Birla Corp

I took a dig at Birla Corp today .. at about 325 rupees. (I had previously bought it at rupees 210 and sold it at 350 .. it seemed attractive again). As usual, haven't gone into the details much and based the investment on a back of the envelop calculations. Quick notes -
1. One of the lowest PE ratios among all cement / diversified stocks (about 6.5 on a 1-yr fwd)
2. Investments of about 420 crs in the B/S (haven't seen the annual report, but should atleast come at cost .. effectively, 60 rupees per share)
3. Profits for last 4 quarters, between the 95 crs - 105 crs range (annual profit estimate at 400 crs, hmm .. ingenius calculations)
4. Debt recap ratio at 50% ... quite comfortable !

And.. just to be sure .. i searched for an analyst report on Birla Corp. Fortunately, not many analysts are following it. Religare did publish an update in Nov '07 and has put a buy indicator on it with a target of 500 rupees

Amtek India

Some back of the envelope calculations ... Amtek Auto shares, in Amtek India are worth about 75 rupees per share.

In isolation, Amtek India is at a P/E of 8. Fundamentally, auto ancillaries should be a big gainer with the 1 lakh rupee car etc. perching on Indian roads. Additional infrastructure and rising incomes also help.

KRBL

I had made a mention of KRBL early this week. I got two comments .. one, an anonymous user (read: free stock tips loader) in his/her classical brevity wrote : 'where is the text?'

The other, Amit posted the following report from ICICI Direct (here)

The Pankaj Pandey (the analyst tracking KRBL) report was an excellent overview of the industry, fundamentals and financials that KRBL rides. My reasons for picking KRBL were based on Grahamian principles (to a decent extent) :

a) NCAV .. KRBL enjoys an NCAV of Rs. 30.5, which would have been a no-no in Ben Graham's blue book of stock picking rules but still is much better than other companies.

b) The more interesting and valid justification of the stock came from the debt recapitalisation method which puts KRBL's safe borrowing capacity at 370 crs. And while KRBL's m-cap is only 257 crs, you have a brilliant margin of safety of over 100 crs with KRBL

c) PE is definitely a killer ... my 1 yr fwd PE for KRBL was a miserly 3.9

I bought about 200 yesterday and another 150 today

Andhra Cement

I picked up about 700 shares of Andhra Cement. I am sharing some quick facts here -
a) Sales have gone off the roof. From 100 crs last yr (in 18 mnths) to 270 crs this year (on 12 months) is brilliant. Also the Q-on-Q sales have been on the rise.
b) Profits : dont look at PAT because last yr's 40 crs is laced with an extra-ordinary income of 65 crs. The op profit was -25 crs for last year. This year, Andhra Cement closed at 38 crs of net profit.
c) The 1 yr fwd P/E is around 6, which makes it one of the cheapest cement stocks in the market.

Cement stocks are a function of the infrastructure growth in the country and although, I despise fundamentals and industry analysis .. i can see it's effect on the company financials here.

Net net, Andhra Cement is extremely convincing. Currently at about 40 rupees.

Holding on

I sold equities worth about 4.7 lakhs on Friday, in the process realising a pre-tax gain of about 2.2 lakhs on an investment of 2.5 lakhs. This cumulates to an absoulte return of 88% in a 8-month period and an annualised 132% return. Of the stock, two stocks had risen by 200% while one stock gave a 300% return of the investment.

Interestingly, it brings me to the subject of holding onto stocks. This is perhaps the first time, I've actually cashed-in on my buys by being patient and not selling off the stocks at a frantic 50% rise. There's much more to be made on holding onto stocks.

I now plan to re-invest these 5 odd lakh rupees in a chunks of 40,000 rupees in 8 different stocks while the rest of the monies will be in parked in cash and liquid investments (in a 50:50 ratio). In essence, we'll now work like a small PE firm with a holding period of 4-5 years on every stock. The target annualised yield at the end of 5 yrs will be about 30%. The 5 lakh rupees would thus have risen to 18 lakhs.

Steve Jobs & Stanford University Commencement Speech

http://www.youtube.com/watch?v=D1R-jKKp3NA

The transcript:

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: "We have an unexpected baby boy; do you want him?" They said: "Of course." My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn't interest me, and begin dropping in on the ones that looked interesting.

It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:
Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, its likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together.

I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don't lose faith.

I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don't settle.

My third story is about death.

When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something.

Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now.

This was the closest I've been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

Thank you all very much.

Amtek India

My last post on Amtek India was way back in Feb '06. (here) Amtek was priced at 100 rupees then and reached a high of 207 rupees. It's currently lingering at around 165 rupees for a 2-rupee share. Part of the reason for this mispricing may be the overall investor apathy to the auto and auto component sector.

The financials of Amtek India are enclosed -
Share capital : Rs. 18.40 crs
Loans : Rs. 621 crs
Investments : Rs. 54 crs
Net CA : Rs. 317 crs
FV per share : Rs. 2
Dividend per share : Re. 1
LY profits : Rs. 66 crs

For the year closing Jun 2007, the company profits are expected at about 120 crs. The profits and sales have risen by 100% in the last one year. Even if we assume a profit level of 120 crs for the next year, the fwdPE for Amtek India will be a comfortable 12.50.

