Thursday 6 November 2014

Trade4target : Today Stock Tips


Trade4target : Today Stock Tips 
Scripscan:Galaxy Entertainment Corporation Ltd
Bse Code:506186
Cmp:31 rs
Target:No targets as returns can be huge.
Portfolio Allocation:2-3%

History : The company much earlier was controlled by the Chatterjee group of Haldia petro fame and run by one Satish Chunder, a former banker from Citibank.Unfortunately,Chunder died suddenly and the company became rudderless.The company changed hands in early 2006; one of the largest and most experienced organised retailing chains, Pantaloon, bought 15.73% stake in it. It also amalgamated Pan India Restaurants with itself which had food courts.Mumbai-based real-estate firm Phoenix Mills holds a 27 percent stake in Galaxy.Few papers reported the phoenix stake to be higher at 34%.No clue about it though as my figures are based on the SHP of the company. Trade4target is advisory company of stock market.

Scene of 2014

Company : Galaxy Entertainment Corporation Limited was incorporated on August 13,1981.It operates leisure and entertainment centers across the country and as at the balance sheet date it has 28 centers offering a variety of facilities such as bowling,pool and video games,restaurant service etc.Note the below mentioned aspects.trade4target is pure research and advisory company in stock market.

Rent paid:4crs
PBT:30 lakhs
Cash Flows:14.5crs
Working capital:(13crs)

Note : So the Biyanis seems to have learnt their lesson.Finally they have embraced the power of low debt and high cash flows.Even a lot of meaningless crap pages got curtailed from the A.R.The present A.R is quite a delight.

Conclusion : So the scaling up of business is happening at a rapid speed.Its quoting at a mcap of just 46crs.The company's business of gaming and restaurants contributed 17crs on last fiscal.So roughly 2.7x of its trailing revenues.We are talking about a business with quite a bit of margin of safety.Valuation wise too,at 2.7x trailing revenues ,in comparison to the above mentioned deals,sounds pretty cheap.Scaling up of business with pedigree of Biyani,nearly zero debt company with high negative working capital and loads of cash flows makes it an interesting buy at present levels.There's no listed comparable peer,hardly any floating stock to talk about too.Even above average numbers can make the stock move really really high.

Btw : The company trades with very little volumes.Its overlooked for reasons not known to me.Buy slowly and accumulate at declines.Let the story unfold more.Don't make the stock move up with artificial forceful volumes,let market realize and re-rate it."Wish you all a very happy,peaceful and prosperous Diwali".Happy Investing folks.

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