July 28, 2011 6:07 pm
Please suggest me on ISPAT Industries I have 225 Ispat at an average price of 36Rs. @ 50% Loss.
Is it good to average the stock buying 275 Ispat @ 18Rs.
@ Punit & Paritosh,
This is not the way to invest directly in equities. If you want to invest directly in equities, you need to spend time & eoffrts to read & study a lot. If you can not do that, please take mutual fund route.
What prompted you to buy this stock? as far as i can see, the company have not made any profits at all in the last 5 years except in 2008!!!
It has huge debt on its balance sheet. It was taken over by Jindal of JSW steel. so basically you should find answer for following
1. whether JSW could turnaround the sick unit? (May be)
2. can they scout cheap raw materials? (yes, JSW has capitive sources)
3. Will global steel prices will remain firm? (May be not, because china is major decider of global steel prices and its demand will cool off going forward)
4. Turnaround will take 3 years. Do you have patience to hold the stock for 3 more years? (tat is for you to answer)
If i were in your place, i would simply book my loss in the stock, learn the lesson and run away rather than adding more to it…..
is the story same for GVK POWER?
My Dad had 650 GVK POWER’S Share @ 23.
Hold on Or sell?
First tell me what is your take and rationale behind investing in the GVK power.
HI JAGDEES/Ankur Lakhia/Manish
Thanx for the reply.
I am had just started investing in MF since 1 year & As already stated my Dad had bought GVK POWERS.
As my Dad had now stop trading and i have those 650 GVK POWERS SHARE @ 23.
I just want to know your opinion aboult holding it for long or should i sell it.
If there is hope for profit i can hold it for 2-3 years otherwise i am happy to book loss.
Financials of the company does not inspire much – Earnings per share for the last yr is 0.43 rupees (even 5 yr avg is 0.50 rupees) and very low return of capital employed (5%), trading at lofty valuation of 40!!!! Even the industry leader L&T is trading at PE of 26 with decent 20% return of capital employed…
Personally am not tracking the company, so i have very limited knowledge about the quantitative aspect of the company like future projects and about management.
My suggestion – If you dont have expertise to track the stock – just cut down your loss and invest in a diversified mutual fund.
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