The margin of safety for Amtek India will be the 96,75,095 shares of Amtek Auto that they have, as per the 2004-05 annual report. I havent read the 2005-06 annual report (pdf, 14.4 MB) but if we assume the number of shares stay at this number ... the latent value of Amtek Auto shares (CMP as on 13th Aug : Rs. 375) would be a monstrous Rs. 362.8 crores. In other words, this contributes 20% to the value of the Amtek India share.

Fundamentally, the auto component industry in India is extremely strong. With cost, being a priority for global manufacturers .. multiple players are looking at India as a sourcing base and setting up plants to feed the masses's demand for transportation.

An assessment of Amtek Auto will also equally useful ... if anyone has any info on the same, pls let me know.

Entrepreneurs

http://www.hbs.edu/entrepreneurs/ is a link which no wannabe-entrepreneur should miss. Enclosed are the memoirs of over 25 HBS alumni who have taken up entrepreneurship. I read through most of them and particularly liked the capsule on Jim Sharpe of Extrusion Technology.

Happy reading !!

Graphite India

Graphite India financials are enclosed -
Share capital : Rs. 29.38 crs
Loans : Rs. 524.93 crs
NCA : Rs. 455.23 crs
FV : Rs. 2 per share
Dividend per share : Rs. 1.20 (adjusted for stock split)
Profit ('05-'06) : Rs. 62.95 crs
CMP : Rs. 55.9

Ben Graham would have been extremely uninterested in Graphite India. A negative NCAV of -4.9 rupees per share, dividend yield of just 2.14% .. virtually no margin of safety.

The annual report shows that Graphite India is a cash rich company (Rs. 143 crs or Rs. 10 per share in cash). This might however be used for capex requirements. Further, the company has put in 4 strong quarters of performance and profits will be over 100 crs for the year .. an EPS of Rs. 7.14. The new PE is just around 7.10.

Sales of the company are on the rise .. 513 crs ('04-05), 615 crs ('05-06) and 820 crs ('06-07). So are profits. The overall industry buoyancy is good over the long term and also the short term. My kind of company. I bought shares in the company at Rs. 49.

Music to my ears

Finally, McLaren beat the qualifying juggernaut of team Ferrari. With the times Alonso and Hamilton have put at Monaco today, tomorrow's race can well be an all-McL battle.

Anyways, enjoy some of the pics I clicked at the Malaysian GP in Sepang (2007).

The Circle and small cap investing

When a friend suggested we should start investing in small-cap companies (companies with an m-cap of below 300 crs), I was the most vocal protestor. My skills are rather poor at influencing (Read: non-Caldini), and hence I too participated (though unwillingly) skirmish with investing in small cap companies 6-7 months back. It's turned out mighty profitable with annualised returns of over 65%. But the real celebration has been around the fact that inspite the increased stock price, our PE's in the companies have halved in the same time and the balance sheets have turned much stronger.

Some notes -
1. We're looking at growth companies .. so a current PER of 50 doesnt bother us (I have always supported companies whose current PEs were below 10, so you can imagine my dissent when "The Circle" would suggest a scrip which was at a high PER)

2. The topline has to grow .. and so should the bottomline .. and so should the DEBT in the company. We get frustrated with companies who donot actively use their balance sheet strength to pick debt from the market to finance growth. So a cash-rich, zero debt company would be placed in the CashCow quadrant of our investing map but then a low-cash/adequate-debt/growing company would be placed in the Star quadrant

3. There has to be news value. The management should have it's PR cell and ensure maximum face time with the media. We are not interested in reticent, passive management. Aggression is the key.

4. We did not look at share volumes (or liquidity). Afterall, they are companies in the making. The lower the volumes, less is the movement in shares .. management can get on with their work without worrying about stock movements (donot confuse this with pt 3)

5. Dividend paying companies .. dont bother. If the rupee invested in the company can give 1.2 next year, then we are game to zero-dividends. (I cant find a fixed deposit which can give me 20% p.a.)

Why tell you this now?
a) I was circumspect on how well it will do .. with time my confidence has improved. A stock market crash will only fortify it further as I can invest even higher sums then
b) The market is still fresh with many such companies (we found 4 such companies while reading the morning papers, over breakfast) .. just read the financials.

PS: The Circle is what my friends (and I) call this investing club of ours :-)

Sical Logistics

With retail being the latest talk of the town, it's not difficult to explain why the logistics industry will be benefitted with new, big players entering the country. Sical Logistics is one company that seems to understand that, with it's recent forays in ramping trucking operations (May '06), raising USD 75m through FCCBs (Apr '06), building an iron-ore terminal (Jul '06), buying another logistics company (Sep '06) etc.

The financial details are enclosed :
Share capital - Rs. 30.19 crs
Loans - Rs. 313.4 crs
Investments - Rs. 41.0 crs
NCA - 338. 69 crs
PAT - Rs. 65.1 crs (FY 05-06)

Three key observations in FY 05-06 data :
1. There was no dividend given by the company for the last 4 yrs inspite of making profits as high as Rs. 65 crs in the last year
2. There was a drop of 15% in the operating income of the company as compared to 2004-05
3. Strangely, it's investment column speaks of a company named Southern Petrochemical Industries Corporation Ltd. where they had invested 3.01 million shares at a cost of 12.3 crs. The scrip had delisted from the stock exchange on Oct 2004. Am not sure it's listed anywhere .. this fact was not mentioned in the balance sheet.

