This stock pick has gone wrong for me ! (thankfully, it was not in my stock recommendations on this blog)
Eastern Silk today fell by 14.2% on the bourses. The reason : a Q4 loss of 15.63 crores (here). This follows 5 straight quarters of profits (18.40 crs, 15.46 crs, 19.02 crs, 21.18 crs, 25.52 crs).
What is scary is the drop in sales. From about 168 crores of sales last quarter, the sales have dropped to a mere Rs. 31.3 crores for this quarter.
I had bought Eastern Silk at 265 rupees a share. The current price is Rs. 179. The current PE is 3.48, BV is 211 rupees, EV/EBIT is just 2.8. (all three metrics are pretty encouraging)
What should be the next step ... does it make sense for me to wait .. or immediately sell off?
Thursday, April 24, 2008
Eastern Silk
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3 comments:
It does`nt make sense to leave. The company is reported to be in acquisition mode and a stock split is on the cards, if the grapevine has it right. the financials otherwise appear good. I think I would watch the volumes and perhaps buy in when the stock begins to move up or after looking to the annual results.
Regards
Bala Nair
Thanks Bala - although I am cautious in buying more. I can stand a drop in earnings, but feel jittery on a sales drop.
SBI Mid Cap Fund has accumulate shares in June ..
At present, it is trading below the book value .. and looks attractive ..
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