Grab discount upto 30% and valuable freebies under Holi Dhamaka Offer (closes on 5th April 2021). Click here for details.




SERVICES:        HIDDEN GEMS    |    VALUE PICKS    |    15% @ 90 DAYS    |    WEALTH-BUILDER


Thursday, April 24, 2014

Releasing Soon: Hidden Gem Stock of April 2014

Dear Reader,

Hidden Gem - Apr'14 research report will be released in next 48 hours. Hidden Gem stock selected for the month is a micro cap stock with total market cap of less than 50 crores.

As we know, India continues to be a high growth economy and a significant portion of this growth comes from FMCG sector particularly consumer product companies. Earlier, the consumption of packaged / processed food products was confined to urban population but now slowly with the rising literacy and income levels of rural population; the market for ready food products has expanded to smaller towns.

India’s Food Processing Industry is one of the largest industries in the country – it is ranked fifth in terms of production, consumption, export and expected growth. The Indian food industry is estimated to be worth over US$ 200 billion and is expected to grow to US$ 310 billion by 2015. India is one of the world’s major food producers but accounts for only 1.7 per cent of world trade in this sector – this share is slated to increase to 3 per cent by 2015.

Food processing industry has been growing at over 13 percent despite the global slowdown. And now the government is aiming to double the turnover in the next five or six years by setting up mega food parks to attract global capital. The future of the industry looks bright, as the Government of India has taken several measures for developing this industry.

Hidden Gem Stock of April 2014

Our Hidden Gem stock of Apr'14 belongs to food processing industry. Our team has followed Walter Schloss priniciple's while finalizing Hidden Gem stock of the month. Walter J. Schloss (August 28, 1916 – February 19, 2012) was a well-regarded value investor, as well as a notable disciple of the Benjamin Graham school of investing.

The legendary Walter Schloss checked the stock on the following 4 criteria to determine if the stock merits a place in the portfolio:

• Zero or very low debt equity ratio
• High Promoter holding
• Dividend yield of at least 3%
• Stock purchase price lower than book value

This company satisfies all 4 criteria's and offer good safety with limited downside risk due to any market correction in near future.

Few facts which make this company a right investment candidate for long term:

1. Company is increasing its capacity under ongoing expansion program which will help company to increase its top line significantly in coming years.

2. More than 60% of revenue is coming from exports and company operating margins have seen significant improvement in current financial year compared to last 3 years.

3. Company offer high quality products and its facilities are certified with international standards to ensure product quality, hygiene and safety to meet international requirements.
4. Management has rewarded share holders by paying regular dividends since last 6 years, dividend yield at current market price is above 5.

5. Promoters share holding is well above 50% since last many years which is good by all means for such a micro cap company.

6. In terms of valuation, company is trading at trailing PE ratio of 5 and considering increase in its revenue from ongoing expansion, its a good bet for long term investors.

7. Last but not the least, ROE which was stagnant since last 3 years has significantly improved this year and is expected to improve further going forward.

Grab our Hidden Gem - Apr'14 research report and invest small portion of your savings in it for long term.
On activation of your Hidden Gems subscription, you will also receive 2 freebies at no additional cost!

1. Saral Gyan 5 Hidden Gems - 5-Baggers in 5 Years Report - April'14 update
2. Saral Gyan eBook - "How to Grow your Savings?" worth Rs. 599.

Subscribe to Hidden Gems annual subscription (12 monthly research reports) @ Rs. 7,500 [$ 150] and start investing systematically in fundamentally strong small cap companies. To know more about Saral Gyan annual subscription services and discounts available on combo packs, click here.

In case of any queries or doubt, do not hesitate to write back to us.

Wish you happy & safe Investing!


Team - Saral Gyan,
Saral Gyan Capital Services.