Discover more from "One Page Per Day" by 3C Capitals
Guess this stock idea & Win Rs 5000/- gift vouchers : Our Aug'22 Micro-Cap Multibagger Pick of Mentoring Program (Releasing Today)
Margin of safety is the FIRST & MOST important thing to look for apart from the quality of promoters & sustained earning growth of the business.
Thanks for reading "One Page Per Day" by 3C Capitals! Subscribe for free to receive new posts and support my work.
We have a very bad habit of discovering stocks which are not in limelight, which are under sideways consolidation or call it under accumulation by smart money. Such stocks do not fall under momentum picks, they are called lazy or boring stocks, not discussed in the social media circle. While doing this the biggest challenge for us is to build high conviction in a business which is unknown, un-discovered, generally in the range of 50-500 Cr Market Cap (this is the high potential zone where we get 50-100 baggers).
Fundamental of these companies are not great because they are under “work-in-progress”, management of these companies are not well known names, generally they are father-son or two brothers or first generation entrepreneurs or 2nd generation entrepreneur where 1st generation was not successful. Promoters of these companies are having less than 1-2 decades of experience, they are highly ambitious but not mature. Investment in micro-cap is just like investing in a start-up business where we bet on the drivers.
More than skill, it is gut feeling based on past experiences which helps us to identify these un-known gems at early stage. Well, it is risky to get into un-chartered territory but you know, the kind of excitement and fulfillment we get when we discover such high potential business early & when we are proven right by the market is what drives us. When we finalize such micro-cap stock at early stage, we feel lonely because we are generally the first movers and there is no endorsement, we feel nervous because such businesses will not have track record or sufficient data to justify. In case if business fails, we are held responsible & accountable for identifying such companies. We know that we will be proven wrong 2-3 out of 10 cases but we also know that our 7-8 wins will cover up for the losses and will fetch extra-ordinary returns.
In the stock market, everything depends on “HOW BIG YOU THINK, HOW MUCH YOU EXPECT”. We are not here to make 50-100% returns in 2-3 years, we are not here to make 15-25% CAGR rather we are hungry to create FORTUNE, earn 50-100% CAGR or make 10-20x or even 50-100x because it’s possible to make such returns and 3C Capitals is out there to identify or discover such stocks.
Now, let me brief you about our next micro cap stock idea of Aug’22…
Market Cap < 100 Cr but they are leading company in niche segment.
Operates in one of the emerging segment with huge growth potential.
Promoters has clarity & understands the business very well. So, no issue with the knowledge & skill part. They seems to be ethical & ambitious too.
Stock trades at very reasonable valuation in terms of price earning ratio (peer trades at double valuation). Technically stock is trading near 200 DMA hence downside is limited.
Return ratios are good, promoter holding is descent, market cap / sales is < 1 while peer trades at 4.5x. Being a Nano-cap stock, it is not in the radar of PMS/Funds/Institutions etc. We will have first mover advantage here.
Market Cap of this company is 4.5 times cheaper than the Market Cap of it’s peer group having same revenue in FY22. In fact fundamentally this company is superior than the peer but trading at deep discount.
Negligible debt, improved cash conversion cycle, descent order book in hand. They are expecting order book to jump 5x in next 3 years. Based on that we can expect 10x in 5 years with huge margin of safety in this stock.
Stock trading close to 40% below 52 Week’s High. Their chart pattern shows that stock use the make up move of 50-100% during Oct-Dec' every year, may be because they earn 50% higher revenue in H2 as compare to H1.
Interesting thing is they raised descent fund at a price which is 30% higher than the CMP of stock. Promoters added good amount of capital at higher price shows confidence in their business.
We do not see much downside in this stock, maximum 15% downside possible while the upside is 350% in next 1-2 years. Also the stock has delivered zero returns in last 4 years while their revenue doubled in last 4 years.
Well, it’s time for you to guess this stock idea and win Rs 5000/- worth of gift voucher. You can submit your response latest by 2pm TODAY (25th Aug 2022) through WhatsApp to +91 93541 79604.