Table of Contents

S.N o
1. 2. 3. 4. 5. ". '. ). 1.1 A&out t(e *ndu$try 1.2 A&out t(e *ndian Stock +arket. 1.3 A&out t(e %opic 1, 2 "

Title
Student Declaration... Certificate from Company Certificate from guide. Acknowledgement. !ecutive Summary #i$t of %a&le$ #i$t of C(art$. CHAPTER 1: INTRODUCTION..

Page No.
i ii iii iv v vi vii 1-3

-. 1,.

CHAPTER

: !ITERATURE RE"IE#.

33-3$ 3(-3) 3' 3' 3'

CHAPTER 3 : RESEARCH %ETHODO!O&' 3.1 .urpo$e of t(e $tudy.. 3.2 /&0ective of t(e $tudy... 3.3 Scope of t(e $tudy

3.4 1e$earc( met(odology.. 3' 3.5 1e$earc( De$ign. 3." Sample De$ign 3.' Source of Data 3.'.1 .rimary Source. 3.'.2 Secondary Source. 3.) %ool$ for Data Collection 3' 3' 3) 3) 3' 3'

11. CHAPTER * : ANA!'SIS + INTERPRETATION... 12. CHAPTER $ : -INDIN&S... 13. CHAPTER ( : RECO%%ENDATIONS + CONC!USION. 1ecommendation$ Conclu$ion$......

3,-*$ *(-*. *)-$/ 45,

0I0!IO&RAPH' 14. Anne!ure

$1-$ 52

STUDENT DEC!ARATION
%(i$ i$ to certify t(at t(e .ro0ect titled 1A st234 on e52it4 anal4sis 6it7 s8e9ial :efe:en9e to Sto9; Pi9;ing St:ategies< (ave &een completed under t(e guidance of 1=ani9a 0at7la< in t(e partial fulfillment of t(e re2uirement for t(e award of t(e degree of 3+a$ter in 4u$ine$$ Admini$tration5 from 31ukmini Devi *n$titute of Advanced Studie$6 7ew Del(i.5 %(i$ i$ an original work &y me.

Na>e of t7e st23ent: Co2:se: 0at97:

%a42:es7 Ti6a:i %0A /11-13

?Sign@

CERTI-ICATE -RO% THE &UIDE

%(i$ i$ to certify t(at t(e pro0ect titled 1A st234 on e52it4 anal4sis 6it7 s8e9ial :efe:en9e to Sto9; Pi9;ing St:ategies< i$ an academic work done &y 1%a42:es7 Ti6a:i< $u&mitted in t(e partial fulfillment of t(e re2uirement for t(e award of t(e degree of 3+a$ter$ in 4u$ine$$ Admini$tration5 from 31ukmini Devi *n$titute of Advanced Studie$6 7ew Del(i.5 under my guidance and direction. %o t(e &e$t of my knowledge and &elief t(e data and information pre$ented &y (im in t(e pro0ect (a$ not &een $u&mitted earlier el$ew(ere.

Na>e A =ani9a 0at7la ?P:oBe9t &2i3e@ RDIAS

AC=NO#!ED&E%ENT
* offer my $incere t(ank$ and (um&le regard$ to 1ukmini Devi *n$titute /f Advanced Studie$6 88S*. 9niver$ity6 7ew Del(i for imparting u$ very valua&le profe$$ional training in +4A. * pay my gratitude and $incere regard$ to =ani9a 0at7la6 my pro0ect 8uide for giving me t(e cream of (i$ knowledge. * am t(ankful to (im a$ (e (a$ &een a con$tant $ource of advice6 motivation and in$piration. * am al$o t(ankful to (im for giving (i$ $ugge$tion$ and encouragement t(roug(out t(e pro0ect work. * take t(e opportunity to e!pre$$ my gratitude and t(ank$ to our computer #a& $taff and li&rary $taff for providing me opportunity to utili:e t(eir re$ource$ for t(e completion of t(e pro0ect. * am al$o t(ankful to my family and friend$ for con$tantly motivating me to complete t(e pro0ect and providing me an environment w(ic( en(anced my knowledge.

Na>e of t7e st23ent: Co2:se: 0at97:

%a42:es7 Ti6a:i %0A /11-13

?Sign@

ECECUTI"E SU%%AR'
%(e pro0ect titled 3A $tudy on e2uity analy$i$ wit( $pecial reference to Stock .icking Strategie$5 (a$ &een completed after an in;dept( analy$i$ of *nve$tor$ perception and market reaction$. *n t(i$ pro0ect *ndian <inancial Sy$tem (a$ &een $tudied6 in w(ic( &ot( t(e organi:ed and unorgani:ed $ector$ (ave &een e!plored. %(e pro0ect cover$ financial $y$tem covering <inancial *n$titution$ =vi:. 1egulatory6 <inancial *ntermediarie$6 7on *ntermediarie$>6 organi:ed and unorgani:ed <inancial +arket$6 <inancial *n$trument$ and <inancial Service$. #egi$lation$ pa$$ed &y t(e 14* 1elating to <oreign *nve$tment$ and t(eir implication$ were clo$ely e!amined. 8uideline$ &y t(e 14* pertaining to Commodity <uture$ %rading were look forward in order to reali:e variou$ tool$ and procedure$ to ad(ere federal agencie$. Security !c(ange &oard of *ndia =S 4*> and it$ Capital market$ operation$ were di$cu$$ed including S 4*?$ <unction$ and it$ o&0ective$. 8uideline$ &y S 4* for Commodity <uture$ trading (ave &een under$tood in order to pur$ue $ucce$$ful and et(ical future$ trading in commodity market. %(e pro0ect include$@

+o$t of t(e $trategie$ di$cu$$ed in t(i$ pro0ect u$e t(e tool$ and tec(ni2ue$ of fundamental analy$i$6 w(o$e main o&0ective i$ to find t(e wort( of a company6 or it$ intrin$ic value.

*n 2uantitative analy$i$6 a company i$ wort( t(e $um of it$ di$counted ca$( flow$. *n ot(er word$6 it i$ wort( all of it$ future profit$ added toget(er. Some 2ualitative factor$ affecting t(e value of a company are it$ management6 &u$ine$$ model6 indu$try and &rand name. Aalue inve$tor$6 concerned wit( t(e pre$ent6 look for $tock$ $elling at a price t(at i$ lower t(an t(e e$timated wort( of t(e company6 a$ reflected &y it$ fundamental$. 8rowt( inve$tor$ are concerned wit( t(e future6 &uying companie$ t(at may &e trading (ig(er t(an

t(eir intrin$ic wort( &ut $(ow t(e potential to grow and one day e!ceed t(eir current valuation$.

%(e 8A1. $trategy i$ a com&ination of &ot( growt( and value@ inve$tor$ concerned wit( Bgrowt( at a rea$ona&le priceB look for companie$ t(at are $omew(at undervalued given t(eir growt( potential.

*ncome inve$tor$6 $eeking a $teady $tream of income from t(eir $tock$6 look for $olid companie$ t(at pay a (ig( &ut $u$taina&le dividend yield.

!ist of Tables
Table No.
1.1 1.2 1.3 4.1 4.2 4.3 4.4 4.5 Ca$( <low 1e$idual Aalue Ci$torical arning$ Cindalco %a&le 7C.C %a&le 4rook$ #a&oratorie$ %a&le 7**% %a&le 4a0a0 Colding$ %a&le 13 1* $ */ *1 * *3 **

Na>e of t7e Table

Page No.

!ist of C7a:ts

C7a:t No.
1.1 4.1

Na>e of t7e C7a:t

*ndian <inancial Sy$tem Stock$ <inancial$

Page No.
2 45

CHAPTER 1 INTRODUCTION

1.1

A0OUT THE INDUSTR'

%(e *ndian financial $y$tem con$i$t$ of many in$titution$6 in$trument$ and market$. <inancial in$trument$ range from t(e common coin$6 currency note$ and c(e2ue$6 to t(e more e!otic future$ $wap$ of (ig( finance.

%(e *ndian <inancial Sy$tem

/rgani:ed $ector

9n;/rgani:ed Sector <inancial Service$ <inancial *n$titution $ <inancial *n$trument $ +oney #ender$ #and #ord$ .awn 4roker$ *ndigenou$ 4anker$

<inancial +arket$

/t(er$

7on; *ntermediarie$ Diarie$

*ntermediarie$

1egulatory

%rader$

?1.1@ In3ian -inan9ial S4ste> %(e *ndian financial $y$tem i$ &roadly cla$$ified into 2 &road 8roup$@; 1. /rgani:ed Sector 2. 9norgani:ed Sector 1. O:ganiDe3 Se9to: %(e organi:ed $ector con$i$t$ of@ ; I@ -inan9ial Instit2tions a@ Reg2lato:4 %(e regulatory in$titution$ are t(e one$6 w(ic( form t(e regulation$6 and control t(e *ndian financial $y$tem. %(e 1e$erve 4ank of *ndia i$ t(e regulatory &ody6 w(ic( regulate$6 guide$ control$ and promote$ t(e *<S. b@ -inan9ial Inte:>e3ia:ies %(ey are t(e intermediarie$ w(o intermediate &etween t(e $aver and inve$tor$. %(ey lend money a$ well mo&ili:e$ $aving$D t(eir lia&ilitie$ are toward$ ultimate $aver$6 w(ile t(eir a$$et$ are from t(e inve$tor$ or &orrower$. %(ey can &e furt(er cla$$ified into@ 0an;ing All &anking in$titution$ are intermediarie$. Non-0an;ing

Some 7on;4anking in$titution$ al$o act a$ intermediarie$6 and w(en t(ey do $o t(ey are known a$ 7on; 4anking <inancial *ntermediarie$.9%*6 #*C6 8*C E 7A4A1D are $ome of t(e 74<C?$ in *ndia. 9@ Non Inte:>e3ia:ies 7on;intermediarie$ in$titution$ do t(e loan &u$ine$$ &ut t(eir re$ource$ are not directly o&tained from t(e $aver. II. -inan9ial %a:;ets <inancial +arket$ are t(e center$ or arrangement$ t(at provide facilitie$ for &uying E $elling of financial claim$ and $ervice$. <inancial market$ can &e cla$$ified into@ ; O:ganiDe3 >a:;ets %(e$e market$ compri$e of corporation$6 financial in$titution$6 individual$ and government$ w(o trade in t(e$e market$ eit(er directly or indirectly t(roug( &roker$ on organi:ed e!c(ange$ or office$. Uno:ganiDe3 >a:;ets %(e financial tran$action$6 w(ic( take place out$ide t(e well;e$ta&li$(ed e!c(ange$ or wit(out $y$tematic and orderly $tructure or arrangement$ con$titute$ t(e unorgani:ed market$. %(ey generally refer to t(e market$ in t(e village$. III. -inan9ial Inst:2>ents <inancial in$trument$ con$titute of $ecuritie$6 a$$et$ and claim$. <inancial $ecuritie$ are cla$$ified a$ primary and $econdary $ecuritie$. %(e primary $ecuritie$ are i$$ued &y t(e companie$ directly to t(e ultimate $aver$ a$ ordinary $(are$ and de&enture$6 w(ile t(e $econdary $ecuritie$ are i$$ued &y t(e financial intermediarie$ to t(e ultimate $aver$ a$ &ank depo$it$6 in$urance policie$ $o and on. I". -inan9ial Se:Ei9es

%(e term financial $ervice in a &road $en$e mean$ 3+o&ili:ing and allocating $aving$5. %(u$6 it can al$o &e offered a$ a proce$$ &y w(ic( fund$ are mo&ili:ed from a large num&er of $aver$ and make t(em availa&le to all t(o$e w(o are in need of it6 particularly to t(e corporate cu$tomer$. . T7e Uno:ganiDe3 Se9to: %(e unorgani:ed financial $y$tem compri$e$ of relatively le$$ controlled money lender$6 indigenou$ &anker$6 lending pawn &roker$6 land lord$6 trader$ etc. %(i$ part of t(e financial $y$tem i$ not directly controlled &y 14*. !egislations 8asse3 b4 t7e R0I Relating to -o:eign InEest>ents %(e 1e$erve 4ank of *ndia t(roug( it$ circular R0IF //*F3, A.P.Di: se:ies 9i:92la: no (*F-eb:2a:4 * //* (a$ introduced a $pecial $c(eme T7e !ibe:aliDe3 Re>ittan9e $c(eme of 9SD 256,,, =per year> for 1e$ident individual$. T7e i>8li9ations of t7is legislation 1e$ident *ndian$ can now freely inve$t in any over$ea$ tran$actionD t(i$ open$ t(e entire gamut of t(e *ndian *nve$tment $cenario to over$ea$ in$trument$ like fore! market$6 fore! derivative$6 inde! future$6 commodity future and option$ and all ot(er alternative inve$tment$. %(e legi$lation would eventually lead to complete li&erali:ation in t(e area$ of over$ea$ inve$tment$.

