Posts Tagged ‘PSU

07
Dec
14

Booked profits in Bharat Electronics (BEL)

In my last post I had written about my recent buys (https://writingoptions.wordpress.com/2014/08/27/my-recent-buys/). I had mentioned about Bharat Electronics (BEL). It was clear beneficiary of composite FDI+FII limit being raised to 49 percent. Usually I don’t like PSU’s and don’t invest in them. I firmly believe they are inefficient allocator of capital. But BEL was a good trading buy at that point of time. Company had 5-6k crore cash on books, MCap was 16k crore and close to 1k crore of annual profits. Stripped of cash company was available at 10 PE.

Recently BEL has rallied sharply to hit high of 3140 on Friday(5th Dec) but closed lower at 2894. I think stock has moved too sharply and valuations are also not as attractive as earlier. I have booked profits in BEL for now and will look to re-enter at lower levels.

Disclaimer: These are my personal views and you should do your own due diligence before acting on anything written in this blog. Please take reasonable care while trading in options, especially while selling. I am not advising anyone to sell or buy options. My purpose of writing this blog is to highlight my trading strategies

13
Jan
12

Coal India : Surprisingly positive news

It looks like some better sense has prevailed at centre. To bridge the deficit and meet Rs 40000 crore disinvestment target, Coal India might announce a ┬ásignificantly large dividend (http://www.moneycontrol.com/news/cnbctv18-comments/finmin-may-declare-rs-1012-dividend-for-coal-india-source_649974.html). I had argued earlier that dividend is much better option than buying government stake in unrelated PSU’s. Dividend will be equally beneficial for minority shareholders.

The coal giant has also settled wage negotiations with workers under sixth pay commission. Effective hike would be 25%. This is a big positive for stock, since it removes uncertainty and fear of any kind of strike. Now stock performance would be a function of production ramp-up. I feel it has put kind of floor to Coal India stock price and should not go below 300 in short term.┬áDuring Coal India’s earlier fall to closer to 300-305 levels, I had sold OTM puts. I have started squaring those puts now.




June 2017
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