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2nd May 2016

Discussion in 'Portfolio Updates' started by shabbir, May 2, 2016.

  1. shabbir

    shabbir Administrator Staff Member

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    Jubilant Foodwork is a new entry in our portfolio and looks quite ok at the current levels of 1150+ish for a good long term.

    Contract notes attached.
     

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    shabbir, May 2, 2016
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  2. jaspalsaini

    jaspalsaini New Member

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    Hi Shabbir,

    1. What is the rational of buying Jubliant ? The PE is 66.
    2. How did yoy decide the entry price of 1150
    3. Is there any stop loss ?

    Jaspal Saini
     
    jaspalsaini, May 12, 2016
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  3. shabbir

    shabbir Administrator Staff Member

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    The reasons are not based on high PE but the business and state of the company.
    1. No debt.
    2. Good profit margins
    3. Sales increasing like anything.
    4. Company has reached 1000 stores and possibly targeting around 100 stores per year
    5. There is no competition to their business. If you want to be eating pizza, you have Pizza hut and Domino's and Domino's is dominating the market as I can see it from customers end point.
    6. Not very high entry as of now and the reason is we have results on May 28th when we decide if we go in for more in it or not.
    7. As management sold the company stake at 1280 and that made it to slide by another 10% which is a good 20% off from the recent high.
    8. High PE is definitely a concern but couple of years forward earnings PE is not that high as I assume it to be around 30 Rs.
    9. It has not gone below 900 odd levels in last 5 years and so that can be a stop loss or even 750ish level can also be stop loss.
    Still I will suggest you to enter into this stock with caution. Its a high beta stock.
     
    shabbir, May 16, 2016
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