1.1.1 SECURITIES AND ECCHAN&E 0OARD O- INDIA ?SE0I@ S 4* wa$ $etup in April 126 1-)). %o $tart wit(6 S 4* wa$ $et up a$ a non;$tatutory &ody. *t took 4 year$ for t(e government to &ring a&out a $eparate legi$lation in t(e name of $ecuritie$ and e!c(ange &oard of *ndia Act6 1--26 conferring $tatutory power$ over practically all a$pect$ of capital market operation$. ObBe9tiEes of SE0I %o protect t(e intere$t of inve$tor$ $o t(at t(ere i$ a $teady flow of $aving$ into t(e capital market

%o regulate t(e $ecuritie$ market and en$ure fair practice$ &y t(e i$$uer$ of $ecuritie$6 $o t(at t(ey can rai$e re$ource$ at minimum co$t %o provide efficient $ervice$ &y &roker$6 merc(ant &anker$ and t(e ot(er intermediarie$6 $o t(at t(ey &ecome competitive and profe$$ional

-2n9tions of SE0I Sec 11 of t(e S 4* act $pecifie$ t(e function$ a$ follow$@; 1egulation of t(e $tock e!c(ange and $elf;regulatory organi:ation$ 1egi$tration and regulation of $tock &roker$6 $u&;&roker$6 regi$trar to all i$$ue6 merc(ant &anker$6 underwriter$6 portfolio manager$ and $uc( ot(er intermediarie$ w(o are a$$ociated wit( $ecuritie$ market 1egulation and regi$tration of t(e working of collective inve$tment $c(eme$ including +utual fund$ .ro(i&ition of fraudulent and unfair trade practice$ relating to $ecurity market .ro(i&it in$ider trading in $ecuritie$

1. A0OUT THE INDIAN STOC= %AR=ET

+ark %wain once divided t(e world into two kind$ of people@ t(o$e w(o (ave $een t(e famou$ *ndian monument6 t(e %a0 +a(al6 and t(o$e w(o (avenBt. %(e $ame could &e $aid a&out inve$tor$. %(ere are two kind$ of inve$tor$@ t(o$e w(o know a&out t(e inve$tment opportunitie$ in *ndia and t(o$e w(o donBt. *ndia may look like a $mall dot to $omeone in t(e 9.S.6 &ut upon clo$er in$pection6 you will find t(e $ame t(ing$ you would e!pect from any promi$ing market. Cere weBll provide an overview of t(e *ndian $tock market and (ow intere$ted inve$tor$ can gain e!po$ure. T7e 0SE an3 NSE +o$t of t(e trading in t(e *ndian $tock market take$ place on it$ two $tock e!c(ange$@ t(e 4om&ay Stock !c(ange =4S > and t(e 7ational Stock !c(ange =7S >. %(e 4S (a$ &een in e!i$tence $ince 1)'5. %(e 7S 6 on t(e ot(er (and6 wa$ founded in 1--2 and $tarted trading in 1--4. Cowever6 &ot( e!c(ange$ follow t(e $ame trading mec(ani$m6 trading (our$6 $ettlement proce$$6 etc. At t(e la$t count6 t(e 4S (ad a&out 46',, li$ted firm$6 w(erea$ t(e rival 7S (ad

a&out 162,,. /ut of all t(e li$ted firm$ on t(e 4S 6 only a&out 5,, firm$ con$titute more t(an -,F of it$ market capitali:ationD t(e re$t of t(e crowd con$i$t$ of (ig(ly illi2uid $(are$. Almo$t all t(e $ignificant firm$ of *ndia are li$ted on &ot( t(e e!c(ange$. 7S en0oy$ a dominant $(are in $pot trading6 wit( a&out ',F of t(e market $(are6 a$ of 2,,-6 and almo$t a complete monopoly in derivative$ trading6 wit( a&out a -)F $(are in t(i$ market6 al$o a$ of 2,,-. 4ot( e!c(ange$ compete for t(e order flow t(at lead$ to reduced co$t$6 market efficiency and innovation. %(e pre$ence of ar&itrageur$ keep$ t(e price$ on t(e two $tock e!c(ange$ wit(in a very tig(t range. T:a3ing %e97anis> %rading at &ot( t(e e!c(ange$ take$ place t(roug( an open electronic limit order &ook6 in w(ic( order matc(ing i$ done &y t(e trading computer. %(ere are no market maker$ or $peciali$t$ and t(e entire proce$$ i$ order;driven6 w(ic( mean$ t(at market order$ placed &y inve$tor$ are automatically matc(ed wit( t(e &e$t limit order$. A$ a re$ult6 &uyer$ and $eller$ remain anonymou$. %(e advantage of an order driven market i$ t(at it &ring$ more tran$parency6 &y di$playing all &uy and $ell order$ in t(e trading $y$tem. Cowever6 in t(e a&$ence of market maker$6 t(ere i$ no guarantee t(at order$ will &e e!ecuted. All order$ in t(e trading $y$tem need to &e placed t(roug( &roker$6 many of w(ic( provide online trading facility to retail cu$tomer$. *n$titutional inve$tor$ can al$o take advantage of t(e direct market acce$$ =D+A> option6 in w(ic( t(ey u$e trading terminal$ provided &y &roker$ for placing order$ directly into t(e $tock market trading $y$tem. Settle>ent C49le an3 T:a3ing Ho2:s 2uity $pot market$ follow a %G2 rolling $ettlement. %(i$ mean$ t(at any trade taking place on +onday6 get$ $ettled &y Hedne$day. All trading on $tock e!c(ange$ take$ place &etween -@55 am and 3@3, pm6 *ndian Standard %ime =G 5.5 (our$ 8+%>6 +onday t(roug( <riday. Delivery of $(are$ mu$t &e made in demateriali:ed form6 and eac( e!c(ange (a$ it$ own clearing (ou$e6 w(ic( a$$ume$ all $ettlement ri$k6 &y $erving a$ a central counterparty. %a:;et In3eGes

%(e two prominent *ndian market inde!e$ are Sen$e! and 7ifty. Sen$e! i$ t(e olde$t market inde! for e2uitie$D it include$ $(are$ of 3, firm$ li$ted on t(e 4S 6 w(ic( repre$ent a&out 45F of t(e inde!B$ free;float market capitali:ation. *t wa$ created in 1-)" and provide$ time $erie$ data from April 1-'-6 onward. Anot(er inde! i$ t(e SE. C7I 7iftyD it include$ 5, $(are$ li$ted on t(e 7S 6 w(ic( repre$ent a&out "2F of it$ free;float market capitali:ation. *t wa$ created in 1--" and provide$ time $erie$ data from July 1--,6 onward.

%a:;et Reg2lation %(e overall re$pon$i&ility of development6 regulation and $upervi$ion of t(e $tock market re$t$ wit( t(e Securitie$ E !c(ange 4oard of *ndia =S 4*>6 w(ic( wa$ formed in 1--2 a$ an independent aut(ority. Since t(en6 S 4* (a$ con$i$tently tried to lay down market rule$ in line wit( t(e &e$t market practice$. *t en0oy$ va$t power$ of impo$ing penaltie$ on market participant$6 in ca$e of a &reac(. #7o Can InEest In In3iaH *ndia $tarted permitting out$ide inve$tment$ only in t(e 1--,$. <oreign inve$tment$ are cla$$ified into two categorie$@ foreign direct inve$tment =<D*> and foreign portfolio inve$tment =<.*>. All inve$tment$ in w(ic( an inve$tor take$ part in t(e day;to;day management and operation$ of t(e company6 are treated a$ <D*6 w(erea$ inve$tment$ in $(are$ wit(out any control over management and operation$6 are treated a$ <.*. <or making portfolio inve$tment in *ndia6 one $(ould &e regi$tered eit(er a$ a foreign in$titutional inve$tor =<**> or a$ one of t(e $u&;account$ of one of t(e regi$tered <**$. 4ot( regi$tration$ are granted &y t(e market regulator6 S 4*. <oreign in$titutional inve$tor$ mainly con$i$t of mutual fund$6 pen$ion fund$6 endowment$6 $overeign wealt( fund$6 in$urance companie$6 &ank$6 a$$et management companie$ etc. At pre$ent6 *ndia doe$ not allow foreign individual$ to inve$t directly into it$ $tock market. Cowever6 (ig(;net;wort( individual$ =t(o$e wit( a net wort( of at lea$t K9S5, million> can &e regi$tered a$ $u&;account$ of an <**.

<oreign in$titutional inve$tor$ and t(eir $u& account$ can inve$t directly into any of t(e $tock$ li$ted on any of t(e $tock e!c(ange$. +o$t portfolio inve$tment$ con$i$t of inve$tment in $ecuritie$ in t(e primary and $econdary market$6 including $(are$6 de&enture$ and warrant$ of companie$ li$ted or to &e li$ted on a recogni:ed $tock e!c(ange in *ndia. <**$ can al$o inve$t in unli$ted $ecuritie$ out$ide $tock e!c(ange$6 $u&0ect to approval of t(e price &y t(e 1e$erve 4ank of *ndia. <inally6 t(ey can inve$t in unit$ of mutual fund$ and derivative$ traded on any $tock e!c(ange. An <** regi$tered a$ a de&t;only <** can inve$t 1,,F of it$ inve$tment into de&t in$trument$. /t(er <**$ mu$t inve$t a minimum of ',F of t(eir inve$tment$ in e2uity. %(e &alance of 3,F can &e inve$ted in de&t. <**$ mu$t u$e $pecial non;re$ident rupee &ank account$6 in order to move money in and out of *ndia. %(e &alance$ (eld in $uc( an account can &e fully repatriated.

Rest:i9tionsFInEest>ent Ceilings %(e government of *ndia pre$cri&e$ t(e <D* limit and different ceiling$ (ave &een pre$cri&ed for different $ector$. /ver a period of time6 t(e government (a$ &een progre$$ively increa$ing t(e ceiling$. <D* ceiling$ mo$tly fall in t(e range of 2";1,,F. 4y default6 t(e ma!imum limit for portfolio inve$tment in a particular li$ted firm6 i$ decided &y t(e <D* limit pre$cri&ed for t(e $ector to w(ic( t(e firm &elong$. Cowever6 t(ere are two additional re$triction$ on portfolio inve$tment. <ir$t6 t(e aggregate limit of inve$tment &y all <**$6 inclu$ive of t(eir $u&;account$ in any particular firm6 (a$ &een fi!ed at 24F of t(e paid;up capital. Cowever6 t(e $ame can &e rai$ed up to t(e $ector cap6 wit( t(e approval of t(e companyB$ &oard$ and $(are(older$. Secondly6 inve$tment &y any $ingle <** in any particular firm $(ould not e!ceed 1,F of t(e paid; up capital of t(e company. 1egulation$ permit a $eparate 1,F ceiling on inve$tment for eac( of t(e $u&;account$ of an <**6 in any particular firm. Cowever6 in ca$e of foreign corporation$ or individual$ inve$ting a$ a $u&;account6 t(e $ame ceiling i$ only 5F. 1egulation$ al$o impo$e limit$ for inve$tment in e2uity;&a$ed derivative$ trading on $tock e!c(ange$. T7e 0otto> !ine merging market$ like *ndia6 are fa$t &ecoming engine$ for future growt(. Currently6 only a very low percentage of t(e (ou$e(old $aving$ of *ndian$ are inve$ted in t(e dome$tic $tock market6 &ut

wit( 8D. growing at ';)F annually and a $ta&le financial market6 we mig(t $ee more money 0oining t(e race. +ay&e itB$ t(e rig(t time for out$ide inve$tor$ to $eriou$ly t(ink a&out 0oining t(e *ndia &andwagon.

