this is purely a study material, because, I found huge volume movement in these stock,

interested to know what is happening here. this stock is fundamentally a weak one and not advising any trade here.

@mackanshunegi, In general you mean? or sjvn in particular? any way it is another vast subject like technical analysis.

By Evaluating all the fundamental values of a company for its merits and demerits effecting the growth of that company and its stock price in future,

eg: a poor quarter, a high debt equity ratio or a low ROE value etc, if find below average of the industry 1st ,and the market in general,then

we can say that, it is a fundamentally weak unit. People use many different metrics, based on there experience.

It is the same process we used say for a “fundamentally turn around story” about a stock when a management/operational or business change happened.

By Evaluating all the fundamental values of a company for its merits and demerits effecting the growth of that company and its stock price in future,

eg: a poor quarter, a high debt equity ratio or a low ROE value etc, if find below average of the industry 1st ,and the market in general,then

we can say that, it is a fundamentally weak unit. People use many different metrics, based on there experience.

It is the same process we used say for a “fundamentally turn around story” about a stock when a management/operational or business change happened.

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@padiyaraa, Thanks for the detailed answer, I actually wanted to ask for SJVN in particular, because as far as this company is concerned, it is really solid fundamentally.

Reply

@mackanshunegi, oh i see. never mind.

what are the positive things you see in sjvn fundamentals to say it is solid?

Have you ever thought that, ifid has a solid fundamental then, why stock price couldn't make even a 100% in a long 5 years.

I follow many thing like Earnings, DEBT, Managment etc, but mainly I like to see the ROE, which says that above 20 is a good read.

ROE= net proft / equity *100.. It is not just profit divided by equity, But actually it is

the product of NPM ATO & FL ( NPM x Asset turn over x Financial leverage).

NPM=NET PROFT/ NET SAELE X100

ASSET TURN OVER= NET SALES/ AVERAGE TOTAL ASSET

AND FL = AVERAGE RTOTAL ASSET/ EQUITY

If you notice the above formula, the denominator and the numerator cancels out with one another eventually leaving us with the original ROE formula which will be(ROE= net profit / equity *100). it cover many this including the managerial ability to run a prfitable business.

SJVN management is incapable of doing a business profitable. if you study carefully you will understand that.

what are the positive things you see in sjvn fundamentals to say it is solid?

Have you ever thought that, ifid has a solid fundamental then, why stock price couldn't make even a 100% in a long 5 years.

I follow many thing like Earnings, DEBT, Managment etc, but mainly I like to see the ROE, which says that above 20 is a good read.

ROE= net proft / equity *100.. It is not just profit divided by equity, But actually it is

the product of NPM ATO & FL ( NPM x Asset turn over x Financial leverage).

NPM=NET PROFT/ NET SAELE X100

ASSET TURN OVER= NET SALES/ AVERAGE TOTAL ASSET

AND FL = AVERAGE RTOTAL ASSET/ EQUITY

If you notice the above formula, the denominator and the numerator cancels out with one another eventually leaving us with the original ROE formula which will be(ROE= net profit / equity *100). it cover many this including the managerial ability to run a prfitable business.

SJVN management is incapable of doing a business profitable. if you study carefully you will understand that.

Reply

@padiyaraa, agreed on the management part, but if you look closely it doesn’t really have much of a debt, it’s cash rich company, the dividend yield is about 9 %. Roe is decent enough and so is return on assets. Compare with it’s peers probably you’ll catch the difference.

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@mackanshunegi, Ok I will see that :D. Initially I mentioned that is it is a vast subject, and I agree that I know very few things about it.

But that few things give me a perspective, most of the time very correctly.

You didn’t notice one question I raised. “why stock price couldn't make even a 100% in a long 5 years.”

In long term, the stock prices of a fundamentally strong company tend to appreciate, thereby creating wealth for its investors.

It is called the ABSOLUTE RETURN or annual yield. SJVN 2012 price was 18 and 2017 top was 36.here (36/18)-1 x100= 100% gain. Right?

Here in CAGR factors ,the time component which we had ignored, when we computed the absolute return it will be{ (36/18) ^(1/5year)-1= 14.86 % ie:a 5 year cagr is 15% only. Giving you an outlook, at a 20% CAGR the investor would double his money in roughly about 3.5 years aprox:

One can do a fundamental analysis by Understanding the basic financial data, knowing

the businesses with respect to the industry in which it operates and Basic arithmetic operations.

But that is not enough, to understand the degree of its strength and weakness.

An average ROE of Indian companies stand around 15%. I personally prefer to invest in companies that have an ROE greater than 20%.

So I said SJVN is fundamentally weak. Now how much you think that weakness is, the mater here.

My dear friend, if it was so easy maths, then I would not have to spend this much time to reveal the essence. Out of 100 such values and subdivision we talk about FEW things here. Dividend is another story. We will talk later.

But that few things give me a perspective, most of the time very correctly.

You didn’t notice one question I raised. “why stock price couldn't make even a 100% in a long 5 years.”

In long term, the stock prices of a fundamentally strong company tend to appreciate, thereby creating wealth for its investors.

It is called the ABSOLUTE RETURN or annual yield. SJVN 2012 price was 18 and 2017 top was 36.here (36/18)-1 x100= 100% gain. Right?

Here in CAGR factors ,the time component which we had ignored, when we computed the absolute return it will be{ (36/18) ^(1/5year)-1= 14.86 % ie:a 5 year cagr is 15% only. Giving you an outlook, at a 20% CAGR the investor would double his money in roughly about 3.5 years aprox:

One can do a fundamental analysis by Understanding the basic financial data, knowing

the businesses with respect to the industry in which it operates and Basic arithmetic operations.

But that is not enough, to understand the degree of its strength and weakness.

An average ROE of Indian companies stand around 15%. I personally prefer to invest in companies that have an ROE greater than 20%.

So I said SJVN is fundamentally weak. Now how much you think that weakness is, the mater here.

My dear friend, if it was so easy maths, then I would not have to spend this much time to reveal the essence. Out of 100 such values and subdivision we talk about FEW things here. Dividend is another story. We will talk later.

Reply

Ok I will see that. Initially I mentioned that is it is a vast subject, and I agree that I know very few things about it. But that few things give me a perspective, most of the time very correctly.

You didn’t notice one question I raised. “why stock price couldn't make even a 100% in a long 5 years.”

In long term, the stock prices of a fundamentally strong company tend to appreciate, thereby creating wealth for its investors. It is called the ABSOLUTE RETURN or annual yield. SJVN 2012 price was 18 and 2017 top was 36.here (36/18)-1 x100= 100% gain. Right? Here in CAGR factors ,the time component which we had ignored, when we computed the absolute return it will be{ (36/18) ^(1/5year)-1= 14.86 % ie:a 5 year cagr 15% only. Giving you an outlook, at a 20% CAGR the investor would double his money in roughly about 3.5 years aprox:

One can do a fundamental analysis by Understanding the basic financial data, knowing

the businesses with respect to the industry in which it operates and Basic arithmetic operations.

But that is not enough, to understand the degree of its strength and weakness.

An average ROE of Indian companies stand around 15%. I personally prefer to invest in companies that have an ROE greater than 20%. So I said SJVN is fundamentally weak. Now how much you think that weakness is, the mater here.

My dear friend, if it was so easy maths, then I would not have to spend this much time to reveal the essence. Out of 100 such values and subdivision we talk about FEW things here. Dividend is another story. We will talk later.