Monday 24 November 2014 Buy Premier Explosives Ltd

Premier Explosives Ltd
Cool stock idea of Trade4target - Premier Explosives Ltd(PEL)  

1. What is stock market to you?

Stock market is a place which gives you lucrative ownership of companies.By owning a single stock you are actually becoming the owner of a company.Its liable to share everything with yourself.

2. What is the kind of returns that can be generated?How its comparable to bank FD returns?

I personally look for 26-30% yearly gains on a compounding basis.A 26% compounder increases your fund by 10 times(1 lakh invested becomes 10 lakhs) in 10 years.A 30% CAGR boosts your portfolio by nearly 14 times(1 lakh invested becomes 13.8 lakhs) over a period of decade.Bank FD's would just double your money(1 lakh invested becomes 2.15 lakhs) over the same period.Add up some dividend top ups which if further invested,makes the figure look much more interesting.

3. Its easy to earn this days as everything is moving up isn't it?I buy xyz and double my money in a week.

It was always easy to earn actually but only over the longer term.So how much you actually made from the time you joined markets?What was the CAGR?Everything looks green from the other side.A lot of crap stocks are moving coz of vested interests.Once the wind stops,they gonna go down like anything.Invest in a disciplined way in stocks which you understand,that too with proper portfolio allocation.Even the greatest mathematician,Sir Isaac Newton lost nearly 30crs(on today's figure) and mentioned – "I can calculate the motion of heavenly bodies, but not the madness of people".

Trade4target : Stock idea

Scripscan:Premier Explosives Ltd(PEL)
Bse code:526247
Return percentage:47%
Duration:9-12 months

History:Premier Explosives Ltd. was incorporated in 1980 and started off with manufacturing Slurry Explosives and during the 90’s started manufacturing the complete range of explosives & accessories like detonators, bulk explosives, detonating cords and blasting accessories. The company diversified into Mushroom Farming in 1997. In FY07, the company ventured into Space & Defence. The co. divested its Mushroom Division in FY08 for a consideration of around 20Cr. Since then the company is focussing & expanding into the Space & Defence sectors.

Company:The Indian Explosives Industry is amongst the top 5 in the world. Around 70% of the entire output of the industry is consumed by the coal mining industry which primarily consists of Coal India Ltd. & its subsidiaries. The Indian explosives industry is fragmented with around 45 units and around 10 major manufacturers Premier Explosives is the 6th largest manufacturer of explosives with around 5% market share.PEL caters to all mining sectors like Iron Ore, Limestone, etc..PEL is the only private sector entity manufacturing solid propellants & other specialized products for the defence sector.

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