1.3 A0OUT THE TOPIC

H(en it come$ to per$onal finance and t(e accumulation of wealt(6 few $u&0ect$ are more talked a&out t(an $tock$. *tB$ ea$y to under$tand w(y@ playing t(e $tock market i$ t(rilling. 4ut on t(i$ financial roller;coa$ter ride6 we all want to e!perience t(e up$ wit(out t(e down$. 4efore e!ploring t(e va$t world of $tock;picking met(odologie$6 we $(ould addre$$ a few mi$conception$. +any inve$tor$ new to t(e $tock;picking $cene &elieve t(at t(ere i$ $ome infalli&le $trategy t(at6 once followed6 will guarantee $ucce$$. There is no foolproof system for picking stocks! %(i$ doe$nBt mean you canBt e!pand your wealt( t(roug( t(e $tock market. *tB$ 0u$t &etter to t(ink of $tock;picking a$ an art rat(er t(an a $cience. %(ere are a few rea$on$ for t(i$@

1. So many factor$ affect a companyB$ (ealt( t(at it i$ nearly impo$$i&le to con$truct a formula t(at will predict $ucce$$. *t i$ one t(ing to a$$em&le data t(at you can work wit(6 &ut 2uite anot(er to determine w(ic( num&er$ are relevant. 2. A lot of information i$ intangi&le and cannot &e mea$ured. %(e 2uantifia&le a$pect$ of a company6 $uc( a$ profit$6 are ea$y enoug( to find. 4ut (ow do you mea$ure t(e 2ualitative factor$6 $uc( a$ t(e companyB$ $taff6 it$ competitive advantage$6 it$ reputation and $o onL %(i$ com&ination of tangi&le and intangi&le a$pect$ make$ picking $tock$ a (ig(ly $u&0ective6 even intuitive proce$$. 3. 4ecau$e of t(e (uman =often irrational> element in(erent in t(e force$ t(at move t(e $tock market6 $tock$ do not alway$ do w(at you anticipate t(eyBll do. motion$ can c(ange 2uickly and unpredicta&ly. And unfortunately6 w(en confidence turn$ into fear6 t(e $tock market can &e a dangerou$ place. %(e &ottom line i$ t(at t(ere i$ no one way to pick $tock$. 4etter to t(ink of every $tock $trategy a$ not(ing more t(an an application of a t(eory ; a M&e$t gue$$M of (ow to inve$t. And $ometime$ two $eemingly oppo$ed t(eorie$ can &e $ucce$$ful at t(e $ame time. .er(ap$ 0u$t a$ important a$ con$idering t(eory6 i$ determining (ow well an inve$tment $trategy fit$ your per$onal outlook6 time frame6 ri$k tolerance and t(e amount of time you want to devote to inve$ting and picking $tock$. At t(i$ point6 you may &e a$king your$elf w(y $tock;picking i$ $o important. H(y worry $o muc( a&out itL H(y $pend (our$ doing itL %(e an$wer i$ $imple@ wealt(. *f you &ecome a good $tock; picker6 you can increa$e your per$onal wealt( e!ponentially. %ake +icro$oft6 for e!ample. Cad you inve$ted in 4ill 8ate$B &rainc(ild at it$ *./ &ack in 1-)" and $imply (eld t(at inve$tment6 your return would (ave &een $omew(ere in t(e neig(&or(ood of 356,,,F &y $pring of 2,,4. *n ot(er word$6 over an 1);year period6 a K1,6,,, inve$tment would (ave turned it$elf into a cool K3.5 millionN =*n fact6 (ad you (ad t(i$ fore$ig(t in t(e &ull market of t(e late B-,$6 your return could (ave &een even greater.> Hit( return$ like t(i$6 itB$ no wonder t(at inve$tor$ continue to (unt for Mt(e ne!t +icro$oftM. Hit(out furt(er ado6 letB$ $tart &y delving into one of t(e mo$t &a$ic and crucial a$pect$ of $tock; picking@ fundamental analy$i$6 w(o$e t(eory underlie$ all of t(e $trategie$ we e!plore =wit( t(e e!ception of t(e la$t $ection on tec(nical analy$i$>. Alt(oug( t(ere are many difference$ &etween

eac( $trategy6 t(ey all come down to finding t(e wort( of a company. Oeep t(i$ in mind a$ we move forward. 1.3.1 Sto9;-Pi9;ing St:ategies: -2n3a>ental Anal4sis ver (ear $omeone $ay t(at a company (a$ M$trong fundamental$ML %(e p(ra$e i$ $o overu$ed t(at itB$ &ecome $omew(at of a clic(P. Any analy$t can refer to a companyB$ fundamental$ wit(out actually $aying anyt(ing meaningful. So (ere * define e!actly w(at fundamental$ are6 (ow and w(y t(ey are analy:ed6 and w(y fundamental analy$i$ i$ often a great $tarting point to picking good companie$. T7e T7eo:4 Doing &a$ic fundamental valuation i$ 2uite $traig(tforwardD all it take$ i$ a little time and energy. %(e goal of analy:ing a companyB$ fundamental$ i$ to find a $tockB$ intrin$ic value6 a fancy term for w(at you &elieve a $tock i$ really wort( ; a$ oppo$ed to t(e value at w(ic( it i$ &eing traded in t(e marketplace. *f t(e intrin$ic value i$ more t(an t(e current $(are price6 your analy$i$ i$ $(owing t(at t(e $tock i$ wort( more t(an it$ price and t(at it make$ $en$e to &uy t(e $tock. Alt(oug( t(ere are many different met(od$ of finding t(e intrin$ic value6 t(e premi$e &e(ind all t(e $trategie$ i$ t(e $ame@ a company i$ wort( t(e $um of it$ di$counted ca$( flow$. *n plain ngli$(6 t(i$ mean$ t(at a company i$ wort( all of it$ future profit$ added toget(er. And t(e$e future profit$ mu$t &e di$counted to account for t(e time value of money6 t(at i$6 t(e force &y w(ic( t(e K1 you receive in a yearB$ time i$ wort( le$$ t(an K1 you receive today. %(e idea &e(ind intrin$ic value e2ualing future profit$ make$ $en$e if you t(ink a&out (ow a &u$ine$$ provide$ value for it$ owner=$>. *f you (ave a $mall &u$ine$$6 it$ wort( i$ t(e money you can take from t(e company year after year =not t(e growt( of t(e $tock>. And you can take $omet(ing out of t(e company only if you (ave $omet(ing left over after you pay for $upplie$ and $alarie$6 reinve$t in new e2uipment6 and $o on. A &u$ine$$ i$ all a&out profit$6 plain old revenue minu$ e!pen$e$ ; t(e &a$i$ of intrin$ic value. &:eate: -ool T7eo:4

/ne of t(e a$$umption$ of t(e di$counted ca$( flow t(eory i$ t(at people are rational6 t(at no&ody would &uy a &u$ine$$ for more t(an it$ future di$counted ca$( flow$. Since a $tock repre$ent$ owner$(ip in a company6 t(i$ a$$umption applie$ to t(e $tock market. 4ut w(y6 t(en6 do $tock$ e!(i&it $uc( volatile movement$L *t doe$nBt make $en$e for a $tockB$ price to fluctuate $o muc( w(en t(e intrin$ic value i$nBt c(anging &y t(e minute. %(e fact i$ t(at many people do not view $tock$ a$ a repre$entation of di$counted ca$( flow$6 &ut a$ trading ve(icle$. H(o care$ w(at t(e ca$( flow$ are if you can $ell t(e $tock to $ome&ody el$e for more t(an w(at you paid for itL Cynic$ of t(i$ approac( (ave la&eled it t(e greater fool t(eory6 $ince t(e profit on a trade i$ not determined &y a companyB$ value6 &ut a&out $peculating w(et(er you can $ell to $ome ot(er inve$tor =t(e fool>. /n t(e ot(er (and6 a trader would $ay t(at inve$tor$ relying $olely on fundamental$ are leaving t(em$elve$ at t(e mercy of t(e market in$tead of o&$erving it$ trend$ and tendencie$. %(i$ de&ate demon$trate$ t(e general difference &etween a tec(nical and fundamental inve$tor. A follower of tec(nical analy$i$ i$ guided not &y value6 &ut &y t(e trend$ in t(e market often repre$ented in c(art$. So6 w(ic( i$ &etter@ fundamental or tec(nicalL %(e an$wer i$ neit(er. A$ we mentioned in t(e introduction6 every $trategy (a$ it$ own merit$. *n general6 fundamental i$ t(oug(t of a$ a long;term $trategy6 w(ile tec(nical i$ u$ed more for $(ort;term $trategie$. =HeBll talk more a&out tec(nical analy$i$ and (ow it work$ in a later $ection.> P2tting T7eo:4 into P:a9ti9e %(e idea of di$counting ca$( flow$ $eem$ okay in t(eory6 &ut implementing it in real life i$ difficult. /ne of t(e mo$t o&viou$ c(allenge$ i$ determining (ow far into t(e future we $(ould foreca$t ca$( flow$. *tB$ (ard enoug( to predict ne!t yearB$ profit$6 $o (ow can we predict t(e cour$e of t(e ne!t 1, year$L H(at if a company goe$ out of &u$ine$$L H(at if a company $urvive$ for (undred$ of year$L All of t(e$e uncertaintie$ and po$$i&ilitie$ e!plain w(y t(ere are many different model$ devi$ed for di$counting ca$( flow$6 &ut none completely e$cape$ t(e complication$ po$ed &y t(e uncertainty of t(e future. #etB$ look at a $ample of a model u$ed to value a company. 4ecau$e t(i$ i$ a generali:ed e!ample6 donBt worry if $ome detail$ arenBt clear. %(e purpo$e i$ to demon$trate t(e &ridging &etween t(eory and application. %ake a look at (ow valuation &a$ed on fundamental$ would look@

Pa:t 1: P:e3i9t $ 'ea:s of Cas7 -lo6s .rior year ca$( flow 8rowt( rate Ca$( flow Di$count factor4 Di$count value per year5 Sum of .A of Ca$( flow

1 K1,, 15F K115 ,.-3 K1,"

2 K115 15F K132 ,.)" K113

3 K132 15F K152 ,.'K121

4 K152 15F K1'5 ,.'4 K12-

K1'5 15F K2,1 ,.") K13' K"," <igure$ in 9SD million K

?Table 1.1 Cas7 -lo6@ QDi$count rate )F Q8rowt( rate for fir$t 5year$ 15F Q8rowt( rate after 5year$ 5F

Pa:t : Resi32al "al2e Ca$( flow five year$ 8rowt( rate Ca$( flow in $i! year$ Capitali:ation rate =k;g> Aalue at t(e end of year 5 Di$count factor at t(e end of year 5 .A or re$idual value *ntrin$ic value of t(e company ?Table 1. Resi32al "al2es@

K2,1 5F K211.13F K'6,3-.'5 ,.") K4'-1.14 K53-'.1)

%(e pro&lem wit( pro0ecting far into t(e future i$ t(at we (ave to account for t(e different rate$ at w(ic( a company will grow a$ it enter$ different p(a$e$. %o get around t(i$ pro&lem6 t(i$ model (a$ two part$@ =1> determining t(e $um of t(e di$counted future ca$( flow$ from eac( of t(e ne!t five year$ =year$ one to five>6 and =2> determining Bre$idual valueB6 w(ic( i$ t(e $um of t(e future ca$( flow$ from t(e year$ $tarting $i! year$ from now.

*n t(i$ particular e!ample6 t(e company i$ a$$umed to grow at 15F a year for t(e fir$t five year$ and t(en 5F every year after t(at =year $i! and &eyond>. <ir$t6 we add toget(er all t(e fir$t five yearly ca$( flow$ ; eac( of w(ic( are di$counted to year :ero6 t(e pre$ent ; in order to determine t(e pre$ent value =.A>. So once t(e pre$ent value of t(e company for t(e fir$t five year$ i$ calculated6 we mu$t6 in t(e $econd $tage of t(e model6 determine t(e value of t(e ca$( flow$ coming from t(e $i!t( year and all t(e following year$6 w(en t(e companyB$ growt( rate i$ a$$umed to &e 5F. %(e ca$( flow$ from all t(e$e year$ are di$counted &ack to year five and added toget(er6 t(en di$counted to year :ero6 and finally com&ined wit( t(e .A of t(e ca$( flow$ from year$ one to five =w(ic( we calculated in t(e fir$t part of t(e model>. And voilRN He (ave an e$timate =given our a$$umption$> of t(e intrin$ic value of t(e company. An e$timate t(at i$ (ig(er t(an t(e current market capitali:ation indicate$ t(at it may &e a good &uy. 4elow6 we (ave gone t(roug( eac( component of t(e model wit( $pecific note$@ 1. .rior;year ca$( flow ; %(e t(eoretical amount6 or total profit$6 t(at t(e $(are(older$ could take from t(e company t(e previou$ year. 2. 8rowt( rate ; %(e rate at w(ic( ownerB$ earning$ are e!pected to grow for t(e ne!t five year$. 3. Ca$( flow ; %(e t(eoretical amount t(at $(are(older$ would get if all t(e companyB$ earning$6 or profit$6 were di$tri&uted to t(em. 4. Di$count factor ; %(e num&er t(at &ring$ t(e future ca$( flow$ &ack to year :ero. *n ot(er word$6 t(e factor u$ed to determine t(e ca$( flow$B pre$ent value =.A>. 5. Di$count per year ; %(e ca$( flow multiplied &y t(e di$count factor. ". Ca$( flow in year five ; %(e amount t(e company could di$tri&ute to $(are(older$ in year five. '. 8rowt( rate ; %(e growt( rate from year $i! into perpetuity. ). Ca$( flow in year $i! ; %(e amount availa&le in year $i! to di$tri&ute to $(are(older$. -. Capitali:ation 1ate ; %(e di$count rate =t(e denominator> in t(e formula for a con$tantly growing perpetuity. 1,. Aalue at t(e end of year five ; %(e value of t(e company in five year$. 11. Di$count factor at t(e end of year five ; %(e di$count factor t(at convert$ t(e value of t(e firm in year five into t(e pre$ent value. 12. .A of re$idual value ; %(e pre$ent value of t(e firm in year five.

