Wednesday, December 30, 2009
Winning Strokes: Think different:
Look at the price of crude oil now, which is trading around $79 per barrel. The Crude Oil was recommended around $68-69, a couple of weeks back in FB. So can we expect some more fire works from Reliance Industries Ltd.
CUBEX TUBINGS LTD. (BSE Code: 526027) recommended at Rs.17.20, in the Sunday Report sent to the Paid Groups touched Rs.19.20 before cooling down a bit. A report on the company would soon be placed at www.sumanspeaksplus.blogspot.com.
My recommended Aishwarya Telecom Ltd at around Rs.32-34, touched Rs.40.40 yesterday. In the same way, Sunil High Tech Engineers Ltd Rs.214.90 yesterday. The stock was recommended around Rs.55--60 some months back, even though a high profile anlaysts from Bombay who is famous for a somewhat junk column called 50:50 asked all to avoid the same. Now that analyst must be banging his head against the wall for misguiding himself and his clients. Huh!!
The Quickie Call GMR FERRO ALLOYS & INDUSTRIES LTD (BSE Code: 532990) recommended at Rs.34, touched Rs.38 yesterday.
~:Excerpts from the Sunday Report:~
Those who are holding Northgate Technologies Ltd should note that, the company’s online advertising business has started to generate steam and this could somewhat be reflected in the Q2FY10 results. There is some delay in selling the social networking portal: www.bharatstudent.com, due to Christmas and ensuring New Year, as the buyers are all from overseas. According to market sources this has put a jolt in the upper movement of the share price-the more quickly it is able to sell its www.bharatstudent.com, the more fast the share price will move up. The company is expected to declare the Q2FY10, results in the 3rd week of January, 2010—by that time the selling of the web-portal, would be completed and the money would be used in other favorable ventures, which is good for the shareholders. Northgate Technologies Ltd is a leading Internet advertisement company with focus on Online Media Exchange business that helps online publishers monetize their web properties and online advertisers find the best targets for advertisement through a strong product “Axill”. The company is now leveraging its understanding of the online advertisement space by moving up the value chain through development of Online Media Properties to gain direct access to the online user base, which will drive profitability in future. It has strong focus on R&D. It is promoted by Venkat S. Meenavalli, Chairman and Managing Director who brings with him rich experience in Internet business including the roll out of Merrill Lynch’s www.mldirect.com.
Besides a Masters degree in Computer Science he holds three other industry certifications - Novell Certified Engineer (CNE), Microsoft Certified Systems Engineer (MCSE), Microsoft Certified Systems Engineer + Internet (MCSE+I). An expert in Internet security and firewalls, Venkat did his Masters in Computer Science. Besides, he holds a Diploma in Marine Engineering from the Ministry of Telecommunications, Government of India and an Advanced Diploma in Satellite Communications from Australia Long Distance Education. Investment in Northgate Technologies Ltd provides an opportunity to partner with a leading player in the high growth industry of Internet Advertising, which has grown at a CAGR of 37% from US$16bn in CY’04 to over US$41bn in CY’08 driven by increasing penetration of global Internet users from 17.8% in FY’07 to 21.1% in FY’08. According to PwC-FICCI analysis, online advertising is expected to maintain sustained growth momentum, growing by over 1.6xs to reach US$66bn in CY’10. Northgate is an established player in the Internet advertising business, thanks to the success of Axill, through which it is working for over 14,000 publishers, including some of the marquee names such as Wal-Mart, AOL, Target and BMG. I believe that Northgate’s business model is comparable to industry leaders like Google and Yahoo, with high growth potential. Further, Northgate is better placed compared to companies like Tencent, Baidu and Infoedge as it is focused on multiple high growth segments like telecom, online gaming and social networking unlike peers that have developed capabilities in few focused segments. Google and Yahoo are the key integrated players operating in various segments akin to Northgate. For its online media properties Northgate directly competes with Indian players such as Rediff and Info Edge and global players such as Tencent and Baidu. Hence we can have some idea; at what price www.bharatstudent.com would be sold. Having said that it is to be remembered that Northgate Tech operates in intensely competitive industries of internet advertising, real time internet communications and social networking. It competes both for advertisers and for high quality advertising space available through websites in online advertising segment; face intense competition from traditional telephone companies, wireless and cable companies and alternative voice communications providers in real time internet communications. But the company has established multiple revenue streams by setting up large web communities on its various services such as VoIP, internet gaming, social networking, TV advertisement, education consultancy, etc. Hence the investing in the scrip provides good opportunity for the shareholders to maximize their returns over a period. Moreover, around 80% of the revenues of the company still come from Online Media Exchange (OMX) platform powered by AXILL. Online Media Properties (OPM) contributes only around 20% of the total revenues and hence selling of www.bharatstudent.com would not have a significant amount of revenue strains in the balance sheet. Its OPM includes: www.ziddu.com, www.bharatstudent.com, etc. Only some patience is needed till the selling of www.bharatstudent.com, which would boost the balance sheet of the company. However, off-late the revenues of the company suffered after it closed down its server farms located in London and Hong Kong, which was Northgate Tech’s core strength— leading a crash in the stock price from Rs.1500 to around Rs.27—28, as of now.
~:Excerpts from the Sunday Report to the Paid Clients:~
Nifty witnessed a spectacular rally last week and succeeded in breaching the psychological barrier of 5180--5185 on Nifty on the back of Finance minister’s comments on expectations of strong GDP growth for FY10 and on the back of positive global cues. On the positive side, Market was well supported by buying activities of Foreign Institutional Investors. The spectacular rally was supported by assurance of Finance Minister that sustaining higher growth would remain a priority for the government. Moreover consistent domestic buyers enabled the market to remain in positive zone. A firmer Global market also supported the Equity market.
Nifty witnessed around 200 points rally in the last two trading sessions due to short covering and created a new 2009 high after consolidating within a range of 4,945-4,995 for the initial two trading sessions. Nifty is expected to be range bound in the coming week, but broader market is expected to witness a strong rally. The F&O data is also supporting this statement as maximum OI has been added in the calls ranging from 5,200-5,300 and on the flip side we can see a high OI build up in 5,100-5,000 puts. Moreover, a high volatility is also expected ahead of the F&O expiry which is due on 31st December. Upside, it has a strong resistance at 5,180-5,200 which can restrict it from rising further. Break and sustaining above 5200 levels would increase the possibility of Nifty going up further 5310 levels in near term. Downside,5,100 is the immediate support and it could further be dragged to 5,060 which is its next strong support if it breaches the 5,100 level. Buying could be seen in Healthcare and FMCG stocks while selling might be witnessed in XXXXXXX stocks.
Immediate support is seen at 5100 and break of same could test 5030 levels. Resistance is seen at 5300 levels for the week. Relative strength remains positive for the market yet caution is given by MACD which remains sideline for short term.
Investors/Traders are suggested to focus buying on small and mid cap counters.