This year, Sical will close at around 33 crs of net profit. That's an EPS of Rs. 10.91. At a CMP of Rs. 236, you're looking at an expensive share - with a P/E of 21.6. I am not tempted to look at the balance sheet strengths as the company has taken enough leverage this year. There was an interesting analyst concall which I went through www.indiaearnings.com. The summary is enclosed -
1. The company is divesting it's non-core businesses totalling Rs. 100-107 crs
2. Expected topline for the company is 500-600 crs (even lower than last year) but margins of 10-11%, a PAT fo 50-66 crs. At this number, the PER turns to between 10.7 and 14.2.

I could find two news items on moneycontrol.com which were bullish on Sical. BRICs went whole-hog on this company with a price target of Rs. 701 (here), while Edelweiss was more sedate in it's evaluation (here). Net net, Sical is a company to keep a watch for. If you find any reports on Sical, kindly email them to me.

Macmillan India

Macmillan India has it's results coming up in the next 2 weeks. For now, I am looking at a company 33 crs in profits (FY '06-07) and has an EPS of 19.64. At a CMP of Rs. 299 per share, this translates to a trailing PE of 15.22 .. maybe, not that impressive. But here's a company with a solid balance sheet -
a) The company has zero debt in it 's books
b) It has cash of 47 crores (FY '05-06) which corresponds to Rs. 28 per share worth cash
c) The liquid investments (mutual funds and other money market instruments) in the company are around Rs. 32 crs.
d) NCAV (excl invt) = Rs. 56.5 per share and NCAV (incl invt) = Rs. 75.5

Macmillan India is at it's lowest stock price in the last two years. It would be interesting to take a call on the company post it's AGM on June 4th. Keep this stock on your watchlist.

The Law of Small Errors

An extract from an article by Keith Devlin

How many people you need to have at a party so that there is a better-than-even chance that two of them will share the same birthday?

Most people think the answer is 183, the smallest whole number larger than 365/2. In fact, you need just 23.

Surprisingly, the number of people you need to have present for there to be a better-than-evens chance of someone sharing your birthday is not 183, but the much larger 254. (Yes, really, 254, including yourself.)

Here are the answers ...

1. First, the coincidence of two birthdays. It turns out to be easier to compute the probability that no two people at the party have the same birthday, and then subtract the answer from 1 to obtain the probability that two people will share a birthday. For simplicity, let's ignore leap years. Thus, there are 365 possible birthdays to consider.

Imagine the people entering the room one-by-one. When the second person enters the room, there are 364 possible days for her to have a birthday that differs from the first person. So the probability that she will have a different birthday from the first person is 364/365. When the third person enters, there are 363 possibilities of him having a birthday different from both of the first two, so the probability that all three will have different birthdays is 364/365 x 363/365. When the fourth person enters, the probability of all four having different birthdays is 364/365 x 363/365 x 362/365. Continuing in this way, when 23 people are in the room, the probability of all of them having different birthdays is :

364/365 x 363/365 x 362/365 x . . . x 343/365.

This works out to be 0.492. (It is when you have 23 people that the above product first drops below 0.5.) Thus, the probability that at least two of the 23 have the same birthday is 1 - 0.492 = 0.508, better than even.

2. Now for the problem of the birthdays different from yours. Pick any person at the party. The probability of that person having a birthday different from you is 364/365. (Again, I'm ignoring leap years, for simplicity.) Thus, if there are n people at the party besides yourself, the probability that they all have a different birthday from you is (364/365)n. (Since we don't have to worry whether their birthdays coincide or not, we don't have to count down 364, 363, 362, etc. as we did last time.) The first value of n for which the number (364/365) n falls below 0.5 is n = 253.

And that's all there is to it.

Electrosteel Castings

The key financials of Electrosteel Castings are enclosed -
Share capital - Rs. 20.7 crores
Loans - Rs. 385.6 crores
Net Current Assets - Rs. 560.0 crores
FV - Rs. 10 per share
Dividend - 12.5 rupees per share
CMP - 387.00 rupees per share (May-22)
LY Profits - Rs. 76 crores

This corresponds to -
NCAV - 84.5 rupees per share
Div Yield - 3.22%

Investments in the company are Rs. 232.2 crs. Of this, 147 crs are in mutual funds. This (147 crs) corresponds to an additional margin of safety of Rs. 71 rupees per share. Hence the NCAV (w/ invt) equals 155 rupees per share. CMP : NCAV ratio is just 2.48 (good comfort)

I expect current sales at Rs. 110 crores for the company i.e. a trailing EPS of 53 rupees per share or, a P/E of 7.3. This is brilliant as compared to it's peers aka Bharat Forge, Ahmednagar Forging, IID Forging etc. (Bharat Forge is at a PER of 32)

The sales of the company have been on the rise - 677 crs (2004), 897 crs (2005), 971 crs (2006), 1140 crs (FY2007). Profits have remained uniform over the last 4 years. FY2007 has however been different with a 35% net gain over last year profits. As long as profits remain at the same levels, I am up for investing.

Electrosteel Castings is a Rs. 600+ share (in 12-18 months), as long as they are no strange downsides in margins. (satirically, the margins have been coming down but increased sales activity is ensuring constant generation of profits). It is however a mystery why the stock has been between the 380 and 395 mark for the last 3 months, when so much activity is happening around the sensex. I did double-check for possible downturns ... looked at reports of Ahmednagar Forging and Bharat Forge - there weren't any industry risks in sight. A good buy !

