Okay, Agro Dutch is not a great company. One does not equate Agro Dutch with the likes of Reliance Industries. But is it a bad investment to buy shares of Agro Dutch?
Lets see some details:
http://www.moneycontrol.com/india/stockpricequote/foodprocessing/agrodutchindustries/12/05/balancesheet/marketprice/ADI02
Agro Dutch's market capitalization is about Rs. 40 Crores.
According to its balance sheet, it had a cash of Rs.27.odd Crores as on Mar. 31.
It's Current Assets Net is about 113 Crores. Even if we assume that all the contingent liabilities of Rs. 33 Crores become real, we still are with a situation where the company is sitting with Rs. 80 Crores Net Current Assets while its market cap is hardly half of that!
So lets not even talk about profits, current earnings per share etc. of which there is some amount though not great. But its still a bargain to buy a book store for Rs. 40 crore when it has books and cash for Rs.80 crore devoid of debt. What do you think?
Here, we are not paying any damn for future growth. Rather we are getting a 50% discount to its present value. Profits and growth which do exist comes as a bonus.
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