Counters below 10 PE for Long Term Investments

ONTHEMONEY · 1 Counters below 10 PE for Long Term Investments Tue Aug 04, 2015 5:44 am

ONTHEMONEY

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Hi Guys,

We are experiencing strong CSE with healthy cash position currently. The overall sentiments will improve further with more positive outcomes such as a stable government, Quarterly results,etc.

Pls watch out following counters for the next 2-3 years and forward specially banking and finance sector which has high chance to record exceptional results in the short to medium run. It is because of reprising of cost of funds, improved NIM, fee based income, improved economic activities,etc. Further poultry sector is predicted earn extra ordinary results.

Counter - Expected Price

LFIN - Rs 220/- (Strongly Recommended)
VFIN - Rs 110/- (Strongly Recommended)
SDB - Rs 210/-
HNB - Rs 300/- (Recommended for LT)
SAMP - Rs 330/- (Recommended for LT)
BFL - Rs 200/-
TAFL - Rs 120/-
BFL - Rs 90/-
ACL - Rs 120/-

Some of them have already published reports and have recorded significant results and some not. These results are calculated considering the forward PE. Pls analyse before investing.

Happy Trading

Nuwan Prasad · 2 Re: Counters below 10 PE for Long Term Investments Tue Aug 04, 2015 8:19 am

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Thank you

ONTHEMONEY · 3 Re: Counters below 10 PE for Long Term Investments Tue Aug 04, 2015 10:58 pm

ONTHEMONEY

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Why I recommend Banking & Finance Sector in Current Sentiments

The banking and finance sector has a high potential to record an exceptional performance due to strong growth in its loan book, improved margins and the closer tab on costs coupled with operational efficiencies achieved during recent periods.

Further it is expected that the strong pick up in credit growth in the economy will bode well for the banks and finance companies to expand its core banking operations in the second half.

Furthermore the sector has made conscious efforts on improving the high yielding asset classes in its advances mix while identifying market niches.

Sector has made concerted effort towards improving its non-fund based income sources. This can be seen as a prudent measure in a bid to ease off the over dependence on NII which could come under pressure due to monetary and fiscal policy changes.

Therefore considering the above facts, I would like to make you guys watch out for a Banking & Finance Sector run in line with Q2 financial reports to be released in parallel to Chicken run. This will lead by the finance companies specially DP companies. LFIN has already started.

Happy Investments

jayathu · 4 Re: Counters below 10 PE for Long Term Investments Tue Aug 04, 2015 11:07 pm

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Motor vehicle section buy COLO.n

jayathu · 5 Re: Counters below 10 PE for Long Term Investments Tue Aug 04, 2015 11:14 pm

jayathu

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Add elpl colo n rhl to that list of P/E ratio below 10 stocks

ONTHEMONEY · 6 Re: Counters below 10 PE for Long Term Investments Wed Aug 05, 2015 10:19 pm

ONTHEMONEY

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Hi Guys,

The overall sentiments looks very much positive contributed by positive facts such as favorable Quarterly reports, stable government for the next 5 years, Foreign direct investments, etc.Volkswagen has agreed to invest 30 million US dollars to set up a vehicle assembly plant in Sri Lanka - BOI Chairman. This is because that they are confident over the next 5 years.

Thanks for the comments Jayathu. What I have included in the list are counters which displays signs of movement considering the overall undervaluation due to lower PE. VFIN,LFIN,ACL,BFL,TAFL,GRAN already started the rally and continue its potential considering the positive outlook and overall sentiments of the market. Occasional hick ups could be witnessed. Definitely coming days will become a booster to CSE with above stocks.

Today I came to know very important information about the growth in leasing product of finance companies of DP. They have recorded highest ever leasing growth and during July month 2/4 of the leases were done out of total leases for the 7 months in 2015.

Further due reprising of interest expenses (renewal of fixed deposits at a lower interest rate) has contributed significantly to the NII. If you analyse the latest quarterly results of Siyapatha Finance, LFIN, CALF, etc have witnessed this trend. It has improved the bottom line significantly. Hence its very positive and clear about the super returns of the finance sector in coming periods. I expect this constant growth trend to continue in remaining months consistently without any wave effect.

Happy Investments

DANIDU · 7 Re: Counters below 10 PE for Long Term Investments Thu Aug 06, 2015 12:44 am

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Thank you ONTHEMONEY for your valuable comments.

peacockman · 8 Re: Counters below 10 PE for Long Term Investments Thu Aug 06, 2015 7:38 am

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Thanks Dear ONTHEMONEY

for your in time news!

VALUEPICK · 9 Re: Counters below 10 PE for Long Term Investments Fri Aug 07, 2015 4:41 pm

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Undervalue stocks and stocks which are trading great discount to the market will adjust according to the stage of market and according to P/E ratio of bull market in the remaining stages of current bull market. In a strong market, prices of many stocks will go up. It is time to study all of above stocks. Some can be life time opportunity.

peacockman · 10 Re: Counters below 10 PE for Long Term Investments Sat Aug 08, 2015 8:05 am

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Some of the under valued stocks have been manipulated nearly & now they are 5 times or 10 times bigger than 1 year or 2 year back. We should consider this matter also.

Gainer · 11 Re: Counters below 10 PE for Long Term Investments Sat Aug 08, 2015 11:50 am

Gainer

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RENU PE 6.11

ONTHEMONEY · 12 Re: Counters below 10 PE for Long Term Investments Sat Aug 08, 2015 10:50 pm

ONTHEMONEY

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Hi Guys,

I have analysed the QoQ financial performance of VFIN during the last 2 years. It suggest that the company is naturally strives to perform exceptionally well in Q3 and Q4 each year.

Year

Period

Net Profit
(In '000s)

PER

PBR

DPS

EPS

NAV

Reserves

Retained
Earnings

2014	Y	372,787	5.02	1.23	8.97	36.44	16,758	929,735
2014	Q4	119,970	3.90	1.23	11.55	36.44	297,282	929,735
2014	Q3	105,518	4.53	1.36	10.16	33.81	280,923	836,771
2014	Q2	81,207	5.95	1.48	7.82	31.35	405,021	610,312
2014	Q1	66,092	5.44	1.19	1.59	29.09	362,162	559,451
2013	Y	303,910	4.06	1.05	7.31	28.42	345,462	548,128
2013	Q4	100,124	3.08	1.05	2.41	28.42	345,462	548,128
2013	Q3	67,966	4.40	1.10	1.64	26.10	314,215	483,079
2013	Q2	65,325	4.77	1.23	1.57	24.31	288,618	434,128
2013	Q1	70,493	4.46	1.25	1.70	24.25	245,581	451,461

It indicates the pattern of the company where most of the yearly profits were exploited during the last 2 quarters. Further if we can compare QoQ 2014 Q1 vs 2015 Q1, we can identify a growth of 45% in profits which is a positive sign. However VFIN tactically performing well during the Q4 of an year. Therefore the profits for the Q1 is lesser than Q4.

Certain companies have their own ways and means of aggression in performance during an year in relation to the competition, regulators, in house capacities, etc.. Anyway now it is trading @ forward PE of 7.5x times. Hence if we anticipate the trend to continue in 2015/2016 FY we can expect the counter to move towards Rs 110/-. Therefore I would like to recommend VFIN as a mid term investment.

Happy Investments