It Happened In India

Kishore Biyani's beautiful book, where he traverses through his experiences in growing Pantaloons, Big Bazaar, Central etc. from his life as a trader to an industry 'maverick'. I particularly enjoyed the simplicity (or Indian--ness) of his writings .. a symbol of his own self.

I am taking one small part of this book (Pg 100-101) for all to read -

".. we were fortunate to have a group of long-term individual investors who stared believing in us. All of them had visited our stores and were prepared to focus more on the number of customers coming in, rather than the financial numbers on the balance sheet ...

One of the first was a Bengali gentleman from Kolkata who happened to visit the Pantaloons outlet in Gariahat. He saw the crowds and the merchandise we were offering and started to put in his stakes. He did not get good returns in the beginning, but his trust in us was so strong that he kept acquiring our stock as well as recommending it to his friends in the investment community ..."

Rakesh Jhunjhunwala :

The market's anxiety emerged from a lack of appreciation of retailing as a business and of Kishore as a person. He was considered over-ambitious, but they all missed the big picture as well as the bus.

Kishore was aggressive in a field that was supposed to see a lot of growth in India. The stock market was concerned about the high debt-equity ratio. But I found that it wasn't the debt that was high, it was just the equity base which was low. So we helped him raise funds through private placements.

The backed Kishore because he was very different from most entrepreneurs. First of all, he was very aggressive and secondly, he wasn't money-minded. For him achievement meant doing what he thought innovative. He understood customers well and there was a lot of clarity in his thinking. Also, he went beyond the numbers. I found this quality to be a key differentiator. ...

Provisions & Prakash Industries

On the face of it, Prakash Industries seemed a good bet. The company has embarked on a number of cost saving initiatives and has improved profitability in multiple areas. The P/E of the scrip is around 4. The company has diversified into various businesses like power, wind energy etc. There is also a lingering news of a de-merger which could unlock more value for stockholders (which is primarily promoters).

However, the announcements page of BSE had one section which caught my attention. It seems the company has a penchant for "ignoring possible risks". Here's some important items the auditors pointed out -
1. No provision has been made in respect of doubtful / disputed debts, loans and advances aggregating to Rs 109 lacs
2. No provision has been made in respect of lease rental liabilities due to pending cases and settlement of disputes with the lessors, the amount whereof is not ascertainable.
3. No provisions for gratuity and leave encashment has been made, the amount whereof has not been ascertained. (Refer Note 7)
4. There is a lower charge of interest of Rs 563 lacs for the quarter (Rs 1668 lacs for the nine months period) ended December 31, 2006 for which the settlements with the concerned lenders are yet to be concluded.
5. No adjustment has been made in the accounts for the amount waived under settlements entered into during the year with financial institutions.
6. Adjustment has been made in the books of account towards Minimum Alternate Tax which may be set off against future tax liability of the Company. However, the auditors are unable to express any opinion on the Company’s ability in future for this set off. (Refer Note 13)
7. Provision for Deferred Tax Liability has not been made. Consequently, the profit for the quarter & the period ending December 31, 2006 has been shown higher by Rs 1387 lacs and Rs 3702 lacs respectively. (Refer Note 14)
8. No amount has been amortised towards Deferred revenue expenditure incurred during the year by the Company. (Refer Note 15)

These provisions can have a huge impact on the profitability of any company. Let's take two examples here -

1. Consider an insurance company. The perfect recipe for insolvency is the combination of aggressive (under) pricing and low reserving. The two underlying motives for this are - 1. expansion & increasing market share and, 2. inflating the profits. These short-term moves can really hurt the company when a serious claim hits them - and they find themselves out of money to settle the claim (Read the article on Insurance Company Failures for more info on this)

2. Frequent flyer miles given out by Airline companies. Currently, around 14 trillion miles have been unclaimed - this is a risk faced by all airline companies where they, as a group, have to quantify these 14 trillion miles and accommodate this liability in their accounting statements as a provision (reserves). American Airlines carries a USD 1.6 billion liability in it's books, in unclaimed miles. Interestingly, 7.5% of all customer who flew in the US, were on free trips. That's 7.5% less income for all airlines.

Im not comfortable with ivesting in Prakash Industries given these provisions. This is quite typical of a promoter-led organisation (promoters in the company have over 2/3rd ownership and public holding is just 15%).

Indian videos on YouTube

1. A brilliant musical composition around our national anthem, Jana Gana mana .. by A R Rehman with other great Indian maestros' . A must watch !
http://www.youtube.com/watch?v=6gdwKovcDBE

2. Vande Mataram - sung by Lata Mangeshkar .. good, but I would have preferred the simple Vande Mataram which I learnt at school (without the fusion music)
http://www.youtube.com/watch?v=s1UgUpKz3Lc

3. School chale hum - excellent video to promote children literacy & reduce school dropouts in India
http://www.youtube.com/watch?v=Sni0ryF619w

4. India poised -
a) Gulzar (Hindi) - http://www.youtube.com/watch?v=h1tuLZMgzq8
b) Amitabh Bachchan (English) - http://www.youtube.com/watch?v=xN7oX1O6xTY

5. Maa tujhe salaam - A R Rehman's first composition .. brilliant video and beautifully sung
http://www.youtube.com/watch?v=vDRBREpR0mc

Hamara Bajaj

Numerous organisations have tried, but couldnt achieve the emotional connect of these two Bajaj ads. Watch and enjoy !!!

