72%-150% Return Potential in mid term - SPIC
Disclaimer: This stock is not for weak hearted buyers. The volatility is high on a daily basis, however, the price range is small. In other words, the fluctuation is not for investors who are driven by emotions. Before I start, I would like to tell you that I am also personally holding shares of SPIC and would like to share my strategy with you.
Fundamental Background:
Manali Petrochemicals and SPIC belong to the same group. Manali Petrochemical Ltd. is a petrochemical company based in India. It markets propylene glycol and polyols It is based in Chennai. Manali Petrochemical annually produces 27000 metric tonnes of propylene oxide, 14,000 metric tonnes of propylene glycol and 15,000 metric tonnes of polyether polyol and system polyol. While on the other hand, Southern Petrochemical Industries Corporation Ltd, or SPIC, is an Indian company that makes petrochemicals. Its core competency is in fertiliser products. It has operations in power, oil and natural gas, pharmaceuticals, and biotechnology applications in agriculture.
Recently Manali petro posted the best quarter in its history with an EPS growth of over nearly 300%, and Operating Profit and Net Profit around 3x. With high Operating Profit margins with just a 2x increase in sales, we can interpret that the management is very efficient in managing production and assets in a very efficient manner.
SPIC, on the other hand is yet to post good results and have a big sum invested in asset acquisition and investments in fixed assets. The LTP of SPIC is around 24.85 and I expect SPIC to show spectacular results and high margins % once the cloud is cleared. SPIC caught my attention with high volumes and stock movement in Jan 2021.
Investment Strategy
Let us say you wish to invest 44,000:
Invest 10,000 at the current market price. You will have 400 shares approximately.
Add 15,000 worth of shares at 23 where we have strong support. We add another 650 shares.
In case of a further breakdown, we put another 20,000 to add shares on the trendline that started in March 2020. We add another 943 shares (assuming price to be around 21.4)
Total Shares: 1950 shares approximately.
Buying Average: 22.61
Stop loss: 17
Targets: 39, 44.5, 55
Max Loss: 5.6*1950 = 10,900
Profit at T1: 31,900 (72.5%), Profits at T2: 44,600 (101%), Profits at T3: 63,000 (150%)
Risk Reward: 1:3
Time frame: 5-8 months
Please read this
Before you invest in this trade, please read the Disclaimer above. I am not a registered advisor and I recommend doing your own studies before investing. If this works for you, then I am happy for you.
Fundamental Background:
Manali Petrochemicals and SPIC belong to the same group. Manali Petrochemical Ltd. is a petrochemical company based in India. It markets propylene glycol and polyols It is based in Chennai. Manali Petrochemical annually produces 27000 metric tonnes of propylene oxide, 14,000 metric tonnes of propylene glycol and 15,000 metric tonnes of polyether polyol and system polyol. While on the other hand, Southern Petrochemical Industries Corporation Ltd, or SPIC, is an Indian company that makes petrochemicals. Its core competency is in fertiliser products. It has operations in power, oil and natural gas, pharmaceuticals, and biotechnology applications in agriculture.
Recently Manali petro posted the best quarter in its history with an EPS growth of over nearly 300%, and Operating Profit and Net Profit around 3x. With high Operating Profit margins with just a 2x increase in sales, we can interpret that the management is very efficient in managing production and assets in a very efficient manner.
SPIC, on the other hand is yet to post good results and have a big sum invested in asset acquisition and investments in fixed assets. The LTP of SPIC is around 24.85 and I expect SPIC to show spectacular results and high margins % once the cloud is cleared. SPIC caught my attention with high volumes and stock movement in Jan 2021.
Investment Strategy
Let us say you wish to invest 44,000:
Invest 10,000 at the current market price. You will have 400 shares approximately.
Add 15,000 worth of shares at 23 where we have strong support. We add another 650 shares.
In case of a further breakdown, we put another 20,000 to add shares on the trendline that started in March 2020. We add another 943 shares (assuming price to be around 21.4)
Total Shares: 1950 shares approximately.
Buying Average: 22.61
Stop loss: 17
Targets: 39, 44.5, 55
Max Loss: 5.6*1950 = 10,900
Profit at T1: 31,900 (72.5%), Profits at T2: 44,600 (101%), Profits at T3: 63,000 (150%)
Risk Reward: 1:3
Time frame: 5-8 months
Please read this
Before you invest in this trade, please read the Disclaimer above. I am not a registered advisor and I recommend doing your own studies before investing. If this works for you, then I am happy for you.
Trade active:
First and Second Target complete within 4 months. Heading for third target