So far6 weBve &een very general on w(at a ca$( flow compri$e$6 and unfortunately6 t(ere i$ no ea$y way to mea$ure it. %(e only natural ca$( flow from a pu&lic company to it$ $(are(older$ i$ a dividend6 and t(e dividend di$count model =DD+> value$ a company &a$ed on it$ future dividend$. Cowever6 a company doe$nBt pay out all of it$ profit$ in dividend$6 and many profita&le companie$ donBt pay dividend$ at all. H(at (appen$ in t(e$e $ituation$L /t(er valuation option$ include analy:ing net income6 free ca$( flow6 4*%DA and a $erie$ of ot(er financial mea$ure$. %(ere are advantage$ and di$advantage$ to u$ing any of t(e$e metric$ to get a glimp$e into a companyB$ intrin$ic value. %(e point i$ t(at w(at repre$ent$ ca$( flow depend$ on t(e $ituation. 1egardle$$ of w(at model i$ u$ed6 t(e t(eory &e(ind all of t(em i$ t(e $ame.

1.3. Sto9;-Pi9;ing St:ategies: I2alitatiEe Anal4sis

<undamental analy$i$ (a$ a very wide $cope. Aaluing a company involve$ not only crunc(ing num&er$ and predicting ca$( flow$ &ut al$o looking at t(e general6 more $u&0ective 2ualitie$ of a company. Cere we will look at (ow t(e analy$i$ of 2ualitative factor$ i$ u$ed for picking a $tock. %anage>ent %(e &ack&one of any $ucce$$ful company i$ $trong management. %(e people at t(e top ultimately make t(e $trategic deci$ion$ and t(erefore $erve a$ a crucial factor determining t(e fate of t(e company. %o a$$e$$ t(e $trengt( of management6 inve$tor$ can $imply a$k t(e $tandard five H$@ w(o6 w(ere6 w(at6 w(en and w(yL Who? Do $ome re$earc(6 and find out w(o i$ running t(e company. Among ot(er t(ing$6 you $(ould know w(o it$ C /6 C</6 C// and C*/ are. %(en you can move onto t(e ne!t 2ue$tion.

Where? Sou need to find out w(ere t(e$e people come from6 $pecifically6 t(eir educational and employment &ackground$. A$k your$elf if t(e$e &ackground$ make t(e people $uita&le for directing t(e company in it$ indu$try. A management team con$i$ting of people w(o come from completely unrelated indu$trie$ $(ould rai$e 2ue$tion$. *f t(e C / of a newly;formed mining company previou$ly worked in t(e indu$try6 a$k your$elf w(et(er (e or $(e (a$ t(e nece$$ary 2ualitie$ to lead a mining company to $ucce$$. What and When? H(at i$ t(e management p(ilo$op(yL *n ot(er word$6 in w(at $tyle do t(e$e people intend to manage t(e companyL Some manager$ are more per$ona&le6 promoting an open6 tran$parent and fle!i&le way of running t(e &u$ine$$. /t(er management p(ilo$op(ie$ are more rigid and le$$ adapta&le6 valuing policy and e$ta&li$(ed logic a&ove all in t(e deci$ion;making proce$$. Sou can di$cern t(e $tyle of management &y looking at it$ pa$t action$ or &y reading t(e annual reportB$ management6 di$cu$$ion E analy$i$ =+DEA> $ection. A$k your$elf if you agree wit( t(i$ p(ilo$op(y6 and if it work$ for t(e company6 given it$ $i:e and t(e nature of it$ &u$ine$$. /nce you know t(e $tyle of t(e manager$6 find out w(en t(i$ team took over t(e company. Jack Helc(6 for e!ample6 wa$ C / of 8eneral lectric for over 2, year$. Ci$ long tenure i$ a good indication t(at (e wa$ a $ucce$$ful and profita&le managerD ot(erwi$e6 t(e $(are(older$ and t(e &oard of director$ wouldnBt (ave kept (im around. *f a company i$ doing poorly6 one of t(e fir$t action$ taken i$ management re$tructuring6 w(ic( i$ a nice way of $aying Ma c(ange in management due to poor re$ult$M. *f you $ee a company continually c(anging manager$6 it may &e a $ign to inve$t el$ew(ere. At t(e $ame time6 alt(oug( re$tructuring i$ often &roug(t on &y poor management6 it doe$nBt automatically mean t(e company i$ doomed. <or e!ample6 C(ry$ler Corp wa$ on t(e &rink of &ankruptcy w(en #ee *acocca6 t(e new C /6 came in and in$talled a new management team t(at renewed C(ry$lerB$ $tatu$ a$ a ma0or player in t(e auto indu$try. So6 management re$tructuring may &e a po$itive $ign6 $(owing t(at a $truggling company i$ making effort$ to improve it$ outlook and i$ a&out to $ee a c(ange for t(e &etter. Why? A final factor to inve$tigate i$ w(y t(e$e people (ave &ecome manager$. #ook at t(e managerB$

employment (i$tory6 and try to $ee if t(e$e rea$on$ are clear. Doe$ t(i$ per$on (ave t(e 2ualitie$ you &elieve are needed to make $omeone a good manager for t(i$ companyL Ca$ $T(e &een (ired &ecau$e of pa$t $ucce$$e$ and ac(ievement$6 or (a$ $T(e ac2uired t(e po$ition t(roug( 2ue$tiona&le mean$6 $uc( a$ $elf;appointment after in(eriting t(e companyL =no6 #7at a Co>8an4 Does an3 Ho6 it %a;es %one4 A $econd important factor to con$ider w(en analy:ing a companyB$ 2ualitative factor$ i$ it$ product=$> or $ervice=$>. Cow doe$ t(i$ company make moneyL *n fancy +4A parlance6 t(e 2ue$tion would &e MH(at i$ t(e companyB$ &u$ine$$ modelLM Onowing (ow a companyB$ activitie$ will &e profita&le i$ fundamental to determining t(e wort( of an inve$tment. /ften6 people will &oa$t a&out (ow profita&le t(ey t(ink t(eir new $tock will &e6 &ut w(en you a$k t(em w(at t(e company doe$6 it $eem$ t(eir vi$ion for t(e future i$ a little &lurry@ MHell6 t(ey (ave t(i$ (ig(;tec( t(ingama&o& t(at doe$ $omet(ing wit( fi&er;optic ca&le.M *f you arenBt $ure (ow your company will make money6 you canBt really &e $ure t(at it$ $tock will &ring you a return. /ne of t(e &igge$t le$$on$ taug(t &y t(e dotcom &u$t of t(e late B-,$ i$ t(at not under$tanding a &u$ine$$ model can (ave dire con$e2uence$. +any people (ad no idea (ow t(e dotcom companie$ were making money6 or w(y t(ey were trading $o (ig(. *n fact6 t(e$e companie$ werenBt making any moneyD itB$ 0u$t t(at t(eir growt( potential wa$ t(oug(t to &e enormou$. %(i$ led to over:ealou$ &uying &a$ed on a (erd mentality6 w(ic( in turn led to a market cra$(. 4ut not everyone lo$t money w(en t(e &u&&le &ur$t@ Harren 4uffett didnBt inve$t in (ig(;tec( primarily &ecau$e (e didnBt under$tand it. Alt(oug( (e wa$ o$traci:ed for t(i$ during t(e &u&&le6 it $aved (im &illion$ of dollar$ in t(e en$uing dotcom fallout. Sou need a $olid under$tanding of (ow a company actually generate$ revenue in order to evaluate w(et(er management i$ making t(e rig(t deci$ion$. In32st:4FCo>8etition A$ide from (aving a general under$tanding of w(at a company doe$6 you $(ould analy:e t(e c(aracteri$tic$ of it$ indu$try6 $uc( a$ it$ growt( potential. A mediocre company in a great indu$try can provide a $olid return6 w(ile a mediocre company in a poor indu$try will likely take a &ite out of your portfolio. /f cour$e6 di$cerning a companyB$ $tage of growt( will involve appro!imation6 &ut common $en$e can go a long way@ itB$ not (ard to $ee t(at t(e growt(

pro$pect$ of a (ig(;tec( indu$try are greater t(an t(o$e of t(e railway indu$try. *tB$ 0u$t a matter of a$king your$elf if t(e demand for t(e indu$try i$ growing. +arket $(are i$ anot(er important factor. #ook at (ow +icro$oft t(oroug(ly dominate$ t(e market for operating $y$tem$. Anyone trying to enter t(i$ market face$ (uge o&$tacle$ &ecau$e +icro$oft can take advantage of economie$ of $cale. %(i$ doe$ not mean t(at a company in a near monopoly $ituation i$ guaranteed to remain on top6 &ut inve$ting in a company t(at trie$ to take on t(e M5,,;pound gorillaM i$ a ri$ky venture. 4arrier$ again$t entry into a market can al$o give a company a $ignificant 2ualitative advantage. Compare6 for in$tance6 t(e re$taurant indu$try to t(e automo&ile or p(armaceutical$ indu$trie$. Any&ody can open up a re$taurant &ecau$e t(e $kill level and capital re2uired are very low. %(e automo&ile and p(armaceutical$ indu$trie$6 on t(e ot(er (and6 (ave ma$$ive &arrier$ to entry@ large capital e!penditure$6 e!clu$ive di$tri&ution c(annel$6 government regulation6 patent$ and $o on. %(e (arder it i$ for competition to enter an indu$try6 t(e greater t(e advantage for e!i$ting firm$. 0:an3 Na>e A valua&le &rand reflect$ year$ of product development and marketing. %ake for e!ample t(e mo$t popular &rand name in t(e world@ Coca;Cola. +any e$timate t(at t(e intangi&le value of CokeB$ &rand name i$ in t(e &illion$ of dollar$N +a$$ive corporation$ $uc( a$ .rocter E 8am&le rely on (undred$ of popular &rand name$ like %ide6 .amper$ and Cead E S(oulder$. Caving a portfolio of &rand$ diver$ifie$ ri$k &ecau$e t(e good performance of one &rand can compen$ate for t(e underperformer$. Oeep in mind t(at $ome $tock;picker$ $teer clear of any company t(at i$ &randed around one individual. %(ey do $o &ecau$e6 if a company i$ tied too clo$ely to one per$on6 any &ad new$ regarding t(at per$on may (inder t(e companyB$ $(are performance even if t(e new$ (a$ not(ing to do wit( company operation$. A perfect e!ample of t(i$ i$ t(e trou&le$ faced &y +art(a Stewart /mnimedia a$ a re$ult of StewartB$ legal pro&lem$ in 2,,4. DonJt OEe:9o>8li9ate Sou donBt need a .(D in finance to recogni:e a good company. *n (i$ &ook "/ne 9p on Hall StreetM6 .eter #ync( di$cu$$e$ a time w(en (i$ wife drew (i$ attention to a great product wit( p(enomenal marketing. Cane$ wa$ te$t marketing a product called #Begg$@ womenB$ panty(o$e

packaged in colorful pla$tic egg $(ell$. *n$tead of $elling t(e$e in department or $pecialty $tore$6 Cane$ put t(e product ne!t to t(e candy &ar$6 $oda and gum at t(e c(eckout$ of $upermarket$ ; a &rilliant idea $ince re$earc( $(owed t(at women fre2uented t(e $upermarket a&out 12 time$ more often t(an t(e traditional outlet$ for panty(o$e. %(e product wa$ a (uge $ucce$$ and &ecame t(e $econd (ig(e$t;$elling con$umer product of t(e 1-',$. +o$t women at t(e time would (ave ea$ily $een t(e popularity of t(i$ product6 and #ync(B$ wife wa$ one of t(em. %(ank$ to (er advice6 (e re$earc(ed t(e company a little deeper and turned (i$ inve$tment in Cane$ into a $olid earner for <idelity6 w(ile mo$t of t(e male manager$ on Hall Street mi$$ed out. %(e point i$ t(at itB$ not only Hall Street analy$t$ w(o are privy to information a&out companie$D average everyday people can $ee $uc( wonder$ too. *f you $ee a local company e!panding and doing well6 dig a little deeper6 a$k around. H(o know$6 it may &e t(e ne!t Cane$. Con9l2sion A$$e$$ing a company from a 2ualitative $tandpoint and determining w(et(er you $(ould inve$t in it are a$ important a$ looking at $ale$ and earning$. %(i$ $trategy may &e one of t(e $imple$t6 &ut it i$ al$o one of t(e mo$t effective way$ to evaluate a potential inve$tment. 1.3.3 Sto9;-Pi9;ing St:ategies: "al2e InEesting

Aalue inve$ting i$ one of t(e &e$t known $tock;picking met(od$. *n t(e 1-3,$6 4en0amin 8ra(am and David Dodd6 finance profe$$or$ at Colum&ia 9niver$ity6 laid out w(at many con$ider to &e t(e framework for value inve$ting. %(e concept i$ actually very $imple@ find companie$ trading &elow t(eir in(erent wort(. %(e value inve$tor look$ for $tock$ wit( $trong fundamental$ including earning$6 dividend$6 &ook value6 and ca$( flow ; t(at are $elling at a &argain price6 given t(eir 2uality. %(e value inve$tor $eek$ companie$ t(at $eem to &e incorrectly valued =undervalued> &y t(e market and t(erefore (ave t(e potential to increa$e in $(are price w(en t(e market correct$ it$ error in valuation. "al2eK Not L2n;M 4efore we get too far into t(e di$cu$$ion of value inve$ting6 letB$ get one t(ing $traig(t. Aalue inve$ting doe$nBt mean 0u$t &uying any $tock t(at decline$ and t(erefore $eem$ Mc(eapM in price.