[1] Hamara Bajaj (1989) : http://www.youtube.com/watch?v=dcoSeg2y6tk

Yeh zameen yeh asman .. hamara kal hamara aaj (2)
Buland bharat ki buland tasveer .. hamara bajaj (2)
Buland bharat ki buland tasveer .. hamara bajaj (2)

[2] Hamara Bajaj (2001) : http://www.youtube.com/watch?v=-h8hrlbdEz4

Badal rahein hum yahan .. hai yeh zaamen yeh aasman
Naya hai kal .. hai kal .. hai kal ..... Hamara kal
Naya hai aaj ..... humara aaj
Naye bharat ki ..... bulund bharat ki
Nayee tasveer .. tasveer .. tasveer ..... Bulund tasveer
Hamara Bajaj .. Hamara bajaj .. Hamara Bajaj

Bhagyanagar India Limited - a buy back candidate

The last time I purchased this scrip, it was a 4-bagger. (last reco was in Jan '06). Though it would be wonderful to have similar results, there is enough merit in the stock to purport a second buy. Here's why -

1. There is a strong margin of safety in the stock. The NCAV of the scrip is Rs 22.40 per share. At a CMP of Rs. 43, this is a pretty good number

2. Interestingly the company's chief promoter, the Surana Group has been busy in March '07 buying shares in the company. Maybe they too feel, the company is undervalued at the current levels. Also Bearn Stern has a 5% stake in the company.

3. The last quarter results were fantastic. The company made a PAT of Rs. 48 crores .. a quarter EPS of 6.57 rupees per share. A good reason for these numbers, is the company's diversification into wind energy, estate and infrastructure. Copper products and jelly filled cables are still the primary revenue line for the company

4. Rising sales and now, rising profits.

5. The company has investments of 12.16 crores. Most of this money is in mutual funds, which adds further margin of safety to the investment. (around 2.8 rupees per share)

6. Although some of the current numbers are not comparitive because of changes in business .. i suspect the P/E of the company is around the 5-7 mark (which is quite comfortable)

Karvy has also placed a buy on Bhagyanagar India at a target price of Rs. 65. I agree to the buy decision but feel there more than sixty-five to this stock. A well diversified business, growing businesses, more sales & profits, under-valued, excellent NCAV .. a definite buy.

Zero percent schemes

Yesterday, I had gone shopping with my mom - to purchase a microwave. The price of the microwave quoted by the shop was Rs. 15,000. Interestingly, there was a 12 month finance option available on it .. at Zero Percent Interest. The shop had done a brillaint job of putting up posters and pops all around the place to promote this grand scheme. As a customer you should be extremely hapy about this, right?

The math is quite different in this case. First, the finance option for the item is not 12 months, it often 8 months. Secondly, finance companies would charge 4 installments upfront (so you lose out on the interest that those 4 additional installments (of Rs. 1250 each) would have made over a 4 month period .. this amount comes to Rs. 62.50. Thirdly, you will be charged a processing fee (in my case, it was Rs. 800).

So there you go, in t(zero) you would recieve Rs. 15,000 but cough up Rs. 5,000 (1250*4) plus another 800 rupees in processing fees .. all totalling 9200 rupees of value recd. From t1 to t8, you will give Rs. 1250 every month to close the loan. Put these numbers in an excel sheet and use the IRR function, you find that the finance company has taken an interest of 22.7% in this so-called zero interest scheme.

I didnt settle for this finance 'scheme'. Instead used my credit card to pay for the microwave. The credit card gives me more flexibility to pay my bills and gives me reward points. Interestingly, credit card companies in India have started promotions of convertng these puchase into 6 month installment so that I can regulate my interest payout. I plan to do this, in a couple of days.

Rational market?

Page 26, The Times of India, May 18th 2007 (Friday)
The short snippet in the top left of the page reads : Max India reports a loss of Rs. 3.82 crores.
The middle strip in the page which shows NSE TOP Gainers reads : Max (I) : 257.65 (an intra-day gain of 7.1%)

Further, in the last one week - the price of the share has increased from 204 to 260 rupees per share. Also, some major shareholders have increased their holdings in the company - Medicare and Maxopp Investments. Interestingly, Max India has given an announcement from the Board Meeting that they will not recommend any dividend for the year (obviously, due to the negative profits). The share price rose inspite of no-dividends.

On a business front, Max has primary interests in two fields - Insurance and Medical facilities. While the latter requires heavy capex, the former reaches break-even only in 5-6 years. Also the competition in insurance has been increasing and Max NewYork has to totally rely on agents (ICICI Prudential, SBI Life have a strong bancassurance base aswell). At annual sales of around 170 crs and net profits of 10 crs, the company is too small to vouch an interest in conservative investors like me.

But i'll sure like to know what the fuss is all about - why would people put extensive money on company which has just declared a loss for the quarter. Am I missing something?

Merck

There's been lots of action around Merck. First, the Indian arm sold off it's Life Sciences & Analytics business in 2006. As a result, the company's sales fell by 31% and PAT by 14% for the last quarter. Secondly, the news of May 13th says that Mylan has acquired Merck KGaA for USD 6.7 billion.

