Showing posts with label INVESTMENT. Show all posts
Showing posts with label INVESTMENT. Show all posts

Monday, 26 January 2015

ATUL AUTO LIMITED - What's the future

As the name suggest, It is an auto manufacturing company. The auto market is still a big market in India. It has the capacity to expand across India. 

If you look at the past stock price,  Rs 135 in Feb-2014 to current price Rs 630,  It surely has been 4 times. The growth pattern of the stock might not be the same, but it is definitely a fine catch at the moment.

The Key financial ratios are :


Key Financial Ratios
2014/03 2013/03 2012/03 2010/03 2009/03
Per Share
EPS 27.16 23.62 21.31 7.76 0.78
CEPS 31.91 27.67 27.14 14.37 5.11
Book Value 86.11 67.72 76.68 68.97 57.5
Dividend/Share 7.5 6 5 2 0.5
Operating Profit / Share 41.36 36.53 37.71 22.46 4.46
Net Operating Income / Share 392.04 331.62 407.48 204.91 200.86
Free Reserves / Share 0 0 65.95 46.59 41.17
Profitability Ratios
OPM 10.55 11.01 9.25 10.95 2.21
GPM 9.33 9.79 7.82 7.72 0.12
NPM 6.88 7.08 5.22 3.75 0.38
RONW 31.53 34.88 27.62 13.4 1.53
Liquidity ratios
Debt/Equity 0 0 0.06 0.68 1.04
Current Ratio 1.8 1.51 1.29 1.57 1.96
Quick Ratio 1.33 1.04 0.47 0.66 0.83
Interest Cover 139.59 104.29 36.84 4.48 2.12
Turn Over Ratios
Sales/Total Assets 10.78 14.55 27.91 143.43 10.25
Sales/Fixed Assets 8.07 7.57 7.17 4.73 2.8
Sales/Current Assets 4.78 4.94 6.3 6.77 3.71
Miscellaneous
No of Days of Working Capital 38.58 29.49 18.61 35.12 46.35
CAR 0 0 0 0 0

The stock has been rising pretty high and every time it is rising in a range of 2% to 4%. One should be cautious buying the stock at this level. However, the auto stock has been targeting  for a double digit growth of 10%. It is surely something one should be watching,

Other important point to note is that GOLDMAN SACKS buys 4 lakh shares of the company. BE cautious while if you looking for short term, you can fall either ways. You can try a SIP by investing small amounts as it drops.




Monday, 28 July 2014

Keys to retire Comfortably

1. Invest Early

Start saving money as soon as you start earning. you should save at least 30% of your salary i.e, if you are earning Rs. 10000 , you should save at least Rs. 3000. You should invest this money in a recurring deposit or an FD, PPF so that money is not lying idle in your account.

Sunday, 27 July 2014

Swing Trading

What is Swing Trading?

Swing Trading is to ride the momentum in the direction of the trend.Swing traders hold stocks for days or weeks playing the general upward or downward trends.It is also called momentum trading. You can roll over your money after making short term gains. In a short span of time, you can build up  money.

How does Swing Trading work?

The basic strategy of Swing Trading is to select a strongly trending stock after its period of consolidation or correction. These stocks rebound back after correction. One can sell the stock after 3-10 days depending on the percentage profit bench marked between 3 to 5%. The money can be roll over again in new stocks and trends. One can build a pool of stocks , study their patterns and ranges.
   

What are the benefits of Swing Trading?

Swing Trading works best for part-time traders as it does not require that full time focus and attention like in day trading.  Swing trader focus on the momentum and trends of stocks. There are chances of bigger gains as they are bought after consolidation or correction. You also do not require a high speed connection to do swing trading. You can call your trader to just sell of stocks and even if you do not have high speed  connection , you can sell at a desired rate as you are not trading on day's momentum.You can place an order at the start of the day and it it can be executed in the day when desired price is reached.

Thursday, 24 July 2014

Fixed Deposits - Is it a Good Idea


Fixed Deposits are one of the most popular deposits specially with a fixed income group. Are these a good invest ? ....

We need to understand the taxation rules and the interest provided by banks to analyze if they are good investment.

Let us take a scenario.

Principal  Amount  / Deposit Amt    : Rs 10000 
Interest  Rate    : 9% 
Period of Deposit in Months  : 36 months 
     
Total Interest Received : Rs. 3060
Total Maturity Amount : Rs  13060    

Interest earned on fixed deposit (FD) is taxed at the tax slab rate of the individual. So, if your tax slab rate is 20%, you will pay 20% on the interest earned. (i.e 20% of Rs 3060 equals Rs 612). So, effectively interest earned is Rs 2448.

Effective Total Maturity Amount = Rs. 12448
Effective Interest Rate : 7.4%

Would you decide to invest in an FD, if the net return from it was viewed 7.4 per cent instead of an overall return of 9 per cent?


Formula for Calculation :

A = Final Amount on Maturity
P = Initial Amount (i.e. Principal Amount)
r =  Interest rate
n = number of times the interest is compounded per year (i.e. for monthly compounding n will be 12, for half year compounding it will be 2 and for quarter it will be 4
t = number of years for which amount is invested




Sunday, 29 June 2014

Gold Investment - Is it Good idea?




India is always obsessed about gold. We buy on religious occasions like Akshya Trithiya, Diwali etc  wedding functions and as gifts.We also still consider it as a savior against economic bad situations.

Monday, 23 June 2014

Investment ideas for Young People



Saving money is worthwhile for later in life. It is important we invest early so that we have a fair amount of money for one's adult life.