Aalue inve$tor$ (ave to do t(eir (omework and &e confident t(at t(ey are picking a company t(at i$ c(eap given it$ (ig( 2uality. *tB$ important to di$tingui$( t(e difference &etween a value company and a company t(at $imply (a$ a declining price. Say for t(e pa$t year Company A (a$ &een trading at a&out K25 per $(are &ut $uddenly drop$ to K1, per $(are. %(i$ doe$ not automatically mean t(at t(e company i$ $elling at a &argain. All we know i$ t(at t(e company i$ le$$ e!pen$ive now t(an it wa$ la$t year. %(e drop in price could &e a re$ult of t(e market re$ponding to a fundamental pro&lem in t(e company. %o &e a real &argain6 t(i$ company mu$t (ave fundamental$ (ealt(y enoug( to imply it i$ wort( more t(an K1, ; value inve$ting alway$ compare$ current $(are price to intrin$ic value not to (i$toric $(are price$. "al2e InEesting at #o:; /ne of t(e greate$t inve$tor$ of all time6 Harren 4uffett6 (a$ proven t(at value inve$ting can work@ (i$ value $trategy took t(e $tock of 4erk$(ire Cat(away6 (i$ (olding company6 from K12 a $(are in 1-"' to K',6-,, in 2,,2. %(e company &eat t(e SE. 5,,B$ performance &y a&out 13.,2F on average annuallyN Alt(oug( 4uffett doe$ not $trictly categori:e (im$elf a$ a value inve$tor6 many of (i$ mo$t $ucce$$ful inve$tment$ were made on t(e &a$i$ of value inve$ting principle$. 024ing a 02sinessK not a Sto9; He $(ould emp(a$i:e t(at t(e value inve$ting mentality $ee$ a $tock a$ t(e ve(icle &y w(ic( a per$on &ecome$ an owner of a company ; to a value inve$tor profit$ are made &y inve$ting in 2uality companie$6 not &y trading. 4ecau$e t(eir met(od i$ a&out determining t(e wort( of t(e underlying a$$et6 value inve$tor$ pay no mind to t(e e!ternal factor$ affecting a company6 $uc( a$ market volatility or day;to;day price fluctuation$. %(e$e factor$ are not in(erent to t(e company6 and t(erefore are not $een to (ave any effect on t(e value of t(e &u$ine$$ in t(e long run. Cont:a3i9tions H(ile t(e efficient market (ypot(e$i$ = +C> claim$ t(at price$ are alway$ reflecting all relevant information6 and t(erefore are already $(owing t(e intrin$ic wort( of companie$6 value inve$ting relie$ on a premi$e t(at oppo$e$ t(at t(eory. Aalue inve$tor$ &ank on t(e +C &eing true only in

$ome academic wonderland. %(ey look for time$ of inefficiency6 w(en t(e market a$$ign$ an incorrect price to a $tock. Aalue inve$tor$ al$o di$agree wit( t(e principle t(at (ig( &eta =al$o known a$ volatility6 or $tandard deviation> nece$$arily tran$late$ into a ri$ky inve$tment. A company wit( an intrin$ic value of K2, per $(are &ut i$ trading at K15 would &e6 a$ we know6 an attractive inve$tment to value inve$tor$. *f t(e $(are price dropped to K1, per $(are6 t(e company would e!perience an increa$e in &eta6 w(ic( conventionally repre$ent$ an increa$e in ri$k. *f6 (owever6 t(e value inve$tor $till maintained t(at t(e intrin$ic value wa$ K2, per $(are6 $T(e would $ee t(i$ declining price a$ an even &etter &argain. And t(e &etter t(e &argain6 t(e le$$er t(e ri$k. A (ig( &eta doe$ not $care off value inve$tor$. A$ long a$ t(ey are confident in t(eir intrin$ic valuation6 an increa$e in down$ide volatility may &e a good t(ing. S9:eening fo: "al2e Sto9;s 7ow t(at we (ave a $olid under$tanding of w(at value inve$ting i$ and w(at it i$ not6 letB$ get into $ome of t(e 2ualitie$ of value $tock$. Uualitative a$pect$ of value $tock$@ 1. Where are value stocks found? ; veryw(ere. Aalue $tock$ can &e found trading on t(e7SS 6 7a$da26 A+ I6 over t(e counter6 on t(e <%S 6 7ikkei and $o on. 2. a> In what industries are value stocks located? ; Aalue $tock$ can &e located in anyindu$try6 including energy6 finance and even tec(nology =contrary to popular &elief>. &> In what industries are value stocks most often located? ; Alt(oug( value $tock$ can &e located anyw(ere6 t(ey are often located in indu$trie$ t(at (ave recently fallen on (ard time$6 or are currently facing market overreaction to a piece of new$ affecting t(e indu$try in t(e $(ort term. <or e!ample6 t(e auto indu$tryB$ cyclical nature allow$ for period$ of undervaluation of companie$ $uc( a$ <ord or 8+. 3. Can value companies be those that have just reached new lows? ; Definitely6 alt(oug( we mu$t re;emp(a$i:e t(at t(e Mc(eapne$$M of a company i$ relative to intrin$ic value. A company t(at (a$ 0u$t (it a new 12;mont( low or i$ at (alf of a 12;mont( (ig( may warrant furt(er inve$tigation.

Cere i$ a &reakdown of $ome of t(e num&er$ value inve$tor$ u$e a$ roug( guide$ for picking $tock$. Oeep in mind t(at t(e$e are guideline$6 not (ard;and;fa$t rule$@ 1. S(are price $(ould &e no more t(an two;t(ird$ of intrin$ic wort(. 2. #ook at companie$ wit( .T ratio$ at t(e lowe$t 1,F of all e2uity $ecuritie$. 3. . 8 $(ould &e le$$ t(an one. 4. Stock price $(ould &e no more t(an tangi&le &ook value. 5. %(ere $(ould &e no more de&t t(an e2uity =i.e. DT ratio V 1>. ". Current a$$et$ $(ould &e two time$ current lia&ilitie$. '. Dividend yield $(ould &e at lea$t two;t(ird$ of t(e long;term AAA &ond yield. ). arning$ growt( $(ould &e at lea$t 'F per annum compounded over t(e la$t 1, year$.

T7e PFE an3 PE& Ratios Contrary to popular &elief6 value inve$ting i$ not $imply a&out inve$ting in low .T $tock$. *tB$ 0u$t t(at $tock$ w(ic( are undervalued will often reflect t(i$ undervaluation t(roug( a low .T ratio6 w(ic( $(ould $imply provide a way to compare companie$ wit(in t(e $ame indu$try. <or e!ample6 if t(e average .T of t(e tec(nology con$ulting indu$try i$ 2,6 a company trading in t(at indu$try at 15 time$ earning$ $(ould $ound $ome &ell$ in t(e (ead$ of value inve$tor$. Anot(er popular metric for valuing a companyB$ intrin$ic value i$ t(e . 8 ratio6 calculated a$ a $tockB$ .T ratio divided &y it$ pro0ected year;over;year earning$ growt( rate. *n ot(er word$6 t(e ratio mea$ure$ (ow c(eap t(e $tock i$ w(ile taking into account it$ earning$ growt(. *f t(e companyB$ . 8 ratio i$ le$$ t(an one6 it i$ con$idered to &e undervalued.

Na::o6ing It Do6n EEen -2:t7e: /ne well;known and accepted met(od of picking value $tock$ i$ t(e net;net met(od. %(i$ met(od $tate$ t(at if a company i$ trading at two;t(ird$ of it$ current a$$et$6 no ot(er gauge of wort( i$ nece$$ary. %(e rea$oning &e(ind t(i$ i$ $imple@ if a company i$ trading at t(i$ level6 t(e &uyer i$ e$$entially getting all t(e permanent a$$et$ of t(e company =including property6 e2uipment6 etc> and t(e companyB$ intangi&le a$$et$ =mainly goodwill6 in mo$t ca$e$> for freeN 9nfortunately6 companie$ trading t(i$ low are few and far &etween. T7e %a:gin of Safet4

A di$cu$$ion of value inve$ting would not &e complete wit(out mentioning t(e u$e of a margin of $afety6 a tec(ni2ue w(ic( i$ $imple yet very effective. Con$ider a real;life e!ample of a margin of $afety. Say youBre planning a pyrotec(nic$ $(ow6 w(ic( will include flame$ and e!plo$ion$. Sou (ave concluded wit( a (ig( degree of certainty t(at itB$ perfectly $afe to $tand 1,, feet from t(e center of t(e e!plo$ion$. 4ut to &e a&$olutely $ure no one get$ (urt6 you implement a margin of $afety &y $etting up &arrier$ 125 feet from t(e e!plo$ion$. %(i$ u$e of a margin of $afety work$ $imilarly in value inve$ting. *tB$ $imply t(e practice of leaving room for error in your calculation$ of intrin$ic value. A value inve$tor may &e fairly confident t(at a company (a$ an intrin$ic value of K3, per $(are. 4ut in ca$e (i$ or (er calculation$ are a little too optimi$tic6 (e or $(e create$ a margin of $afetyTerror &y u$ing t(e K2" per $(are in t(eir $cenario analy$i$. %(e inve$tor may find t(at at K15 t(e company i$ $till an attractive inve$tment6 or (e or $(e may find t(at at K246 t(e company i$ not attractive enoug(. *f t(e $tockB$ intrin$ic value i$ lower t(an t(e inve$tor e$timated6 t(e margin of $afety would (elp prevent t(i$ inve$tor from paying too muc( for t(e $tock. Con9l2sion Aalue inve$ting i$ not a$ $e!y a$ $ome ot(er $tyle$ of inve$tingD it relie$ on a $trict $creening proce$$. 4ut 0u$t remem&er6 t(ereB$ not(ing &oring a&out outperforming t(e SE. &y 13F over a 4,;year $panN

