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Tuesday, August 7, 2012

Its Time to Invest, Hidden Gem - Aug'12 is Released

Dear Reader,

Our equity analysts have explored undervalued small cap stock of Aug'12. Hidden Gem of the month (research report released today by Saral Gyan equity analysts team) belongs to engineering sector. One strong factor of recommending this stock is the valuations which ensures that there is nothing to loose but giving a great opportunity to gain over a period of next 6 to 9 months.

What makes this company attractive is its performance of last one year, high dividend yield and under valuation. Company is mainly into exports and recently completed its expansion which will further boost up company performance in FY 2012-13. After stellar performance in 2011, stock is currently trading at P/E multiple of 3.4 for FY 12-13.  

Our equity analysts are confident that stock can easily deliver 70-100% returns from current market price in next 6 to 9 months. Its a micro cap company and looks attractive in terms of valuations and giving good opportunity for investment. 

Few facts which ensures that stock at current market price offers great value for money and is a strong multibagger candidate.

1. Market cap of 32.5 crores against top line of 76 crores. Market cap to sales is 0.43. 
2. Currently the stock is trading at historic PE multiple of 4.5, considering expected growth in FY 12, company is trading at FY 12 PE multiple of 3.4.
3. Operating margins and net profit margins (above 10%) of the company is better compared to other larger players in the same segment. ROE and ROCE is above 20% since last 4 years.
4. Company has registered bottom line growth of more than 90% in last 2 quarters.
5. Company is paying regular dividend since 2005, dividend yield at CMP is 2.5% which is very good for such a micro cap company.
6. Promoters holding is 69% which is good by any means for such a small company.

Considering all above points into account, our equity analysts team believe that stock price will zoom once company announces its robust 1st quarter results (Company will announce its 1st quarter results in 2nd week of August). So do not miss and grab this opportunity before other investors do.

Saral Gyan Hidden Gems outperforms small cap index by whopping 40.7%, gave average returns of 32.3% against negative returns of -8.4% of small cap index. If you are not a Hidden Gems subscriber and wants to invest intelligently in small cap stocks to grow your wealth in long run, you can subscribe to Saral Gyan - Hidden Gems.

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Also Read: 4 Hidden Gems which Doubled Investors Money in 1 Year
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Regards,

Saral Gyan Team.