Two other pieces caught my attention however -
1. a single line in the Merck website page on investor relations page which reads "the company has investments in bank deposits and liquid funds of Rs. 3054 million". Or rupees 305 crs. At 1.68 cr outstanding shares, the cash in the company comes to Rs. 181. The current price of the share is 405 rupees. Cash constitutes 44% of the CMP of the company !! (cash-rich company)

2. A news item on the internet which reads how Merck is sending top executives to India to size up the situation here. They plan to introduce new drugs soon. (I dont really read much into these news articles, but it did "catch" my attention)

On a more financial front, the current quarter yielded 15.9 crs on sales of 77.2 crs. This is not bad .. a NPM of 20%. Extrapolating these numbers and adding a downside risk of 18%, the annual profits for Merck should be around 50 crores. Or an EPS of 29.76 rupees per share, hence a P/E of 13.6 (which is on track for a pharma company)



Interestingly, Merck is at it's all-time low for the year. There is some muddle around the company, but I think the numbers add up. I'll invest some in the company.

Sitting duck - Jindal South West Holding Co.

This piece has been borrowed from an Emkay report. The report says -
1. While the total m-cap of JSWHC is only Rs. 334 crores, the estimated value of it's investments is Rs. 1535 crores at today's value. This represents a discount of m-cap to value of investments, of 78%.
2. The current stock price of the company is Rs. 301. The report calculates that this price has a 130% upside and Rs. 681 per share should be the ideal price.

Occurences like this (the sitting duck syndrome) should not happen often in an 'efficient' growing market but the study of equities over the years has infact solidified this belief in huge market anomalies. Only last February, we analysed Jai Corp on my previous blog. The recommended price of 104 rupees then, is today a 1857 rupees scrip.

I would signal a buy on this stock and to be kept for long. Would appreciate if someone can investigate this company further.

Getting greedy

A common thread amongst all people reading this blog is the greed for earning more - to make every rupee count for more & beyond. Corporations are no different. To squeeze out every dollar of profits from the scarce capital base is a prime priority for small and big firms alike. A recent news article described how Walmart exploited a tax loophole to save taxes .... Article

The modus operandi was simple -
1. Walmart transfers the asset to an REIT which is largely controlled by a subsidiary of Walmart (REIT means a Real estate Investment Trust). The Walmart store then pays a rent to the REIT, which is tax deductible (Taxes saved - 1)
2. The REIT in turn pays dividend of the Walmart subsidiary which is 99% of the rental received. The rule says, if an REIT transfers most of it's earnings to it's shareholders as dividend then no tax is deducted on the amount (Taxes saved - 2)
3. The subsidiary in turn, transfers the monies received to the parent. The transfer of income from the subsidiary to the parent involves no taxes. (Taxes saved - 3)

The taxes saved in question is an incredible USD 2.3 billion !!!

The Big-Mac Index

The Big Mac index is based on the theory of purchasing power parity, according to which exchange rates should adjust to equalise the price of the basket of goods and services around the world. The basket in question is: the Big-Mac burger.

The notion of of the PPP is that a dollar should buy the same amount in all countries, and in the long run - the two countries shall move towards a rate that equalises the prices of an identical basket of goods and services. Now consider that all currencies will try to balance this delicate equation and tend towards a singly acceptable equation which would read something like :
aC1 = bC2 = cC3 = dC4 = ..... = nCn (really long term)

Lets take an example from the table below :
The price of Big-Mac in China (remember some news stories on the move to banish McDonald's from the forbidden city) is 11.0 Yuan which translates to 1.41 USD (7.77 Yuan = 1 USD). However the PPP calculation of the Chinese Big Mac (as compared to the US) would be 3.42 (i.e. 11.0 Yuan / 3.22 USD). This means, the Yuan in the long run will be valued at around 3.42 to the dollar .. while the current Yuan/USD fx rate is 7.77 ... indicating a possible 56% appreciation in the Yuan w.r.t. the dollar.


While the interplay between developed and developing/under-developed countries may not be too good for comfort, the difference in the Yen and USD is really appalling. The current exchange rate is 121.0 and the Big-Mac parity is at 87.0 (a big difference of 28%)

Nahar Export de-merger

In April 2006, Nahar Exports Ltds informed the BSE in an announcement that for every 100 shares a shareholder holds in Nahar Export (at a FV of Rs. 10) - he will receive :
1. 70 shares of NEL (at FV = Rs 5) and,
2. 55 shares of NSML (at FV = Rs 5) (Nahar Spinning Mills Limited)

This was discussed in my post on 26th April, 2006 (here)

The demerger came into effect today. The mechanics of the deal are enclosed :
OUT : 100 NEL shares @ Rs. 101 = Rs. 10,100
IN : (70 NEL shares @ Rs. 60.75) + (55 NSML shares @ Rs. 149.05)
= Rs. 4252.50 + Rs. 8197.75
= Rs. 12,450.25

Value unlocked = +23%

Interestingly, the buy recommendation was made when the price of NEL was Rs. 80 per share. The annualised return thus comes to 61% plus, dividend income.

At current levels of Rs. 60 per share, NEL is fairly valued and not a buy scrip.

