Jitendra Kumar Gupta's blog

Introducing new page under: One up on wall street Here is collection of investment thoughts from Chetan Parikh His website is worth visiting Must read book: Indias Money Monarchs: Converstions With Leading Investors "Most of my multi baggers have come through waiting patiently, understanding corporate strategy and the resultant cash flows from a three to five year period. But if i had to hold a non-steady cash flow company for any length of time, management is a very important factor. In many cases it is the jockey, not the horse that one should bet on"

It is difficult to find a single construction or engineering company, which has negative working capital, zero debt, return on equity in double-digits, huge cash in its books and consistent dividend paying history, all under one roof. The company in question is National Buildings Construction Corporation (NBCC), which has launched an offer for sale (by the government) to raise Rs 108-127 crore. In the last four years, NBCC’s profit has doubled and shareholders’ funds have gone up four-fold, and without raising any funds, including debt, thanks to its business model. The company gets its dues (money) from clients in about 100 days, whereas it pays to its creditors in about 300 days. These positives have helped NBCC attract an initial public offer (IPO) grade of four on a scale of five by ratings agency CARE, which indicates above-average fundamentals. As regards the IPO, at the upper price band of Rs 90-106 it is priced at 8.5 times annualised earnings and 1.6 times book valu...

http://blogs.business-standard.com/jitendra/2012/03/01/buffettspeak-in-productive-assets-i-trust/