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Syncom Formulations | Why Do It’s Damping Down Investor Confidence

Company Name: Syncom Formulations (India) Limited.


Sector: Pharmaceutical

Current Market Price: 1.95

With market Capitalization of 155.35 Crores, this Mid Cap. Stock on BSE is a very attractive pharma pick due to its low price as well as the consistent year on year (YOY) profit growth rate. The recent ripples, it created in terms of trading volumes is really attention paying.

Falling price scenario really gives, a good opportunity to the bears to gain at the cost of bulls. Each and every time bulls try to take the price up to the next possible high level, bears try to pull it down to accumulate. They accumulate at the lowest possible price and sell at the highest. Hence Bearish Mode is best for Bears to gain at the loss of short-term bulls. Wooing bulls with targets is the strategy. Got it!

Syncom Formulations – An Overview

When I bought this scrip as a long-term holding at 2.15 levels in June last year, I thought it’s the last position that the price can move down. I never expected that it will come back again to my buy price. When it started to come back to 2.50 levels in September, the signal bearish signal was confirmed and I sold out all my holdings. That’s a different matter.Again on March 29th, I had little hope about its bullish startup. No need to say, what happened.

Technical Analysis

Technically, it has surpassed all the stages of its bullish trend. But, there are chances that, the Bulls may take it to up to certain level at their cost, but it may not sustain that position for a long while.

Here I would like to memorize the best saying of Dr. Alexander Elder, a professional trader based in New York city and the author of  ‘Come into My Trading Room’.

Each price represents a momentary consensus of value of all market participants – large commercial interests and small speculators, fundamental researchers, technicians, and gamblers- at the moment of transaction – Dr. Alexander Elder

The above saying of Alexander Elder, directly saying that the current market price of Syncom Formulations is the price decided by all the above said market participants. Whereas, fundamental Analysis only reveals the fundamentals of the company vis a vis its stock.

Fundamental Analysis

Company overall fundamentals are good, as described by many Credit rating Agencies. But, what is that financial factor, that’s driving the stock value to its previous lows is the factor to discover. Let’s start.

Promoter Stake: 41.22

We can say that it’s a good percentage and can’t count into that of low promoter stake category.

P/E: 13.43

Healthy. Good for short term traders to trade and gain.

Book Value: 1.39

Close to current Market Price. This is the price, the stock is running down to touch soon.

Dividend Yield: 1%

Good to say percentage. Nevertheless, the falling stock price may not hit back the long-term investors with the satisfaction, that a tremendous overall gain can give.

P/B: 1.44

At 1.2 levels, there is a chance to its push back. Whether it sustains or not depends on the company performance in the near future.

EPS: 0.14

Last but not the least, the EPS is the main factor in deciding upon the stock value. As long as the EPS is low, irrespective of profit growth rate the stock value falls to continue.

Earnings per share /EPS plays a vital role in stock analysis. EPS is considered as a main financial ratio and the symbol of the potential growth rate.

Strategy

Trade around, if you are able to track and follow the operator. Don’t invest further /SIP in as a long term investment. If possible sell half of the quantity and buy GTL Infra. Will trade around 100 by 2020.

All the above said analysis is based on the current Profit Growth Rate and Earnings Per Share calculations. If the company bags a huge order for any of its products /introduce a new valuable drug, my analysis may fail. I’m not responsible for your ‘ I Missed The Chance To Gain’ complaint.

Hope you people are better understood my perspective of analysis. Let me know your opinion. ‘Leave a Reply’ is waiting below for you to fill up. Jot down a few words.

Bye.

Happy Investing.

 

Value Stocks | Hidden Gems For Value Investing

Good Management and Coprporate Governance. Hopeful Sector. Upcoming Industry. Analysis Says – The Company Fundamentals are Strong. Excellent future prospects. Technicals are suggesting to buy. Yes. Definitely the stock falls in the ‘Value Stocks’ category.