1.3.* Sto9;-Pi9;ing St:ategies: &:o6t7 InEesting

*n t(e late 1--,$6 w(en tec(nology companie$ were flouri$(ing6 growt( inve$ting tec(ni2ue$ yielded unprecedented return$ for inve$tor$. 4ut &efore any inve$tor 0ump$ onto t(e growt( inve$ting &andwagon6 $T(e $(ould reali:e t(at t(i$ $trategy come$ wit( $u&$tantial ri$k$ and i$ not for everyone. "al2e Ee:s2s &:o6t7 %(e &e$t way to define growt( inve$ting i$ to contra$t it to value inve$ting. Aalue inve$tor$ are $trictly concerned wit( t(e (ere and nowD t(ey look for $tock$ t(at6 at t(i$ moment6 are trading for

le$$ t(an t(eir apparent wort(. 8rowt( inve$tor$6 on t(e ot(er (and6 focu$ on t(e future potential of a company6 wit( muc( le$$ emp(a$i$ on it$ pre$ent price. 9nlike value inve$tor$6 growt( inve$tor$ &uy companie$ t(at are trading (ig(er t(an t(eir current intrin$ic wort( ; &ut t(i$ i$ done wit( t(e &elief t(at t(e companie$B intrin$ic wort( will grow and t(erefore e!ceed t(eir current valuation$. A$ t(e name $ugge$t$6 growt( $tock$ are companie$ t(at grow $u&$tantially fa$ter t(an ot(er$. 8rowt( inve$tor$ are t(erefore primarily concerned wit( young companie$. %(e t(eory i$ t(at growt( in earning$ andTor revenue$ will directly tran$late into an increa$e in t(e $tock price. %ypically a growt( inve$tor look$ for inve$tment$ in rapidly e!panding indu$trie$ e$pecially t(o$e related to new tec(nology. .rofit$ are reali:ed t(roug( capital gain$ and not dividend$ a$ nearly all growt( companie$ reinve$t t(eir earning$ and do not pay a dividend. No A2to>ati9 -o:>2la 8rowt( inve$tor$ are concerned wit( a companyB$ future growt( potential6 &ut t(ere i$ no a&$olute formula for evaluating t(i$ potential. very met(od of picking growt( $tock$ =or any ot(er type of $tock> re2uire$ $ome individual interpretation and 0udgment. 8rowt( inve$tor$ u$e certain met(od$ ; or $et$ of guideline$ or criteria ; a$ a framework for t(eir analy$i$6 &ut t(e$e met(od$ mu$t &e applied wit( a companyB$ particular $ituation in mind. +ore $pecifically6 t(e inve$tor mu$t con$ider t(e company in relation to it$ pa$t performance and it$ indu$tryB$ performance. %(e application of any one guideline or criterion may t(erefore c(ange from company to company and from indu$try to indu$try. T7e NAIC %(e 7ational A$$ociation of *nve$tor$ Corporation =7A*C> i$ one of t(e &e$t known organi:ation$ u$ing and teac(ing t(e growt( inve$ting $trategy. *t i$6 a$ it $ay$ on it$ we&$ite6 Mone &ig inve$tment clu&M w(o$e goal i$ to teac( inve$tor$ (ow to inve$t wi$ely. %(e 7A*C (a$ developed $ome &a$ic Muniver$alM guideline$ for finding po$$i&le growt( companie$ ; (ereB$ a look at $ome of t(e 2ue$tion$ t(e 7A*C $ugge$t$ you $(ould a$k w(en con$idering $tock$. 1. Strong istorical !arnings "rowth?

According to t(e 7A*C6 t(e fir$t 2ue$tion a growt( inve$tor $(ould a$k i$ w(et(er t(e company6 &a$ed on annual revenue6 (a$ &een growing in t(e pa$t. 4elow are roug( guideline$ for t(e rate

of .S growt( an inve$tor $(ould look for in companie$ of differing $i:e$6 w(ic( would indicate t(eir growt( inve$ting potential@

Co>8an4 SiDe W K44 W K4,,m W K44 V K4,,+

%ini>2> &:o6t7 in !ast $4ea:s 5F 'F 12F

?Table 1.3 Histo:i9al Ea:nings@

Alt(oug( t(e 7A*C $ugge$t$ t(at companie$ di$play t(i$ type of .S growt( in at lea$t t(e la$t five year$6 a 1,;year period of t(i$ growt( i$ even more attractive. %(e &a$ic idea i$ t(at if a company (a$ di$played good growt( =a$ defined &y t(e a&ove c(art> over t(e la$t five; or 1,;year period6 it i$ likely to continue doing $o in t(e ne!t five to 1, year$. #. Strong $orward !arnings "rowth? %(e $econd criterion $et out &y t(e 7A*C i$ a pro0ected five;year growt( rate of at lea$t 1,;12F6 alt(oug( 15F or more i$ ideal. %(e$e pro0ection$ are made &y analy$t$6 t(e company or ot(er credi&le $ource$. %(e &ig pro&lem wit( forward e$timate$ i$ t(at t(ey are e$timate$. H(en a growt( inve$tor $ee$ an ideal growt( pro0ection6 (e or $(e6 &efore tru$ting t(i$ pro0ection6 mu$t evaluate it$ credi&ility. %(i$ re2uire$ knowledge of t(e typical growt( rate$ for different $i:e$ of companie$. <or e!ample6 an e$ta&li$(ed large cap will not &e a&le to grow a$ 2uickly a$ a younger $mall;cap tec( company. Al$o6 w(en evaluating analy$t con$en$u$ e$timate$6 an inve$tor $(ould learn a&out t(e companyB$ indu$try ; $pecifically6 w(at it$ pro$pect$ are and w(at $tage of growt( it i$ at. %. Is &anagement Controlling Costs and 'evenues? %(e t(ird guideline $et out &y t(e 7A*C focu$e$ $pecifically on pre;ta! profit margin$. %(ere are many e!ample$ of companie$ wit( a$tounding growt( in $ale$ &ut le$$ t(an out$tanding gain$ in

earning$. Cig( annual revenue growt( i$ good6 &ut if .S (a$ not increa$ed proportionately6 itB$ likely due to a decrea$e in profit margin. 4y comparing a companyB$ pre$ent profit margin$ to it$ pa$t margin$ and it$ competitionB$ profit margin$6 a growt( inve$tor i$ a&le to gauge fairly accurately w(et(er or not management i$ controlling co$t$ and revenue$ and maintaining margin$. A good rule of t(um& i$ t(at if company e!ceed$ it$ previou$ five;year average of pre;ta! profit margin$ a$ well a$ t(o$e of it$ indu$try6 t(e company may &e a good growt( candidate. (. Can &anagement )perate the *usiness !fficiently? fficiency can &e 2uantified &y u$ing return on e2uity =1/ >. fficient u$e of a$$et$ $(ould &e reflected in a $ta&le or increa$ing 1/ . Again6 analy$i$ of t(i$ metric $(ould &e relative@ a companyB$ pre$ent 1/ i$ &e$t compared to t(e five;year average 1/ of t(e company and t(e indu$try. +. Can the Stock ,rice -ouble in $ive .ears? *f a $tock cannot reali$tically dou&le in five year$6 itB$ pro&a&ly not a growt( $tock. %(atB$ t(e general con$en$u$. %(i$ may $eem like an overly (ig(6 unreali$tic $tandard6 &ut remem&er t(at wit( a growt( rate of 1,F6 a $tockB$ price would dou&le in $even year$. So t(e rate growt( inve$tor$ are $eeking i$ 15F per annum6 w(ic( yield$ a dou&ling in price in five year$.

1.3.$ Sto9;-Pi9;ing St:ategies: &ARP InEesting

Do you feel t(at you now (ave a firm gra$p of t(e principle$ of &ot( value and growt( inve$tingL *f youBre comforta&le wit( t(e$e two $tock;picking met(odologie$6 t(en youBre ready to learn a&out a newer6 (y&rid $y$tem of $tock $election. Cere we take a look at growt( at a rea$ona&le price6 or 8A1.. #7at Is &ARPH

%(e 8A1. $trategy i$ a com&ination of &ot( value and growt( inve$ting@ it look$ for companie$ t(at are $omew(at undervalued and (ave $olid $u$taina&le growt( potential. %(e criteria w(ic( 8A1.er$ look for in a company fall rig(t in &etween t(o$e $oug(t &y t(e value and growt( inve$tor$.

#7at &ARP Is NOT 4ecau$e 8A1. &orrow$ principle$ from &ot( value and growt( inve$ting6 $ome mi$conception$ a&out t(e $tyle per$i$t. Critic$ of 8A1. claim it i$ a wi$(y;wa$(y6 fence;$itting met(od t(at fail$ to e$ta&li$( meaningful $tandard$ for di$tingui$(ing good $tock pick$. Cowever6 8A1. doe$nBt deem 0u$t any $tock a wort(y inve$tment. #ike mo$t re$pecta&le met(odologie$6 it aim$ to identify companie$ t(at di$play very $pecific c(aracteri$tic$. Anot(er mi$conception i$ t(at 8A1. inve$tor$ $imply (old a portfolio wit( e2ual amount$ of &ot( value and growt( $tock$. Again6 t(i$ i$ not t(e ca$e@ &ecau$e eac( of t(eir $tock pick$ mu$t meet a $et of $trict criteria6 8A1.er$ identify $tock$ on an individual &a$i$6 $electing $tock$ t(at (ave neit(er purely value nor purely growt( c(aracteri$tic$6 &ut a com&ination of t(e two. #7o Uses &ARPH /ne of t(e &igge$t $upporter$ of 8A1. i$ .eter #ync(6 w(o$e p(ilo$op(ie$ we (ave already touc(ed on in t(e $ection on 2ualitative analy$i$. #ync( (a$ written $everal popular &ook$6 including M/ne 9p on Hall StreetM and M#earn to arnM6 and in t(e late 1--,$ and early 2,,, (e $tarred in t(e <idelity *nve$tment commercial$. +any con$ider #ync( t(e worldB$ &e$t fund manager6 partly due to (i$ 2-F average annual return over a 13;year $tretc( from 1-'';1--,.

T7e H4b:i3 C7a:a9te:isti9s #ike growt( inve$tor$6 8A1. inve$tor$ are concerned wit( t(e growt( pro$pect$ of a company@ t(ey like to $ee po$itive earning$ num&er$ for t(e pa$t few year$6 coupled wit( po$itive earning$ pro0ection$ for upcoming year$. 4ut unlike t(eir growt(;inve$ting cou$in$6 8A1. inve$tor$ are $keptical of e!tremely (ig( growt( e$timation$6 $uc( a$ t(o$e in t(e 25;5,F range. Companie$ wit(in t(i$ range carry too muc( ri$k and unpredicta&ility for 8A1.er$. %o t(em6 a $afer and more reali$tic earning$ growt( rate lie$ $omew(ere &etween 1,;2,F.

Somet(ing el$e t(at 8A1.er$ and growt( inve$tor$ $(are i$ t(eir attention to t(e 1/ figure. <or &ot( inve$ting type$6 a (ig( and increa$ing 1/ relative to t(e indu$try average i$ an indication of a $uperior company. 8A1.er$ and growt( inve$tor$ $(are ot(er metric$ to determine growt( potential. %(ey do6 (owever6 (ave different idea$ a&out w(at t(e ideal level$ e!(i&ited &y t(e different metric$ $(ould &e6 and &ot( type$ of inve$tor$ (ave varying ta$te$ in w(at t(ey like to $ee in a company. An e!ample of w(at many 8A1.er$ like to $ee i$ po$itive ca$( flow or6 in $ome ca$e$6 po$itive earning$ momentum. 4ecau$e a variety of additional criteria can &e u$ed to evaluate growt(6 8A1. inve$tor$ can cu$tomi:e t(eir $tock;picking $y$tem to t(eir per$onal $tyle. !erci$ing $u&0ectivity i$ an in(erent part of u$ing 8A1.. So if you u$e t(i$ $trategy6 you mu$t analy:e companie$ in relation to t(eir uni2ue conte!t$ =0u$t a$ you would wit( growt( inve$ting>. Since t(ere i$ no magic formula for confirming growt( pro$pect$6 inve$tor$ mu$t rely on t(eir own interpretation of company performance and operating condition$. *t would &e (ard to di$cu$$ any $tock;picking $trategy wit(out mentioning it$ u$e of t(e .T ratio. Alt(oug( t(ey look for (ig(er .T ratio$ t(an value inve$tor$ do6 8A1.er$ are wary of t(e (ig( .T ratio$ favored &y growt( inve$tor$. A growt( inve$tor may inve$t in a company trading at 5, or ", time$ earning$6 &ut t(e 8A1. inve$tor $ee$ t(i$ type of inve$ting a$ paying too muc( money for too muc( uncertainty. %(e 8A1.er i$ more likely to pick companie$ wit( .T ratio$ in t(e 15;25 range ; (owever6 t(i$ i$ a roug( e$timate6 not an infle!i&le rule 8A1.er$ follow wit(out any regard for a companyB$ conte!t. *n addition to a preference for a lower .T ratio6 t(e 8A1. inve$tor $(are$ t(e value inve$torB$ attraction to a low price;to;&ook ratio =.T4> ratio6 $pecifically a .T4 of &elow indu$try average. A low .T and .T4 are t(e two more prominent criteria wit( w(ic( 8A1.er$ in part mirror value inve$ting. %(ey may u$e ot(er $imilar or differing criteria6 &ut t(e main idea i$ t(at a 8A1. inve$tor i$ concerned a&out pre$ent valuation$. 04 t7e N2>be:s

7ow t(at we know w(at 8A1. inve$ting i$6 letB$ delve into $ome of t(e num&er$ t(at 8A1.er$ look for in potential companie$.

