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Tata Consultancy Services Limited

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TCS trade ideas

TCS Buy-back & how I got it rightTCS BUY BACK & HOW I GOT IT RIGHT BACKGROUND TCS declared its Q3 results last evening and it was expected to announce a share buy-back proposal. This news was available ahead of the results and therefore, I decided to work out what could be the likely buy-back price that it may offer. Based on my observations, TCS has a tendency to cross the buy-back price and then retrace either below or around the buy-back price just when the buy-back approaches. The logic is that the scrip is unlikely to trade above the buy-back price and is more likely to fall for some time. INTENT I have holdings in the scrip so I was eager to test my logic of arriving at the likely buy-back price. In the past. I have traded TCS pre and post-buy-back with the intention to make trading gains so I may enter a trade as & when I find a good risk-reward opportunity. So my intent was to know the likely range that it may offer should I decide to buy TCS. WORKING In my view, a company that opts for buy-back of shares is either trying to compensate the shareholders from the available surplus or it may be willing to consolidate its own position as it expects improved performance in the coming periods. It could also be for both the reasons. In reality, I am not affected by their reason as long as the price offered is at a better premium than the ruling price. This will motivate me to stay put with my holdings and or induce me to initiate a new trade. My work to arrive at the price was done a day ahead of the announcement and for those who may be quick to think that what is the point in writing the article post-facto, I have pasted a link to the video where I have stated the price range that may be used for arriving at the buy-back price. On 11-1-21, TCS closed above 3900 so I kept 3900 as the base and did the following: Case 1 The offer price could be at a premium of 10% to the ruling price. So, 3900*1.10 = 4290 so I rounded-off to 4300. Case 2 The offer price could be at a premium of 15% to the ruling price. So, 3900*1.15 = 4485 so I rounded-off to 4500. The reason for 10% is that it is a good enough incentive to the shareholders to tender the shares and is more than the returns that a debt instrument would give. The reason for 15% is that the company may want to top up the premium with a hidden component of dividend which is otherwise taxable. My conclusion was that TCS may offer the buy-back within this range with 4500 being the cap as I felt anything more would mean that the company may be doing social service than rewarding its shareholders. My reading was that the shares would in any case not cross 4000 immediately as TCS has the tendency to go sideways to negative post results and as the time elapses from the result release, it goes down if the sentiment is not positive. CONCLUSION Since I have some holdings in TCS, I am happy that a part of that would be tendered at the final price that the company may announce . I now have a range of 600 points from 3900 to 4500 which is available for me to decide about trading the scrip subject to the right set-up and more importantly funds availability. I am now encouraged to test the approach for such announcements that the other companies may make. Here is the link to the video: youtu.be I would be happy to read your feedback. Thank you, Umesh 13-1-22 Not SEBI Regd. Shared for the purposes of Educational & Informational purposes only.
NSE:TCS
by AVENUESOFINVESTMENT
Tata Consultancy Services Ltd ( EDUCATIONAL PURPOSE ONLY)There is no guarantee in stock market and Nothing over week Always Invest or trade according to your loss bearing capacity STOCK TO WATCH FOR EDUCATIONAL PURPOSE ONLY Tata Consultancy Services Ltd. with target of RS 4500 CMP IS RS 3879.85 STOP LOSS: ACCORDING TO YOUR RISK APPETITE OR @ RS 3750 Disclaimer: I am not Sebi Registered. All my ideas/opinions and analysis are for your information and educational purposes only and it does not constitute any recommendation to buy or sell any stock or index. Use your own wisdom. M B PANDEY Student of Share Market since 2015 B.Sc. (MATHS & PHYSICS) Disclaimer: I AM NOT SEBI REGISTERED
NSE:TCSLong
by vinayaka79
Morning Doji Star in TCS.After the result date TCS has fallen with a gap down, since a downtrending market is in place. With a long bearish candlestick, which is followed by a Doji Star shows an indecision and gives a sign of possible trend reversal. Just like the regular Morning Star, confirmation on the third day fully supports the reversal of trend. This type of Morning Star can represent a significant reversal. Therefore it can be considered as more significant than the regular Morning Star pattern. Aggressive traders take entry above the current bullish candle and many traders enter the trade above the bearish candle of this candlestick pattern with a stoploss below the doji candle formed. My suggestion of entry is to wait for the price to give a closing above 10 EMA and RSI value above 40.
NSE:TCSLong
by anuragsahu614