This nice article lists the various tax, procedural and legal problems associated with the current stock lending program
March 9, 2010
March 6, 2010
Tide vs RIN
A very intense detergent (laundry soap) war is going on in India. HUL (Hindustan Unilever) launched a direct assault against P&G in the media. It is showing an advertisement where it not only shows the Tide product, but directly compares its RIN with it and claims it is better. Simultaneously it has launched a legal complaint against P&G’s Tide Naturals. Its lawyers question P&G’s misleading claim of being natural when all of the ingredients of the product are chemicals and are not of natural origin.
P&G has also launched a countersuit against HUL against legality of showing its products in its advertisements. Apart from all this both companies are trying to cut prices, go overboard on promotions and advertisement. Lets see who emerges out as a winner.
March 5, 2010
NMDC FPO
A friend of mine requested me to analyze this FPO and I go by my usual style:
There are always a 100 analyst reports which will tell you why one should invest in the stock. Hence I try to find out red flags, or reasons why one should not.
1. Please don’t look at the pre existing price of the stock because the govt share-holding is 98.36%. Which basically mean that there is hardly any shares for trading.
2. The company has made other profit of 884cr which has increased from 105cr over the past 5 years. This constitutes more than 10% of sales (not profit) Hence its EPS figures are under question.
3. When a company engaged in mining makes a profit of 4.3 thousand cr on a sales of 7.5 thousand cr, I become suspicious about how sustainable this high margins are
4. In a capital intensive industry like mining, the company has depreciation of less than 1% of sales. This raises question of how old the machinery is and how long will the company able to operate.
5. The company has 9.7 thousand cr of cash in its balance sheet. Which is more than 1 year of sales. WHY?????
6. PE of 39.22 of a company which has no plans to buy/operate new mines in the near future?
All this makes me think that the price of NMDC is unsustainable in the long term. One might still invest in the stock for listing gains.
March 4, 2010
Feeling Lucky
A friend of mine recently forwarded me a nice article which lists down the differences in attitude of lucky and unlucky people. The author believes that by changing one’s outlook towards life one can also be lucky.
You might not have to agree completely to what the author says but the article has a lot of merit. So do give it a read.
March 1, 2010
Review: Taj Bengal
Yesterday I was invited for dinner at Taj Bengal, one of the most expensive restaurants in this part of the country. To my surprise, the chef had added artificial green colors in the Palak Paneer.
Holi is round the corner but that does not mean that I should start eating artificial chemical poisons. I oppose the use of colors because of these 3 reasons:
1. These are chemicals which are harmful for the body
2. One sub-standard and poor quality food articles are adulterated with artificial colors
3. It cheats the consumer because colors give a false impression of quality and enable the merchant to charge extra for the sub-standard products.
All packaged food item need to carry a health warning if they contain colors, preservatives and other harmful substances. I think its high time that restaurants esp. the ones that charge exorbitant costs also need to carry statutory warning for their malpractices.
