Monday, July 16, 2012

Buy stocks of Cox & Kings around Rs 120-135

"Cox & Kings has to be under tremendous pressure in the short-term. But eventually it is a very attractive buy around Rs 120-135 range because of a couple of reasons. The price, right now, is reflecting the worst in that global scenario. Thus, we feel there is hardly 10% downside on the stock."
He further added, "Take a call on our quant model that we have been suggesting for various stocks like Sintex, United Breweries etc. In the last five years, they have gone for inorganic growth. They have acquired assets of high quality. That is what is attracting me at the current market price. Holiday Breaks PLC, the company's recent acquisition last year is very attractive for the future growth. It is a proper vertically integrated play on the tourism sector."

"Now, if you look from valuation perspective, Thomas Cook recently got acquired at Rs 14.8 annualised equivalent value. From FY13-end perspective, we finished trading somewhere around at AV of almost 20%. That means 30% minimum upside from next 18 months perspective. But we feel that the stock should go and stabilise. Right now, it is bit vibrating between this level of Rs 130 and 140. It will stabilise around at Rs 170-175 levels. So, someone who is taking a call from next six-twelve months perspective, I think he should be looking atleast 25% jump from hereon."

"If I take a valuation call, we are roughly working out with the number of close to Rs 188-202, depending upon how global scenario comes up in next twelve-eighteen months. So, this stock is very safe and the worst is already factored in into the stock price. Thus, if someone is taking a bet, he has hardly anything to lose on downside and he can use the fresh strategy to accumulate the stock. On upside, even if he gets Rs 170-175, he will make a handsome return of 25-30% in a very short span of time."

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