Monday, November 10, 2014

FUNDAMENTAL RATIOS


Fundamental Ratios play a very important part in finding an equity investment of your risk appetite. I collected the fundamental ratios data for all the listed companies on NSE ( and BSE )  and tried to listout few stocks that should be considered for further analysis

Criteria 1 : P/E Ratio < 10 , SALES > 800 crores
Query1
company
pe
eps
Sales ( in crores )
National Wind Power Corporation Ltd.
3.27
-0.01
975.34
Nagarjuna Fertilisers & Chemicals Ltd.(Old)
6.88
2.27
818.08
Trident Ltd.
5.14
6.33
913.26
National Steel and Agro Industries Ltd.
3.27
6.84
975.34
Monnet Ispat & Energy Ltd.
8.4
10.12
893.74
Sintex Industries Ltd.
8.92
10.77
998.14
Prakash Industries Ltd.
4.91
12.88
811.01
Uflex Ltd.
9.16
17.91
825.84
Diamond Power Infrastructure Ltd.
6.17
20.12
805.04
Escorts Ltd.
7.48
20.53
992.63
Kothari Products Ltd.
3.88
63.79
934.64
Mahanagar Telephone Nigam Ltd.
0.25
124.21
856.02

We see that MTNL has very strong fundamentals. IF we look at the stock price over the last 10 years
Click here for Image
This stock was unperturbed by even the 2008 Financial crisis. Such a stock is indeed very handy to have in your portfolio. Besides it also gave a 10% dividend
Another stock to look out for is Escorts Limited. This is a company based on agricultural machinery. With agriculture certain to get a big push from the government, it will be a good buy. One thing to note from its graph ( in fact all the graphs of its peers ) is that these stocks did not get affected much in the 2008 crisis. However, post 2008, people started putting in a lot of money on these stocks, leading  to a bubble. These stocks are a very good buy at times of a crisis
Click here for Escorts Chart
Click here for Jain Irrigation Chart 
Now if we go to the other side of the spectrum, we see companies with good P/E ratios but very low EPS too. These are extremely stable stocks with little volatility over a large period of time. A take a look at “National Steel and Agro Industries” reveals that the stock price graph over the last 10 years will reveal that it has stayed put at the 20 price mark. However the stable performance translates to huge dividends . National Steel and Agro gave a dividend of 150%


Criteria 2 : P/E Ratio > 700
Query1
company
P/E
EPS
SALES
Dividend %
Jain Irrigation Systems Ltd.
994.16
0.08
1
25
Futuristic Offshore Services & Chemical Ltd.
930.11
-0.13
2
30
Future Retail Ltd.
930.11
0.12
2
30
Visagar Polytex Ltd.
917.31
0.6
18.59
10
20 Microns Ltd.
793.61
0.04
81.32
10

A very high P/E will immediately tell you about a company that is new or expanding its business in another domain. This will often have lower dividends
  • Visagar went on NSE on Jun 2013
  • 20 Microns in 2009
(All the data has been taken from money.rediff.com and google finance )

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