High-rise

Prajay Engineers Syndicate Ltd. is a construction company based out of Hyderabad, India. The financials of the company are enclosed -
LY profit = 22.8 crs
Share capital = 16.78 crs
Loans on book = 74 crs
Net CA = 107.1 crs
FV = 10 rupees per share
Dividend = 2 rupees per share
CMP = 215 rupees per share (Mar-20)

Hence, initial analysis of stock >
Div yield = 0.93%
NCAV = 19.74 rupees per share
EPS = Rs 13.59 per share
P/E (on LY) = 15.82

The numbers didnt look that impressive until I check some other important parameters -
1. Expected profits of the company based on last 4 qtrs is 52 crs. This would propel the EPS to over 30 rupees and the P/E comes down to 6.94.
2. While profits are expected to grow by 160%, the sales too are growing by over 60%.
3. The debt recapitalisation ratio (as a %age of m-cap) is a huge 54% which is good margin of safety for the risk-averse value investor.

The recent budget has not shown any negative sides to the construction industry (although infrastructure project companies do get some stick) for companies like Prajay. However, the capping of cement prices will mean an increase in the raw material cost for Prajay as it will passed down to construction companies.

Prajay looks like a good bet to hold for the next 3-4 years, as India rides on the infrastructure and extended housing phase. At a low P/E & growing profit performance, Prajay is a good buy.

A sitting duck?

A stock with -
a) Cash per share of 38 rupees (which is more than 50% of the CMP)
b) Growing sales (15% increase in sales over LY expected)
c) Growing profits (35% increase in profits over LY expected)
d) Debt recap of 49% of current market capitatlisation
e) Estimated PE (trailing 4 qtrs) is 5.86

A software company ... surprised? Aftek Limited

The company has built up stakes/acquired a number of companies based in the US and Europe and is creating a niche for itself. I particularly like the strategy of partnering with other companies which gives them ready access to a field-force and local know-how (and they are doing it by acquiring control rather than an MoU).

At 68 rupees per share (Mar-14), Aftek Ltd. is undervalued. The stock offers deep discount and if matched with existing tier-2 software companies, has a price upside of 141% .. reaching 165 rupees per share in the next 12 months.

Strangely, the stock has been lying around (albeit, with enough volumes per day), with low upward movement. Any answers?

Mukand Ltd.

Note: Annual report not available. If available with you, pls email me at shankar.nath@gmail.com

LY profits = 61.5 crores
Share capital = 73.13 crs
Loan on books = 1,117 crs
Investments = 95.3 crs
Net CA = 962 crs
FV = 10 rupees/share
Dividend LY = Nil
CMP (Mar-16) = 78.30

Primary interests in Mukand Ltd. are on account of -
1. Core profits and sales growth at 30% and 18% resp. I estimate a profit closing of approx. 90 crores this year end. (at an EPS of 12.3 rupees/share).
2. The debt recapitalisation of Mukand is an amazing 44% of m-cap
3. Cash on books (on 31st Mar 2006) was 18 rupees per share (on account of the one-time income of 63 crs in 2005-06)
4. Trailing P/E for Mukand is 6.50 (the best in it's class)

The analyst presentation on it's website which gives a good take on it's future strategy. The company has a positive export strategy, heavy incidence on automobiles, introducing methods to dissolve the heavy debt on it's books, exploring new sectors and has strong relations with it's clients.

Do check the balance sheet of the company for three key points -
1. Nature of investments with the company (93 crores in Mar-2006)
2. Land available with the company (and value on books) (pls note: the Kurla land sold by the company for 221 crs may have been worth much much lower in the books of the company .. see gross block)
3. The management discussion & analysis of the company, w.r.t. debt-reduction, existing non-core businesses and capex. (a reduction in debt - using the cash on sale of land - will lower interest cost & boost profits; the company will however, not be in a hurry for this as they can save on taxes by this move)

At 78 rupees per share, the stock is undervalued. Mukand is a strong, solid stock and I expect it to fetch a price of around 125-140 rupees in the next 7-8 months.

The charting of the scrip is enclosed -

Why Value Value?

This was the title to Professor Sanjay Bakshi's first class in SABV at MDI Gurgaon, batch of 2000-02. The presentation had the case of EG Corporation and areas in which we could unlock value. (pls email me for the ppt)

Likewise, I had an interesting conversation with Saurabh yesterday on "value". We've, in the last many discussion on blogs, have explored value primarily from an EPS (visible) or investments (hidden) perspective. However in today's complex investing field some new areas of value have come forth. Database is one of them.

In other words, your customer records can be one of the primary value creators for companies. A number of Indian companies are exploiting their large business presence by selling a multitude of products e.g. ICICI Bank, Tata (with Trent, Tata Teleservices), Reliance (Retail, Telecom). Infact Reliance Energy's acquisition of BSES if looked just from a database viewpoint adds 25 million customers in Mumbai, Delhi, Goa and Orissa. 25 million customers - who can now be cross-sold mobile phones, credit cards, insurance, mutual funds, home loans, auto loans etc. etc.

