MCDH hardly makes any money, yet has about Rs. 43 crores in investment. The major investments are in (annual report FY2007) :
70.2 lakh shares in Mangalore Chemicals & Fertilizers
3.2 lakh shares in UB Engineering
52.6 lakh shares in United Breweries Holdings
96.3 lakh shares in United Breweries
Interestingly, the stated price and market price of each scrip was miles apart ...
Mangalore Chemicals .............. cost per share = 5.03; CMP = 38.6
UB Engineering ........................ cost per share = 9.70; CMP = 160.0
United Breweries Holdings ..... cost per share = 54.00; CMP = 1123.0
United Breweries ..................... cost per share = 10.80; CMP = 299.0
There are some other investment in various banks etc. but these four scrips together valued at today's market price calls for about Rs. 911 crores of investments (as against the cost price of Rs. 42 crores). The market cap of McDowell Holdings itself is 425 crs, which is about 45% of the current value of the investments.
An number of institutions have made a killing buying and selling in the 200-300 rupee range. In time I have observed that a lot of holding companies do operate at a significant discount to it's NAV. The 911 crs of investments amounts to about 750 rupees per share. At 350 rupees a pop, we are looking at a discount of 56% to market value of investment. This is a bit too much ... traditionally I have seen a 35-40% discount. So there is still about 15% upside to work on ... which comes to about 105-100 rupees. Hence I'm raising the target to about 450 rupees in the next 4-5 months.
Monday, January 14, 2008
McDowell Holdings Limited
Bookmark this post: | 
|
Subscribe to:
Post Comments (Atom)
3 comments:
Hi Shankar,
As the markets have corrected a lot.It will be so nice if you come up with your value list.I remember the list that you came out with afetr the may crash in 2006.
Shankar please give it a thought.I rather we will be waiting for that coveted list.
Regards.
Amit
hi shankar,
A few investment comapanies have been advising investments in Mcdowell holdings, RaneHoldings, Forbes Gokak, Jindal Southwest.. all based on thier potential investment holdings..
The problem with these stocks are the sentiments in the market and the direct performance of the stocks they hold...
I like your investment analysis..its neat and smooth
cheers
Read your blog and post on MCdowell holdings and i am really interested in buying it.
What do you think of Mcdowell holdings at this price? I think it is more attractive than before especially when you look at the holdings it has.
Also, one question that i have is , why do holding companies trade at a discount to their actual value?
Post a Comment