun 03, 2015 11:52 pm

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Teller wrote:For me so far i dont see a much reasonable earnings from MEL. All Hydro power units run with maximum efficiency with high profit but MEL unable to perform so far. We have to wait till next 2_3 quarters. So far MEL stands for The lowest earnings in the sector....

I agree with you Teller, still MEL has to improve in some areas to show the sustainable profits.

But if we wait till 2 - 3 quarters to see the actual turnaround, we will not be able to grab the current opportunity.

Big companies in the sector such as VPEL trading above 3.3 times NAV. But still MEL is 17% below the NAV.

investcsesl · 14 Re: Mackwoods Energy PLC - MEL Thu Jun 04, 2015 12:52 am

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Below workings shows how MEL can be beaten by the big players without putting single cash from the pocket.

http://forum.srilankaequity.com/t43566-why-big-players-behind-illiquid-shares#267825

nimantha80 · 15 Re: Mackwoods Energy PLC - MEL Thu Jun 04, 2015 5:03 am

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6.1 best buy.earlier I bought even at 5.9 and dumped 60000 shares 7.5 and 7.6

investcsesl · 16 Re: Mackwoods Energy PLC - MEL Thu Jun 04, 2015 11:17 am

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nimantha80 wrote:6.1 best buy.earlier I bought even at 5.9 and dumped 60000 shares 7.5 and 7.6

Thanks for sharing your experience nimantha80. You have picked the exact bottom at that time and rewarded a plus point from me.

During last down turn even Director has purchased 54,988 shares between 6.30-6.50 during 17 to 19 March 2015 giving 20 -30 cents premium for last quarter profits.

Therefore I think no much of selling can be expected between 6.30 to 6.50 except some change hands from own accounts.

TraderCSE · 17 Re: Mackwoods Energy PLC - MEL Wed Jun 10, 2015 1:16 am

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investcsesl, I'm following all your posts with good analysis. Appreciate your input.
As I mentioned to Teller and Raj Rajaratnam, I lost almost all my money trading with PCH, PCHH, PCP, Greg Warrants, TWOD, Blue, CITK, CLPL warrants, JKH Warrants, BIL, REEF Warrants, CLND etc....

I bought OSEA, Sold JKH Warrants, Bought AEL and little of MEL. But my broker told me lot of selling of MEL from the director (chris nonis) at 6.20 so don't buy. What is the reason for it?

investcsesl · 18 Re: Mackwoods Energy PLC - MEL Wed Jun 10, 2015 7:57 am

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TraderCSE wrote:investcsesl, I'm following all your posts with good analysis. Appreciate your input.
As I mentioned to Teller and Raj Rajaratnam, I lost almost all my money trading with PCH, PCHH, PCP, Greg Warrants, TWOD, Blue, CITK, CLPL warrants, JKH Warrants, BIL, REEF Warrants, CLND etc....

I bought OSEA, Sold JKH Warrants, Bought AEL and little of MEL. But my broker told me lot of selling of MEL from the director (chris nonis) at 6.20 so don't buy. What is the reason for it?

Dear TraderCSE
Sorry to hear that you lost trading with craps in the above list. It’s really unfortunate that JKH Warrants also in that list due to some aggressive promotions causing JKH warrants trading at the premium price.

OSEA and AEL will be a short to long term good investments, but little margin for trading.
With respect to MEL, I found the real value of it at Rs. 6.20 that’s the reason I posted this thread. But the share was being in the collection mode and therefore it was disturbed the first phase of collection by some big parties.

Thank you for sharing the information. I don’t want to know who your broker is, but I don’t expect Dr. Chris Nonis to sell a single share as low as Rs. 6.20. Also if you see the annual reports and quarterly financial statements he has not sold a single share after the IPO.
Your same broker (one day after they finished the collection) will tell you that the director is now buying so better to buy, but at a price 10-15% higher than the current price.

Yes, I too have noticed some artificial downward push by a manipulator at the last hour of trading so that share price will be ended up in a negative note and they can collect at lower price next day morning when traders sells due to margin calls.

Anyway, this is not a time for you to trade with MEL on margins, but if you buy and hold for minimum of one year, you will get the real benefit out of it.

nimantha80 · 19 Re: Mackwoods Energy PLC - MEL Wed Jun 10, 2015 10:21 am

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MEL some interest.

investcsesl · 20 Re: Mackwoods Energy PLC - MEL Wed Jun 10, 2015 11:22 am

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Better timing will give you better results so better to be patient.

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Mackwoods Energy PLC - MEL

1 Mackwoods Energy PLC - MEL Tue May 12, 2015 12:52 am

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2 Re: Mackwoods Energy PLC - MEL Tue May 12, 2015 11:52 am

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