akashbothra

Coal India Breakout

Long
NSE:COALINDIA   COAL INDIA LTD
NSE:COALINDIA

Fundamentals:-
Average ROE for last 3,5,10 years > 25% (should be greater than 15)

Debt to equity at 0.13 (should be less than 1), Interest coverage at 30.3 (should be greater than 3), Current ratio at 1.77 (should be greater than 1.5)

Dividend yield of 7.95% and pays dividend regularly, means it's an investor friendly company.

Generated free cash flow of more than 60% after capital expenditure from operating cash flow in last 10 years, means it has enough cash for further expansion and wouldn't need to raise debt.

All in all, a fundamentally strong company.

Broken out of a strong resistance with high volumes and now it's retesting the breakout levels again. 50 day EMA just crossed 200 day EMA . Took 182 days to come down from a high of Rs .152 to Rs .109 but took only 133 days to recoup the losses, so it was a fast recovery which makes it a high probability buy. Buy if it crosses 156-157 again with a stop loss below 149.

Comments

Considering dividend of 5-6 rs also in coming days, signals BUY.
+1 Reply
This stock is good to buy at any level -dividend rates are better than FD
Reply
akashbothra N50-ANALYST
@N50-ANALYST, yes you are right about the dividend yield. But in case of long term investment one should also look at earnings yield, which is the opposite of PE. Coal India's latest price is 151 and TTM (Trailing twelve months) eps is Rs. 20, so the earnings yield comes at 13.71 ((eps÷price) *100). Every Rs. 100 invested in this counter can give earnings of Rs. 13.71 which is much above current fixed deposit rate. This is another reason for it to be a good bet. The only reason why it wasn't a buy yet was because it was not giving a breakout.
Reply
N50-ANALYST akashbothra
@akashbothra, well said
Reply
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