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Saturday, August 21, 2010

Country "PEG" Ratio

The PEG ratio (Price to Earnings divided by Growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus using just the P/E ratio would make high-growth companies overvalued relative to others. It is assumed that by dividing the P/E ratio by the earnings growth rate, the resulting ratio is better for comparing companies with different growth rates.

The PEG ratio is used for individual stocks as a valuation measure that factors in growth rates. It is calculated by dividing the company's P/E ratio by its growth rate. Many investors would rather own a company with a high P/E ratio and an even higher growth rate than a company with a low P/E ratio and an even lower growth rate. A PEG ratio of one or less is typically viewed positively.

The PEG ratio is considered to be a convenient approximation. It was popularized by Peter Lynch, who wrote in "One Up on Wall Street" that "The P/E ratio of any company that's fairly priced will equal its growth rate", i.e. a fairly valued company will have its PEG equal to 1.

If we decide to apply the PEG ratio to various countries by dividing estimated GDP growth into the P/E ratio of the country's main stock market index. Many developed countries have low P/E ratios, but they also have low GDP growth, while developing countries may have higher market valuations as well as stronger GDP growth. Investors may find PEG ratios more useful than simple P/E ratios when determining asset allocations for various countries.

Below are the PEG ratios for 22 countries around the world. For each country, we will use the trailing 12-month P/E ratio for the index shown as well as estimated 2010 GDP growth. As shown, Russia and China have the lowest country PEG ratios at 1.86 and 1.90, respectively. Russia has a very low P/E at 8 and decent estimated GDP growth at 4.3%. China, on the other hand, has a rather high P/E ratio at 19.24, but its GDP growth is also very high at 10.10%. The US is right in the middle of the pack with a PEG of 5.07. Mexico rank just above the US with a PEG of 3.85, while Canada ranks just below the US at 5.67.


The US does have the best PEG ratio in the G-7, so US investors looking for developed country exposure might be better offer staying right at home. European countries have exceptionally high PEG ratios because of their mediocre valuations and low growth rates. Australia and Spain both have negative PEGs -- Australia because it has a negative P/E and Spain because it has negative GDP growth.

Friday, August 13, 2010

RELIANCE TREASURY STOCK SALES : BUZZZ....

Scrip Name: RELIANCE INDUSTRIES
CMP: Rs.990;
Buy at Rs.950-1000 levels
Traget : Rs. 1130
Market Cap : Rs.318046 cr
52 Week High/Low : Rs.1129/Rs.910.30
Total Shares : 3270714336 shares; Promoters - 1463923343 shares - 44.74%
Book Value : Rs.392.41 ; Face Value - Rs.10; EPS - Rs.53.26;
P/E – 18.56; DIV (%)- 70%
Enterprise Value : Rs.1163.60 per share ; EV/EBITDA – 11.52;
There are the talks of Reliance selling its treasury shares worth Rs.3400 crs. About 4crs of treasury shares.Here are some of its past deals and the at present position of its treasury stocks..

DETAILS OF TRANSACTION
SEP 17 2009 – 1.50 cr shares @Rs.2125 = Rs.3188 cr in value a 0.91% of Stake.
(RIL bought at Rs.158 in year 2002)
JAN 04 2010 – 2.58 cr shares @Rs.1035 = Rs.2675 cr in value a 0.79% of Stake.
JAN 11 2010 – 3.30 cr shares @Rs.1050 = Rs.3465 cr in value a 1.00% of Stake.
A total of 7.38 cr shares @ Rs.9328 cr on an average of Rs.1263.95/share.

NAME OF SHAREHOLDER/SUBSIDIARY HOLDING RIL SHARES.
Reliance Universal Enterprise holding 5.69 cr shares (1.73%).
Reliance Polyelefins holding 6.12 cr shares (1.86%).
Reliance Chemicals holding 6.22 cr shares (1.89%).
Others holding 80 lakhs shares (.25%).
A total of 18.84 cr shares (5.73%). This also includes 12.05 cr shares or 3.67% held by Petroleum Trust.

At present RELIANCE has 30.89 cr shares (9.4%) of treasury stock including RIL shares held by its Subsidiary firms named above.NOW, at Current Market Price of Rs.1000 RIL’s Treasury stock are worth Rs.30,089 cr.

Wednesday, August 4, 2010

ULTRATECH CEMENT LTD ; BUY

Scrip Code : 532538 / ULTRACEMCO
CMP :  Rs.857.95 ; Buy at Rs.840-850 levels
Traget : Rs. 1087
Market Cap : Rs.10,711.1 cr.
52 Week High/Low : Rs.1163.1/Rs.702.8
Total Shares : 124487079 shares; Promoters - 68193101 shares - 54.78%
Book Value : Rs.370.05 ; Face Value - Rs.10; EPS - Rs.73.76;
Enterprise Value : Rs.989.31 per share ;

UltraTech ‘s results for Q1FY11 net realisation declined 4.9% due to its substantial exposure 33% to southern region which was affected by lower off take and shortage of wagons.
The increase in operating expenditure resulted in 1371 basis points YOY decline in operating margins to 23.5% (37.2%) , Going ahead, UltraTech will benefit from its Samruddhi merger % will not face comparatively lower pricing pressure. Post merger UltraTech will have aggregate capacity of 49 million tonne of cement production.. Ultra Tech’s net sales declined 8.1% YOY because of 3.6% decline in dispatches to 5.12 million tonnes. Power cost increased due to higher open market power purchase & reduced coal supply through linkages.
The incorporated post merger number of UltraTech will be 45.3% CAGR in top line over FY10-12 by higher volumes. At current level the stock is trading at an EV/EBITDA of 6.7 times & EV per tonne of $94 on FY 12 estimates.

