Value Investing Lessons Relevant At All Times | Equitymaster

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Value Investing Lessons Relevant At All Times

  • Identifying a shipping stock: Do's and don'ts
    (Jan 8, 2007)Shipping industry is a primary means of international transportation of any essential commodity. Around 80% of the cargo moved today is seaborne and almost 100% of hydrocarbon is transported through ocean. The global shipping industry can be broadly classified into wet bulk (like crude and petroleum products), dry bulk (like iron ore and coal) and liners (like containers and others). There are various benchmarks that determine freight rates for these segments. The prominent amongst them are Baltic Freight Index, Baltic Handymax Index (for dry bulk segment) and World Scale (for tankers).
  • Refining: Understanding GRMs...
    (Sep 7, 2006)After touching historic lows in the late 1990s, the oil-refining sector has seen a significant increase in gross refining margins (GRMs) owing to two factors. One, hardening of crude prices and secondly, a favorable demand- supply equation in the global markets. As compared to GRMs in the range of US$ 1.0 to US$ 1.5 per barrel in late 1990s, GRMs crossed US$ 10 per barrel at one stage. Though margins have softened in the recent past, it is still substantially higher than the average of the last three years.
  • P/E ratio: Look beyond it!
    (Aug 21, 2006)The P/E ratio is easily one of the most widely used valuation metric employed by the investors worldwide to arrive at an attractiveness of a stock. However, what the ratio numerically denotes is not necessarily the truth always and application of other valuation matrices could prove to be more useful. Let us see where this ratio fails and how other ratios takes its place.
  • PEG ratio: A perspective...
    (Mar 2, 2006)How to go about investing in stock markets is a never-ending quest. And since there are no right or wrong ways to go about things, it becomes even more perplexing. Here is one of the valuation parameters, which an investor could make use of while making investment decisions in equities.
  • P/BV: Understanding the concept
    (Sep 13, 2004)Apart from the price-to-earnings (P/E) ratio, another parameter that is commonly used to value stocks is price-to-book value (P/BV). But what does P/BV means and how can investors use this parameter to value their investments? In this article, we will try and simplify this concept.
  • Understanding Options
    (Jul 17, 2004)Derivatives markets are important constituents of the capital markets anywhere in the world. Thus, in the Indian markets too, derivatives have become an important part, which is evident from the volumes in the derivative segment. The volumes in the derivatives market has gone up steadily in the last three years (since its commencement in India) and during the last one year, they have been consistently higher than the cash market.
  • Identifying an auto anc. stock: Do's and don'ts
    (May 31, 2004)In the outsourcing space, the prospects for auto ancillary manufacturers are bright from the long-term perspective. But identifying the right stock from this sector becomes difficult on account of technical complexities involved and higher nature of fragmentation of the industry. In this article, we have made an attempt to simplify this process and help investors identify a good auto ancillary stock.
  • Identifying a paint stock: Do's and Don'ts
    (Apr 17, 2004)In the consumer's hierarchy of needs, the importance of housing cannot be understated. Given the fact that the housing sector has been growing at an impressive rate in the last five years on the back of various factors like tax incentives and the decline in interest rate, it is pertinent to look at sectors that benefit from this scenario. Apart from banks, cement, steel, the paint sector also benefits in a large way. In this article, we look at factors that have to be borne in mind while identifying a paint stock.
  • When to Buy? When to Sell?
    (Mar 16, 2004)"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.' This was how Benjamin Graham defined 'investment'. There are three important aspects here,
  • Identifying a cement stock: Do's and don'ts
    (Nov 29, 2003)One of the key factors that seem to have a major say on stock price movements of cement companies are cement prices! Given the volatility and seasonality involved in the same, should one place such high weightage on cement prices to ascertain investment decision in cement stocks? Here is an attempt to simplify the analysis of a cement company.
  • Identifying an MNC pharma stock: Do's and don'ts
    (Oct 11, 2003)The case for an MNC pharma company for retail investors as far as equities are concerned stems from the fact that earnings visibility is relatively stronger compared to domestic pharma companies. Unlike Indian peers, risks regarding R&D is also absent. However, while MNCs, in general, bring in a culture of professionalism, there have also been instances of Indian shareholders getting an unfair deal when these very MNCs delist from the domestic stock exchange or when they are taken over by another company (like Digital-HP and Kodak to name a few). In this article, we shall understand the various factors that should be borne in mind while investing in an MNC pharma stock.
  • Understanding the refining business
    (Sep 27, 2003)The black crude is fed to the refineries and we get various clean fuels like petrol, diesel, etc. For a layman, it is hard to believe all this but science has gone to such an extent that we can separate the crude oil into various useful products. This is just one thing. The science does not stop here. It can further alter this product mix by other processes to get even more value added products. By this time, you must be wondering what’s an article with scientific connotations doing on a financial website.
  • Identifying an aluminium stock: Do's and don'ts
    (Sep 23, 2003)Investing in commodity stocks is always a risky proposition because the cyclicality of the sector is one of the most important criteria, which decides the fate of your investments. Keeping this in mind, we have tried to highlight here some factors one should keep in mind before investing in an aluminium company.
  • Identifying a power stock: Do's and Don'ts
    (Sep 6, 2003)"When you think of digitizing India there will be a massive amount of power required and I pray to this government that you have to push and push and push to invest in infrastructure - Mr. Jack Welch"
  • Identifying a steel stock: Do's and don'ts
    (Aug 25, 2003)Steel stocks have been the object of heavy reviews off late in discussions about the Indian equity markets. And this is not without reason. In recent times, steel stocks have gained tremendously on the bourses. Whether this is a factor of rising speculation or fundamentals of steel stocks, is a different story altogether. However, in this article, we try to elucidate factors one should keep in mind before investing in a steel sector company.
  • Identifying an engineering stock- Do's and don'ts
    (Aug 16, 2003)If one were to consider one of the biggest beneficiaries from any country's infrastructure sector development, engineering companies have a vital role to play. As in any other sector, choices for a retail investor are high for an equity investment. However, it does that mean each stock in the sector is a BUY? In this article, we have tried to discuss the dynamics of this sector and the key aspects that one should look in, before selecting an engineering stock.
  • Identifying a refinery stock: Do's and Don'ts
    (Aug 11, 2003)It is often said that the dynamics of the world economy are often altered due to the crude oil price movement. As a result, the dynamics of companies operating in this sector are very different. Here in this article, we deal with key factors that impact the performance of petroleum products companies.
  • Identifying a banking stock: Do's and Don'ts
    (Aug 2, 2003)In continuation to enlighten investor's on how to analyse a sector and identify stocks, here is our analysis on the banking sector this time.
  • Identifying a domestic pharma stock: Do's and don'ts
    (Jul 26, 2003)There is a famous saying that 'while investing in equities, investors are actually buying the business of the company and not the scrip per se'. If this is the case, there are lots of complexities involved when it comes to picking a pharma company for investment. Here is an attempt by us to enable a retail investor to identify a domestic pharma company for investment.
  • Identifying a software stock: Do's and don'ts
    (Jul 19, 2003)As global economies are getting more integrated, technology companies are finding it an onerous task to align to the changing realities. In such a scenario, analyzing stocks from the technology sector require utmost caution and understanding. We will, in this article, try to elucidate the factors one should keep in mind before investing in a software sector company.