Two thoughts came across -
a) What is the probability of a company utilising this database?
b) What is the monetary value that can be attached to this database?

a) As more companies join alliances (read: co-exist), the need for leveraging each others resources will increase. Database will be an obvious choice. And hence, cross-sell. For service companies, this "probability" will be much higher as compared to single product-institutional buyer companies. Professional managers will soon exploit this opportunity.

b) Adding a monetary value may be a bit difficult. Lets try a different tact here. The number of financial products a customer has in India averages 9 (this includes your LIC, savings a/c, credit card, car finance, home loan, NSC certificates, mutual fund, demat, PF, PPF, EPF etc.). Total middle class household in India is estimated at 180m. At an average annual income of 4000 USD (or Rs. 2 lacs) and a savings rate of 26% and an investible %age of savings at 35%, we can conculde that 1 HH in India spends just Rs. 18,200 per month on investments. While commission rate can be from 0% to 30% .. we would assume a middleman rate of 4% for ease. So, 1 Indian HH can earn Rs. 728 per month for a middleman. So the entire opportunity set for BSES (25m customers) is 11.55 billion rupees or rupees 1155 crores of income (not sales). Simple telemarketing gives a response rate of 2.5%, and assuming a 500 seater setup - the annual profits from this simple cross-sell activity should give an additional income of Rs. 32 crores for the year.

Sounds rather complicated, but an additional 32 crores based on an inexact science (with enough upside) is food for thought.

Other "value" areas will be patents, brand name and now, CEOs (imagine the distortions in stock price of a Virgin Atlantic with a Richard Branson and one without him)

Birla Corporation

Over the last one month, majority of all cement stocks have dropped .. and so have a number of diversified companies that are with the cement, steel, rubber or allied businesses. Consequently, a number of them have moved into the realm of a plausible value buy. Birla Corporation is a likely candidate.

Birla Corporation is a diversified company with interests in cement, steel, auto trims and jute. It has a particularly strong balance sheet and sales of over Rs. 1500 crs. Some specs from the company reports are enclosed :

Share capital = 77.01 crs
LY profits = 125 crs
Loan on books = 231 crs
Investments = 175 crs
Dividend = 2.25 rupees per share
FV = Rs. 10
CMP = 207 rupees (09-Mar)

Hence, some prelim stats would be :
Dividend yield = 1.09%
NCAV = (19.40) rupees per share
EPS = 16.23
P/E = 12.75 (based on LY numbers)

The last 4 quarters have gone extremely well for the company. The CARE ratings are at AA which shows very low credit risks on it's papers. And with estimated profits for FY 2007 at 295 crs, the 4 qtr trailing P/E will amount to just 5.33.

Noticeably, there is value in the company on the investments front. Investments of 175 crs, can be neatly labeled as -
> current invt (in MFs primarily) : 121 crs
> long term MFs (closed ended) : 35 crs
> other investments : 19 crs

... other investments : represent shares in various companies with the top 3 holdings in -
1. Century Textiles - 1807660 shares @ 52.1 (actual CMP = 553.0)
2. Birla Ericsson Optical - 938515 shares @ 50.0 (actual CMP = 19.4)
3. Universal Cables - 468000 shares @ 22.8 (actual CMP = 95.5)

Net net, value worth Rs. 106.2 crs was stated as 15.1 crs --- a difference of 91.1 crs.

I am particularly impressed (or maybe not, discerning to the lack of management vigour in managing leverage), the debt recapitalisation of this company would come to a massive 854 crs ... which is 57% of current market capitalisation (which is quite monstrous for a company of this size).


The charting of the stock is enclosed. Birla Corporation is at it's lowest.

I expect a substantial rise in the stock's price (to around 370 rupees per share) over the next 12 months. A BUY candidate (i bought some shares yesterday)

Savita Chemicals

I purchased Savita Chemicals yesterday at 218 rupees.

I had last analysed this scrip in a post dated March 16th, 2006 (here). In almost an year, a lot has changed in the company.
1. The EPS is up from Rs. 33.71 per share to Rs. 42.79 per share. FY2006-07 estimated EPS is Rs. 45 per share
2. The shares have come down from a high of Rs. 525 on 15th Jan 2007 to Rs. 222 (9th Mar). After adjusting for the bonus shares issued in Jan '07 - the stock price have dropped by around 30% from peak.
3. Annual increase in sales avg. a strong 27% over the last 3 yrs. This yr, I expect Savita Chemicals to close at a sales figure of around 810 crs (+17% from LY)
4. Profits for FY07 will be around 60 crs (as compared to 37 crs for FY06)
5. The NCAV of the scrip is a healthy 74 rupees per share
6. The company gives a dividend yield of 5.6% which is one of the highest among all businesses

Enclosed is the charting of the scrip over the last 2 months (Jan 17th to Mar 13th 2007).


At a CMP of 222 rupees (9th Mar), Savita Chemical's P/E is 5.40 - way better than it's peers. The business is sound (active for over 45 years) and has a strong management. The scrip has tremendous value and is a BUY candidate.

And so it continues ...

I broke my 10 month sabbatical from investing with the purchase of 7 scrips today. Starting tomorrow, i'll post my analysis of company stocks based on principles of value investing, competitive advantage, rising & dawning industries and whatever relevant comes to mind. In the interim, you'll find my previous blog (small2big.blogspot.com) useful - to evaluate & critique my writings.

Hope you like the blog and please feel free to post your comments on them. I am available at shankarnath@gmail.com. I shall try to reply to your emails at the earliest.

Scrips bought today - Gujarat Alkalies, Hindalco, Bank of Baroda, Vardhman Textiles, Birla Corporation, Graphite India and Savita Chemicals. While 1 in 7 scrips declined today, Birla Corp (-2.23%) ... Savita Chemicals shot up by 6.58% today. I shall be having a post on each of these scrips soon.