/he ,!" 'atio %(e . 8 ratio may very well &e t(e mo$t important metric to any 8A1. inve$tor6 a$ it &a$ically gauge$ t(e &alance &etween a $tockB$ growt( potential and it$ value. 8A1. inve$tor$ re2uire a . 8 no (ig(er t(an 1 and6 in mo$t ca$e$6 clo$er to ,.5. A . 8 of le$$ t(an 1 implie$ t(at6 at pre$ent6 t(e $tockB$ price i$ lower t(an it $(ould &e given it$ earning$ growt(. %o t(e 8A1. inve$tor6 a . 8 &elow 1 indicate$ t(at a $tock i$ undervalued and warrant$ furt(er analy$i$. ,!" at Work Say t(e %SJ Sport$ Conglomerate6 a fictional company6 i$ trading at 1- time$ earning$ =.T X 1-> and (a$ earning$ growing at 3,F. <rom t(i$ you can calculate t(at t(e %SJ (a$ a . 8 of ,."3 =1-T3,X,."3>6 w(ic( i$ pretty good &y 8A1. $tandard$. &ARP at #o:; 4ecau$e a 8A1. $trategy employ$ principle$ from &ot( value and growt( inve$ting6 t(e return$ t(at 8A1.er$ $ee during certain market p(a$e$ are often different t(an t(e return$ $trictly value or growt( inve$tor$ would $ee at t(o$e time$. <or in$tance6 in a raging &ull market t(e return$ from a growt( $trategy are often un&eata&le@ in t(e dotcom &oom of t(e mid; to late;1--,$6 for e!ample6 neit(er t(e value inve$tor nor t(e 8A1.er could compete. Cowever6 w(en t(e market doe$ turn6 a 8A1.er i$ le$$ likely to $uffer t(an t(e growt( inve$tor. %(erefore6 t(e 8A1. $trategy not only fu$e$ growt( and value $tock;picking criteria6 &ut al$o e!perience$ a com&ination of t(eir type$ of return$@ a value inve$tor will do &etter in &eari$( condition$D a growt( inve$tor will do e!ceptionally well in a raging &ull marketD and a 8A1.er will &e rewarded wit( more con$i$tent and predicta&le return$. Con9l2sion 8A1. mig(t $ound like t(e perfect $trategy6 &ut com&ining growt( and value inve$ting i$nBt a$

ea$y a$ it $ound$. *f you donBt ma$ter &ot( $trategie$6 you could find your$elf &uying mediocre rat(er t(an good 8A1. $tock$. 4ut a$ many great inve$tor$ $uc( a$ .eter #ync( (im$elf (ave proven6 t(e return$ are definitely wort( t(e time it take$ to learn t(e 8A1. tec(ni2ue$.

1.3.( Sto9;-Pi9;ing St:ategies: In9o>e InEesting

*ncome inve$ting6 w(ic( aim$ to pick companie$ t(at provide a $teady $tream of income6 i$ per(ap$ one of t(e mo$t $traig(t forward $tock;picking $trategie$. H(en inve$tor$ t(ink of $teady income t(ey commonly t(ink of fi!ed;income $ecuritie$ $uc( a$ &ond$. Cowever6 $tock$ can al$o provide a $teady income &y paying a $olid dividend. Cere we look at t(e $trategy t(at focu$e$ on finding t(e$e kind$ of $tock$. #7o Pa4s DiEi3en3sH *ncome inve$tor$ u$ually end up focu$ing on older6 more e$ta&li$(ed firm$6 w(ic( (ave reac(ed a certain $i:e and are no longer a&le to $u$tain (ig(er level$ of growt(. %(e$e companie$ generally no longer are in rapidly e!panding indu$trie$ and $o in$tead of reinve$ting retained earning$ into t(em$elve$ =a$ many (ig(;flying growt( companie$ do>6 mature firm$ tend to pay out retained earning$ a$ dividend$ a$ a way to provide a return to t(eir $(are(older$. %(u$6 dividend$ are more prominent in certain indu$trie$. 9tility companie$6 for e!ample6 (ave (i$torically paid a fairly decent dividend6 and t(i$ trend $(ould continue in t(e future DiEi3en3 'iel3 *ncome inve$ting i$ not $imply a&out inve$ting in companie$ wit( t(e (ig(e$t dividend$ =in dollar figure$>. %(e more important gauge i$ t(e dividend yield6 calculated &y dividing t(e annual dividend per $(are &y $(are price. %(i$ mea$ure$ t(e actual return t(at a dividend give$ t(e owner of t(e $tock. <or e!ample6 a company wit( a $(are price of K1,, and a dividend of K" per $(are (a$ a "F dividend yield6 or "F return from dividend$. %(e average dividend yield for companie$ in t(e SE. 5,, i$ 2;3F.

4ut income inve$tor$ demand a muc( (ig(er yield t(an 2;3F. +o$t are looking for a minimum 5;"F yield6 w(ic( on a K1;million inve$tment would produce an income =&efore ta!e$> of K5,6,,,;K",6,,,. %(e driving principle &e(ind t(i$ $trategy i$ pro&a&ly &ecoming pretty clear@ find good companie$ wit( $u$taina&le (ig( dividend yield$ to receive a $teady and predicta&le $tream of money over t(e long term. Anot(er factor to con$ider wit( t(e dividend yield i$ a companyB$ pa$t dividend policy. *ncome inve$tor$ mu$t determine w(et(er a pro$pective company can continue wit( it$ dividend$. *f a company (a$ recently increa$ed it$ dividend6 &e $ure to analy:e t(at deci$ion. A large increa$e6 $ay from 1.5F to "F6 over a $(ort period $uc( a$ a year or two6 may turn out to &e over; optimi$tic and un$u$taina&le into t(e future. %(e longer t(e company (a$ &een paying a good dividend6 t(e more likely it will continue to do $o in t(e future. Companie$ t(at (ave (ad $teady dividend$ over t(e pa$t five6 1,6 156 or even 5, year$ are likely to continue t(e trend.

DiEi3en3s A:e Not EEe:4t7ing Sou $(ould never inve$t $olely on t(e &a$i$ of dividend$. Oeep in mind t(at (ig( dividend$ donBt automatically indicate a good company. 4ecau$e t(ey are paid out of a companyB$ net income6 (ig(er dividend$ will re$ult in a lower retained earning$. .ro&lem$ ari$e w(en t(e income t(at would (ave &een &etter re;inve$ted into t(e company goe$ to (ig( dividend$ in$tead. %(e income inve$ting $trategy i$ a&out more t(an u$ing a $tock $creener to find t(e companie$ wit( t(e (ig(e$t dividend yield. 4ecau$e t(e$e yield$ are only wort( $omet(ing if t(ey are $u$taina&le6 income inve$tor$ mu$t &e $ure to analy:e t(eir companie$ carefully6 &uying only one$ t(at (ave good fundamental$. #ike all ot(er $trategie$ di$cu$$ed in t(i$ tutorial6 t(e income inve$ting $trategy (a$ no $et formula for finding a good company. %o determine t(e $u$taina&ility of dividend$ &y mean$ of fundamental analy$i$6 eac( individual inve$tor mu$t u$e (i$ or (er own interpretive $kill$ and per$onal 0udgment ; for t(i$ rea$on6 we wonBt get into w(at define$ a Mgood companyM. Sto9; Pi9;ingK not -iGe3 In9o>e

Somet(ing to remem&er i$ t(at dividend$ do not e2ual lower ri$k. %(e ri$k a$$ociated wit( any e2uity $ecurity $till applie$ to t(o$e wit( (ig( dividend yield$6 alt(oug( t(e ri$k can &e minimi:ed &y picking $olid companie$. TaGes TaGes TaGes /ne final important note@ in mo$t countrie$ and $tate$Tprovince$6 dividend payment$ are ta!ed at t(e $ame rate a$ your wage$. A$ $uc(6 t(e$e payment$ tend to &e ta!ed (ig(er t(an capital gain$6 w(ic( i$ a factor t(at reduce$ your overall return.

CHAPTER !ITERATURE RE"IE#

.1 CAN S!I% CA7 S#*+ i$ a p(ilo$op(y of $creening6 purc(a$ing and $elling common $tock. Developed &y Hilliam /B7eil6 t(e co;founder of Investor's Business Daily6 it i$ de$cri&ed in (i$ (ig(ly recommended &ook MCow to +ake +oney in Stock$M. %(e name may $ugge$t $ome &oring government agency6 &ut t(i$ acronym actually $tand$ for a very $ucce$$ful inve$tment $trategy. H(at make$ CA7 S#*+ different i$ it$ attention to tangi&le$ $uc( a$ earning$6 a$ well a$ intangi&le$ like a companyB$ overall $trengt( and idea$. %(e &e$t t(ing a&out t(i$ $trategy i$ t(at t(ereB$ evidence t(at it work$@ t(ere are countle$$ e!ample$ of companie$ t(at6 over t(e la$t (alf of t(e 2,t( century6 met CA7 S#*+ criteria &efore increa$ing enormou$ly in price. *n t(i$ $ection we e!plore eac( of t(e $even component$ of t(e CA7 S#*+ $y$tem. C N C2::ent Ea:nings A N Ann2al Ea:nings N N Ne6

S N S288l4 an3 De>an3 ! N !ea3e: o: !agga:3 I N Instit2tional S8onso:s7i8 % N %a:;et Di:e9tion CA7 S#*+ maintain t(at t(e &e$t way to keep track of market condition$ i$ to watc( t(e daily volume$ and movement$ of t(e market$. %(i$ component of CA7 S#*+ may re2uire t(e u$e of $ome tec(nical analy$i$ tool$6 w(ic( are de$igned to (elp inve$tor$Ttrader$ di$cern trend$.

. Dogs of t7e Do6

%(e inve$ting $trategy w(ic( focu$e$ on Dog$ of t(e Dow wa$ populari:ed &y +ic(ael Ciggin$ in (i$ &ook6 M4eating t(e DowM. %(e $trategyB$ $implicity i$ one of it$ mo$t attractive attri&ute$. %(e Dog$ of t(e Dow are t(e 1, of t(e 3, companie$ in t(e Dow Jone$ *ndu$trial Average =DJ*A> wit( t(e (ig(e$t dividend yield. *n t(e Dog$ of t(e Dow $trategy6 t(e inve$tor $(uffle$ around (i$ or (er portfolio6 ad0u$ting it $o t(at it i$ alway$ e2ually allocated in eac( of t(e$e 1, $tock$. %ypically6 $uc( an inve$tor would need to completely rid (i$ or (er portfolio of a&out t(ree to four $tock$ every year and replace t(em wit( different one$. %(e $tock$ are u$ually replaced &ecau$e t(eir dividend yield$ (ave fallen out of t(e top 1,6 or occa$ionally6 &ecau$e t(ey (ave &een removed from t(e DJ*A altoget(er.

CHAPTER 3

RESEARCH %ETHODO!O&'

ObBe9tiEe of t7e St234 %o $tudy (ow to pick $tock$. %o e!plore t(e difference &etween good $tock$ and &ad $tock$ %o minimi:e t(e e!po$ure %o find out t(e entry and e!it point w(ile &uying a $tock

S2b ObBe9tiEes %o $tudy e2uitie$ li$ted on 7S S9o8e of St234 %(e $tudy will &oo$t up t(e confidence of inve$tor$ w(ile picking up t(e $tock$

%(e$e $trategie$ will (elp minimi:e t(e e!po$ure in t(e $tock market *nve$tor$ will &e a&le to ma!imi:e t(eir wealt( wit( t(e (elp of t(e$e $trategie$ Onowledge empowerment will (elp inve$tor$ moving toward$ inve$ting in t(e $tock market

Resea:97 Design De$criptive Y A$ variou$ te$t and $tock$ $creener$ (ave &een u$ed and t(e 1e$earc( follow t(e de$criptive re$earc( de$ign Sa>8le Design %(e $ample $i:e i$ 5 Companie$ li$ted on 7ational Stock !c(ange. So2:9e of Data .rimary Data C(art$ 7ew$ Announcement$ <inancial$ Annual 1eport$

Secondary data +oneycontrol.com 8oogle <inance %(omp$on 1euter$ Sa(oo finance 7ational Stock !c(ange

Tools fo: Data Colle9tion Computer a$$i$ted te$ting tool$ w(ic( te$t t(e competency of $tock$ Cypot(e$i$ te$ting for identifying t(e $tock picking 0udgment

Codified te$t$ to pick t(e data determinant to pick t(e rig(t $tock Stock$ $creener$ to $creen variou$ $tock$ li$ted on t(e $tock e!c(ange !pert$ recommendation$ (ave &een u$ed and evaluated +anagement report$ (ave &een looked up to developed inve$tor$ confidence

Anal4ses an3 Inte:8:etation %(e variou$ tool$ for analy$i$ u$ed are grap($6 c(art$6 percentage growt(6 and $econdary data. !i>itations an3 Const:ains Con$traint of time. #ack of re$ource$ Co$t Con$traint.

