1. While doing my research for PFS (PTC Financial services), I glanced through the results of the parent company. To me, this company merits the true " Value pick tag". I do present my arguments below.
2. As on date, PTC is avalable at Rs 46 i.e a market cap of 1350 crores. The company (as per balance sheet on 31 Mar 2011) has Cash (in bank and Fixed deposits) to a tune of 700 crores. It has zero debt.In simple words, the company is available at (1350-700)i.e 650 crores.
3. The company has a 60% stake in the recommended stock - PTC financials. Even at the present CMP of Rs 12 (which I believe is highly discounted), this stake translates into 420 crores. So at todays rate, the entire PTC after taking out the cash in hand and its stake in PFS (at real discounted values) is avalable at (650-420) = 230 cores. The quarterly earnings of this company is app 35 crores ( Annualised 140 crores). In short, you are getting the entire company for 230 crores and a return of 140 crores p.a . Even if there is no growth hereon, you will be making profits from the end of 2nd year of investment.
4. I am not even considering the other inflow like dividends from PFS and stake sale of India energy exchange. The company is in the field of energy and coal trading.. both having great future in a power deficient country as ours. Competition has started but the company is a behemoth as of now in this field.
5. The Govt has the biggest stake and has a regular dividend policy too. Most importantly, no debts and does not need money / raw material for a finished product.
You do things when the opportunities come along - Warren Buffet
2. As on date, PTC is avalable at Rs 46 i.e a market cap of 1350 crores. The company (as per balance sheet on 31 Mar 2011) has Cash (in bank and Fixed deposits) to a tune of 700 crores. It has zero debt.In simple words, the company is available at (1350-700)i.e 650 crores.
3. The company has a 60% stake in the recommended stock - PTC financials. Even at the present CMP of Rs 12 (which I believe is highly discounted), this stake translates into 420 crores. So at todays rate, the entire PTC after taking out the cash in hand and its stake in PFS (at real discounted values) is avalable at (650-420) = 230 cores. The quarterly earnings of this company is app 35 crores ( Annualised 140 crores). In short, you are getting the entire company for 230 crores and a return of 140 crores p.a . Even if there is no growth hereon, you will be making profits from the end of 2nd year of investment.
4. I am not even considering the other inflow like dividends from PFS and stake sale of India energy exchange. The company is in the field of energy and coal trading.. both having great future in a power deficient country as ours. Competition has started but the company is a behemoth as of now in this field.
5. The Govt has the biggest stake and has a regular dividend policy too. Most importantly, no debts and does not need money / raw material for a finished product.
You do things when the opportunities come along - Warren Buffet
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