At an average target of EV/EBITDA of 7 times Ultra Tech’s fair value comes at Rs.1087.

Samruddhi Cements
Share capital (Eq + Prf) – Rs.85 cr
Share Capital Suspense – Rs.45.84 cr.
Reserves & Surplus – Rs.4452.56 cr.
Total Assets – Rs.8562.49 cr.
Total Liabilities – Rs.5217.73 cr.
Investments (Eq) – Rs.4.43 cr.
Investments (Bonds/Mutual Fund) – Rs. 1234.11 cr.
Turnover – Rs.4290.63 cr.
PBT – Rs.941.99 cr.
PAT – Rs.617.96 cr.

UltraTech Cement
Share capital (Eq + Prf) – Rs.124.49 cr
Reserves & Surplus – Rs.4482.17 cr.
Total Assets – Rs.6673.44 cr.
Total Liabilities – Rs.3736.33 cr.
Investments (Eq) – Rs.21.07 cr.
Investments (Bonds/Mutual Fund) – Rs. 1616.68 cr.
Turnover – Rs.7049.68 cr.
PBT – Rs.1588.16 cr.
PAT – Rs.1093.24 cr.

Monday, July 19, 2010

NIFTY TRADES IN US FROM TODAY : S&P DOW JONES WILL JOIN INDIAN MARKETS SOON

Scheduled to Launch Monday, July 19, 2010

CME Group has partnered with The National Stock Exchange of India (NSE) and Standard & Poor’s to offer trading institutions two smart new ways to take part in the dynamic opportunities of the Indian stock market. E-mini and E-micro S&P CNX Nifty futures (Nifty 50 futures) are scheduled to begin trading on Monday, July 19, 2010.

The contracts will be listed and traded on the CME Globex platform, providing nearly round-the-clock trading access. Trading hours will be Monday-Friday, 3:30 p.m. – 3:15 p.m. the next day (except Friday, which closes at 3:15 p.m.) with a trading halt Sundays-Thursdays from 9:30-10:30 p.m. CDT (8:30 p.m.-9:30 p.m. CST) coinciding with the hour prior to the NSE open.

Cross-Listing Arrangement on March 10, 2010, CME Group and NSE announced cross-listing arrangements that Include license agreements covering benchmark indexes for U.S. and Indian equities. The agreement provides CME Group with rights to create and list U.S. dollar-denominated futures contracts for trading on CME, while providing NSE with rights to create and (subject to the regulatory approval) list Rupee-denominated futures contracts on the S&P 500 and Dow Jones Industrial Average (DJIA) for trading on NSE. Combine with other benchmark index contracts to express views on the direction of India’s market vs. the U.S. stock market (E-mini S&P 500 futures), vs. a broader view of world’s emerging markets (E-mini MSCI Emerging Markets futures) or to capitalize on arbitrage opportunities from short-term price differences vs. the SGX futures contract on the S&P CNX Nifty Index. You also can trade the contracts outright to hedge your risk from existing exposure to the Indian stock market.

Sunday, July 4, 2010

ANIL PLAYS THE GAME AGAIN...!!!!!!

Anil Ambani decided to merge RNRL with Reliance Power today....The ratio as I thought was 1 Reliance power for every 4 RNRL. The merger deal is valued at $11 billion. This merger values RNRL at Rs.7157 cr.
Reliance Power will dilute around 40.8 crore Sharea a 17.00 %. This merger will be negative for Reliance Power shareholders, while very good for RNRL, Rpower pays for a shell co with no real asset to invest into....whereas RNRL shareholders will now have a real assets to invest. Anil Ambani holds 42.39 % in Rel.Power & Rel Infra Holdes - 42.39 %. The combine market cap will be Rs.50,000 crs. 
RNRL shareholders including the promoters will get shares of RELIANCE POWER worth Rs.7157 cr, out of these,promoter would get shares worth over Rs.3600 cr. Here are some details of this both company -

RELIANCE POWER

Equity Sh (nos. in Cr) - 239.68 ;  Equity Cap (Rs. In Cr) -2396.80 ; Market Cap (Rs. In Cr) -41979.95 ; Net Sales - FY10  - 0.00 ; Net Profit - FY10  -683.89 ; Other Income - FY10  -843.38 ; Earning Per Share - 2.85 ; P/E Ratio  - 61.46 ; Face Value -10.00 ; TOTAL ASSET -  FY09  - 15111.64 ; Market Price -175.15 ;26- week H/L avg price - 152.58 ; 2 - week H/L avg price - 170.46 ; Promoter Share holding % - 84.78 ; Public Share holding % -15.22 ; No. share holders - 3595703 ; EV - 175.15/sh ; Book Value - 57.55/sh ; EV/EBITDA - 162.44 ; Long term Debt - 0.00

RNRL

Equity Sh (nos. in Cr) -163.31; Equity Cap (Rs. In Cr) - 816.56 ;Market Cap (Rs. In Cr) -10394.94 ; Net Sales - FY10 (Rs.In Cr) -298.39 ; Net Profit - FY10 (Rs.In.Cr) -90.75 ; Other Income - FY10 (Rs.In.Cr) -167.63 ; Earning Per Share (In Rs) -0.56 ; P/E Ratio (In Times) -113.66 ; Face Value - 5.00 ; TOTAL ASSET - FY09 (Rs.In Cr) -3323.44 ; Market Price -63.65; 26- week H/L avg price - 62.60 ; 2 - week H/L avg price - 64.61 ; Promoter Share holding % - 54.84 ; Public Share holding % - 45.16 ; No. share holders - 2534917 ; EV - 72.97/sh ; Book Value - 11.02/sh ; EV/EBITDA - 71.45 ; Long term Debt- Rs.1522.05 cr - Rs.9.32/sh



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