The secret of many people to become millionaires! The success mantra of many Mutual Funds to out-perform! Value investing is nothing but chasing those hidden gems to own. Just invest and forget to hug your future fortune. That’s what ‘The Value Investing Is!

What Are ‘The Value Stocks’

All those stocks that tend to trade much below their intrinsic value can be considered as ‘Value Stocks‘. These stock’s current market price don’t match with either the fundamentals of the company or its earning levels. And, thus considered to be an undervalued stock by the ‘Value Investors’.

How To Spot A Value Stock

If the company is paying good dividend, earning levels are excellent and sales growth rate is OK, but the stock is available at low price. We can exactly say that the stock is a value stock.

Other characteristics would be, high dividend yield, low P/E (low price to earnings ratio) and low P/B (low price to book value)

Why To Invest In Value Stocks

As the value stocks /securities are trading at a lower price than how the company’s performance may otherwise indicate, there will be a breaking down point in the near or the far future of every value stock. Difficult to guess, but sure to be assessed. The target price will be at least its intrinsic value.

Investing in a value stock is an attempt to capitalize on market inefficiencies. By investing in a value stock, we can make sure that, we are going to encash the inefficiency of the market to recognize the stock’s underlaying value.

How To Invest In Value Stocks

Just spotting a stock with the required ratios is not enough to decide upon that the stock is undervalued and can invest without any further investigation. Of course, this would be the first step to develop a rough list of stocks – that may be our best choice of value picks. So, just the screen test and making a list of stocks that we expect to be undervalued is over.

Apart from this there are two more steps of analysis required to be done before investing. They are ‘Qualitative Analysis’ and ‘Quantitative Analysis’.

What Is Qualitative Analysis

The entire analysis of the company, side stepping the financial ratio analysis (quantitative analysis) is called the qualitative analysis. Here there are no financial ratios not their analysis. But, it involves analyzing the company in the vague light of distinctive practical matters, which directly or indirectly affect the company’s performance  and its stock value anyhow.

Factors like industry to which the company directly /indirectly related to, future scope of that industry, company management, corporate governance, company competitiveness with its competitors, government subsidies, quality of the goods produced, climatic conditions and finally the demand for its products /services etc, need to be analyzed in depth before deciding upon the stock to be a Value Stock. Unlike quantitative analysis, qualitative analysis needs more attention and is very time consuming.

Qualitative Analysis is best made by the investors, that is relevant to them. The companies they worked for, goods they sold once or well known with the products and their demand are best to be chosen for analysis.

It’s wise to buy companies, that you understand better

– Warren Buffet

What Is Quantitative Analysis

There is a myth among the common investors that ‘The Quantitative Analysis, is a little bit difficult ratio analysis performed by the expert analysts. But, the existed IT tools made it a crazy one minute analysis done by any common people. No financial expertise is required.

Once the ratio analysis is over, the next step is to analyze the impact of their values. All the investors with basic knowledge of how these financial ratios should be for the company’s out-performance in the near future, are said to be in good position in value stock picking.

Other Strategies To Invest In Value Stocks

Few value investors opt to invest in stocks of companies whose products or services have been in demand for a long time and are likely to be continued.

Innovation‘ – This sounds like a synonym of development. And of course the stepping stone of true development. But, this would be a great threat to certain companies and sometimes the whole industry too. History witnessed a few long-standing companies and industries victimized by new innovations. Their products /services became obsolete and the companies lost forever. Here, what we need is critical thinking skills. If there is a proof that, the company has been in the business for a longstanding period and has the ability to fast adapt the new changes and innovations, then we can be free to choose such businesses for further analysis. At this point it may be worthwhile to analyze management and the effectiveness of corporate governance to determine how the company reacts to new innovations and changing environments. Investment in such a business is considered to be always safe and  fruitful.

That’s all. Thank for reading this topic.

Don’t forget to leave a reply in the form below to share your valuable opinion with me and all.