1. Manage your money





The most important point is to set a goal of how much wealth you want and by when. It is important that you factor in the inflation for each year. You can take the inflation average for last 3 years.
Make a requirement list of all the important milestones in your life(Know like child education, retirement age, marriage, health insurance).

Decide Future Requirement based on 3 points:

i) Requirement that exist today and will do so in future like food expenses, fuel expenses.Calculate your monthly spent today on the requirement.  You can add and decrease the money depending on your future requirement. Add the average inflation to these requirements per year and calculate money you will require for future.

ii) Requirement that do not exist today and will do so in future like high medical expenses in old age, child higher education. calculate average money spent on these requirements with the assumption that these requirement exist today.Add the average inflation to these requirements per year and calculate money you will require for future.

iii) Requirement that exist today but cease to exist in future like monthly school expenses, old age parental insurance requirements.Do not consider these in your future expenses.


This kind of planning will give you a fair idea of your future requirements.

2. Save Money




Save a small amount of money every money. Approximately, 20% of your salary. These amounts will lead to huge bank balance later.

3. Put money in Multi-Option deposit Account



The MOD (Multi-Option Deposit) account is a combination of your transactional (debit) account and deposit account. These are the Time Deposits but at the time of need for funds, withdrawals can be made in units of Rs.1,000/- from the deposits by issuing a cheque from Savings Bank Account or from ATM / branch or through any other channel. This kind of deposits is completely liquid. The sum of available balance in the transactional account and MOD balance can be used for issuing cheques or withdrawal or making any other payment. The intrest in MOD account is generally the same as in fixed deposits.

4. Invest in Bonds





Bonds pay interest semiannually, which means they can provide a predictable income stream. Ypu can invext in bonds for that expected interest income and also to preserve their capital investment.

5. Do SIP



Every month on a specified date an amount you choose is invested in a mutual fund scheme of your choice. Being disciplined - It’s the key to investing success. You can commit an amount of your choice (minimum of Rs. 500 and in multiples of Rs. 100 thereof*) to be invested every month in one of the schemes.


Think of each SIP payment as laying a small step in a building block. One by one, you’ll see them transform into a building. You’ll see your investments accrue month after month.

6. Recurring Deposit


Invest in Recurrimng Deposits. Recurring Deposits are a special kind of Term Deposits offered by banks in India which help people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.[1] It is similar to making FDs of a certain amount in monthly installments, for example Rs 1000 every month. This deposit matures on a specific date in the future along with all the deposits made every month. Thus, Recurring Deposit schemes allow customers with an opportunity to build up their savings through regular monthly deposits of fixed sum over a fixed period of time.

Taxation of Recurring Deposit Tax Deducted at Source ( TDS ) is not applicable on RDs. However interest from RD is not tax free. Income tax is to be paid on interest earned from a Recurring Deposit at the rate of tax slab of the RD holder.

7. PPF



The public provident fund is established by the central government. One can voluntarily open an account with any nationalized bank,selected authorized private bank or post office. The account can be opened in the name of individuals including minor.

The minimum amount is Rs.500 which can be deposited. The rate of interest at present is 8.7% per annum, which is also tax-free. The entire balance can be withdrawn on maturity. Interest received is tax free. The maximum amount which can be deposited every year is Rs. 1,00,000 in an account. The interest earned on the PPF subscription is compounded. All the balance that accumulates over time is exempt from wealth tax. Moreover, it has low risk – risk attached is Government risk. PPF is available at post offices and banks.


Interest earned is fully exempted from tax without any limit. Annual contributions qualify for tax rebate under Section 80C of income tax. Contributions to PPF accounts of the spouse and children are also eligible for tax deduction. Balance in PPF account is not subject to attachment under any order or decree of court. But, Income Tax authorities can attach the account for recovering tax dues. The highest amount that can be deposited is 1,00,000. Tax bracket for PPF is EEE (i.e. Exempt,Exempt,Exempt). So contribution is exempted under 80C, Interest earned is tax exempted and withdrawal is also tax exempted

One can withdraw the investment made in 1st year only in 7th year. However, loan against investment is available from 3rd financial year.

8. NPS


New Pension System (NPS) is an initiative taken by Pension Fund Regulatory Development Authority (PFRDA). The scheme is aimed at promoting income security for its investors at their old age and is also an investment tool that provides market-based returns.


This is a defined contribution pension scheme, meaning under NPS a customer will invest a pre-defined sum every month in a fund chosen by him/her and at the time of retirement will have a lump sum amount depending on the performance of that fund.


This is different from the earlier pension system where the amount one received every month after retirement was set by the government and increased periodically (also called defined benefit system). Those who are under the NPS, after retirement they will have to depend on their corpus for their monthly pension. Although started as a pension system only for the government employees, now NPS has been opened to people from the private sector. NPS is regulated by Pension Fund Regulatory and Development Authority ( PFRDA).


Saturday, 21 June 2014

7 Deadly Mistakes of Day Traders

1. Unplanned Trading

The most important move a Intraday trader can make is to develop a trade plan.
the trade plan should include the money you are gping to invest. The money has to be consistent and avoid crossing the line. Also, one should plan the entry and exit point and stop loss points before entering in trade.

Wednesday, 18 June 2014

Do' and Don'ts of Intraday Trading


  1. Intraday trading is independent each day irrespective of how it was yesterday, week before, and month before. It has to be tracked every day in the right fashion depending on the market that day.
  2. Track the market each day.
INTRADAY TRADING



Intraday trading is the most riskier kind of trading. It is also very stressful kind of trading. You have to monitor investments every minute.Any time the market can go up and any time it can go down.  It is not everyone cup of tea. You need to have a high risk appetite to do this kind of trading.