CHAPTER * ANA!'S'S AND INERPRETATION

St:ategi9 Sto9; Pi9;s

A$ per t(e $tudy6 algorit(m$ (ave &een developed and u$ing t(e algorit(m$ following five companie$ (ave &een picked from 7S . %(e$e companie$ are con$i$tent performer6 undervalued6 and are great organi:ation$ wit( $trong fundamental value$ and management $upport. %(e$e companie$ can &een con$idered a$ a great &et in long run. Hin3al9o In32st:ies !i>ite3

Cindalco *ndu$trie$ #imited i$ an integrated aluminum manufacturer. %(e Company mine$ &au!ite and refine$ it into alumina. %(e CompanyB$ ot(er operation$ include t(e $melting of alumina into aluminum6 t(e manufacture of $emi;fa&ricated rolled and e!truded product$. %(e CompanyB$ product$ include aluminum ingot$6 $teel rod$ and rolled flat $teel product$. C(airman@ =2>a: %angala> 0i:la +anaging Director@ De&narayan 4(attac(arya C(ief <inancial /fficer@ .raveen +a(e$(wari Net 8:ofit >a:gin ?O@ Total 3ebtFassets ?Re9ent 4:@ ?O@ C2::ent :atio PFE :atio $4 EPS g:o6t7 :ate Ret2:n on inEest>ent ?$ 4: aEg@ ?O@ DiE :e9ent 52a:te: P:i9e to boo; DiE 4iel3 ?O@ 0eta C2::ent P:i9e 12.34 ,."5 2.1' 5.3-.12F 32."5 ; .42 1.4"F 1.1-5.",

?Table *.1 Hin3al9o@ %(i$ $tock look$ great on paper$ and i$ undervalued *6 recommend to &uy t(e$e $tock to get good return$ in long term. NHPC !t3 7ational Cydroelectric .ower Corp #td. i$ a (ydro;power development company &a$ed in *ndia. %(e Company (a$ con$tructed appro!imately 11 (ydro;power pro0ect$ in *ndia and a&road wit( a total in$talled capacity of 2554.35 +H. C(airmanT +anaging Director@ & Sai P:asa3 Director %ec(nical@ D P 07a:gaEa

Net 8:ofit >a:gin ?O@ Total 3ebtFassets ?Re9ent 4:@ ?O@ C2::ent :atio

21.5" ,.43 1.1'

PFE :atio $4 EPS g:o6t7 :ate Ret2:n on inEest>ent ?$ 4: aEg@ ?O@ DiE :e9ent 52a:te: P:i9e to boo; DiE 4iel3 ?O@ 0eta C2::ent P:i9e

).31 15.12F 2).25 ; .-1 3.3""F 1.4" 2,.-, ?Table *. NHPC@

8rowt( rate of t(i$ $tock &eat$ many of t(e &lue c(ip companie$ (ence *6 recommend to &uy t(i$ $tock.

0:oo;s !abo:ato:ies !t3 ?0=!@

4rook$ #a&oratorie$ #imited i$ a re$earc( and development driven p(armaceutical manufacturing company. %(e Company i$ a contract manufacturing company for t(e late$t molecule$ in *n0ecta&le$ and Clavulanic Acid range in %a&let$ and Dry Syrup$. Atul 1anc(al D2:ga San;a: %ait4 A$(ima 4anod(a !ecutive E 7on *ndependent C(airman of t(e 4oard C(ief !ecutive /fficer6 !ecutive Director ; %ec(nical6 Director Compliance /fficer6 Company Secretary

Net 8:ofit >a:gin ?O@ Total 3ebtFassets ?Re9ent 4:@ ?O@ C2::ent :atio PFE :atio

13.4) ,.,, 3.,5 3.31

$4 EPS g:o6t7 :ate Ret2:n on inEest>ent ?$ 4: aEg@ ?O@ DiE :e9ent 52a:te: P:i9e to boo; DiE 4iel3 ?O@ 0eta C2::ent P:i9e

35.-'F 1-.41 ,.,, ,.3" ; ; 2,.3,

?Table *.3 0:oo;s !abo:ato:ies@ 8rowt( rate and profit margin of t(i$ $tock i$ e!ceptional w(ic( pampered me to pick t(i$ $tock. Al$o after dawn of *% $tock$ .(arma look$ good and * recommend &uying t(i$ $tock.

NIIT Te97nologies !i>ite3 7**% %ec(nologie$ #imited i$ an information tec(nology =*%> $olution$ organi:ation engaged in application development and maintenance6 managed $ervice$6 cloud computing and &u$ine$$ proce$$ out$ourcing to organi:ation$ in t(e financial $ervice$6 in$urance6 travel6 tran$portation and logi$tic$6 manufacturing and di$tri&ution and government $ector$. %(e Company deliver$ $ervice$ acro$$ continent$ directly and t(roug( it$ network of $u&$idiarie$. *t i$ $ervicing cu$tomer$ in 7ort( E Sout( America6 urope6 t(e +iddle a$t6 A$ia and Au$tralia.

1a0endra Sing( .awar A:Ein3 T7a;2: .rati&(a O. Advani Net 8:ofit >a:gin ?O@ Total 3ebtFassets ?Re9ent 4:@ ?O@ C2::ent :atio PFE :atio $4 EPS g:o6t7 :ate Ret2:n on inEest>ent ?$ 4: aEg@ ?O@ DiE :e9ent 52a:te: P:i9e to boo; DiE 4iel3 ?O@

!ecutive C(airman of t(e 4oard6 +anaging Director C(ief !ecutive /fficer6 Joint +anaging Director6 !ecutive Director C(ief <inancial /fficer 13.)4 3.-, 2.15 12.-" ).2)F 23.4' ' 1.)4 2.)5

0eta C2::ent P:i9e

1.12'".-, ?Table *.* NIIT Te97nologies@

1eturn on inve$tment of t(i$ $tock $tand$ e!ceptional in t(e indu$try (ence *6 recommend to &uy t(i$ $tock.

0aBaB Hol3ings + InEest>ent !i>ite3 ?0HI!@ 4a0a0 Colding$ E *nve$tment #imited =4C*#> i$ an inve$tment company. 4C*# i$ non;&anking financial company. A$ of +arc( 316 2,126 t(e Company (eld 31.4-F in 4a0a0 Auto #imited and 3-.15F in 4a0a0 <in$erv #imited. 4a0a0 Auto Colding$ #imited =4AC#> i$ a w(olly owned $u&$idiary of t(e Company. +a(ara$(tra Scooter$ #imited i$ a 0oint venture company promoted &y t(e Company and He$tern +a(ara$(tra Development Corporation #imited.

SanBiE 0aBaB Aallari 8upte 1a(ul Oumar 4a0a0

+anaging Director6 !ecutive Director Company Secretary 7on; !ecutive C(airman of t(e 4oard

Net 8:ofit >a:gin ?O@ Total 3ebtFassets ?Re9ent 4:@ ?O@ C2::ent :atio PFE :atio $4 EPS g:o6t7 :ate Ret2:n on inEest>ent ?$ 4: aEg@ ?O@ DiE :e9ent 52a:te: P:i9e to boo; DiE 4iel3 ?O@ 0eta C2::ent P:i9e

'3.15 ,.,, 3.22 5.55 4.1,F 2.25F , 1.15 2.') ,.)1 -,'.-5

?Table *.$ 0aBaB Hol3ings@

7et .rofit margin of 4a0a0 Colding i$ way a(ead t(an t(e market indice$ and t(e company di$play it$ po$ition w(ile delivering (ig( return in long term. * recommend &uying t(i$ $tock.

80 70 60 50 40 30 20 10 0
"i#idend $ield % Net profit margin % Total debt/ assets % Growt !ate %

?C7a:t *.1 Sto9;s -inan9ials@

CHAPTER $ -INDIN&S

-:o> t7e anal4sis >a3e in t7e 8:eEio2s 97a8te: t7e follo6ing fin3ings 9an be 3e:iEe3:

+arket *nformation6 7ew$ and 4u$ine$$ activitie$ play$ varia&le role$ in day to day fluctuation$ of t(e $tock price$. <or intraday trading new$ (ave immediate effect$ on price movement$ and efficient market (ypot(e$i$ (ave ma0or role in it.

+o$t of t(e companie$ are overvalued and are trading at a price w(ic( i$ 2;1, time$ of companie$ &ook value

*ndian *nve$tor$ are maintaining di$tance from t(e $tock market w(ile <**$ are pampered to influ! t(e money

/nly large companie$ pay$ t(e dividend$6 mid;cap and $mall;cap companie$ often reinve$t t(e profit

Company?$ $ale$ are directly proportional to t(e fluctuation in t(eir $tock price$6 a$ it tell$ a&out t(e competency of t(e company

<oreign market$ (ave immediate impact$ on *ndian $tock$. /ver an entire day $tock$ $(ow movement$ of 5, point$ up and down.

CHAPTER ( RECO%%ENDATIONS + CONC!USION

Re9o>>en3ations
+ore awarene$$ mu$t &e created &y marketing appropriately $o a$ to increa$e t(e intere$t of *ndian *nve$tor$ *f ta! &enefit$ are given6 t(i$ induce more people to inve$t in $tock market A$ capital market i$ growing $o one $(ould trade in e!c(ange traded market rat(er t(an t(e /%C market /ne $(ould take &etter po$ition wit( t(e (elp of fundamental and tec(nical analy$i$ *t i$ a nece$$ity t(at one mu$t &e very educated to inve$t in capital market. So6 it i$ recommended t(at t(o$e w(o are not $o well educated $(ould con$ult t(e profe$$ional

Con9l2sion
7ow a day?$ inve$tor$ &ecome more careful in inve$tment wit( con$idering t(e factor like glo&al economy6 inflation6 market $entiment$6 management etc. *n t(e trading $y$tem people con$ider a&ove factor for inve$tment $o we can conclude t(at inve$tor are more moving toward$ t(e e!c(ange traded market %(e trading $y$tem al$o include$ trading and intermediary participant$6 w(o en$ure t(e correct price di$covery. %(u$6 t(e trading $y$tem i$ one of t(e factor$6 w(ic( reduce t(e ri$k in commodity future$. *n t(e capital market variou$ ri$k are involved &ut (ere wit( t(e (elp of t(e fundamental and tec(nical analy$i$ inve$tor$ are reducing t(eir ri$k. %(i$ can &e emp(a$i:ed &y t(e fact t(at t(ere (a$ &een an increa$ing trend in t(e volume traded in mo$t of t(e e2uitie$. <rom all t(e a&ove conclu$ion$ of it can &e concluded6 3 2uitie$ can &e u$ed a$ a $ound inve$tment in$trument5

0I0!IO&RAPH'

AnneG2:e
0oo;s
Cull C Jo(n =1-'4>. Stock$ and e2uitie$. Ha$(ington6 D.C.@ 7ational <inance Society. Ao(ra 7. D. =1--2>. <uture$ and /ption$. %ata +cgraw Cill$ .u&lication$. Aol ** EA*** 7icol6 A. +.6 E .e!man6 .. +. =1--->. .re$enting your finding$@ A practical guide for creating wealt(. Searle$6 4.6 E #a$t6 +. =1-'->. A readerB$ guide to fundamental analy$i$. 7ew Sork@ <act$ on <ile6 *nc. %oomer6 J. =1-))>. Cane. d. Darwin %. %urner. 7ew Sork@ 7orton.

Lo2:nals
cluteonline.com/journals/index.php/IBER/article/download/3449/3496 www.ssmrae.com/admin/.../a8d27c43d9c 9e9286 !4a7494"673!c.pd

Hall Street Journal 6 dated 14t( +arc( 2,136 article no. '

+oney 7ow dated 11t( +arc( 2,136 article no. 11 % Journal$ dated 1't( <e&ruary 2,136 article no. 23 4loom&erg +oney dated 21$t marc( 2,136 article no. 4 Anirud( Set(i 1eport dated 1-t( marc( 2,136 article no. -

#ebsites
www.r&i.orgTpreZwatc($tock$indice$(tml www.$e&i.comT$tockZregi$teredZcompanyZwatc(Zmovement$.cm$ (ttp@TTwww.n$eindia.comTliveZmarketTdynaContentTliveZwatc(Te2uitie$Z$tockZwatc(.(tm (ttp@TTwww.moneycontrol.comTfinancial$ (ttp@TTeconomictime$.indiatime$.comTmarket$T$tock$T$tock$;in;new$Ttop;five;momentum; pick$;for;t(i$;weekTarticle$(owT1))-11,2.cm$