How to identify Bad Stocks | Stock you should Avoid - Lesson 6 | बुरे शेयर्स कैसे पहचानें? 

Thankyou! Keep learning!

Yes sir I saw to times then understood finally Tysm for that 😇🙏

@@pranjalkamra sir while explaining the effect of rights issue, u assumed the earnings of co. to be constant post the issue. However, co. has raised additional capital over which it will generate return. So that needs to be factored in!

@@pranjalkamra If the Rights are issued at discount, then you can sell them at market price after purchase and bag the discount given to you. Isn't that a good deal??? Please respond if there is a flaw in my theory. Ty.

@@romilpatel3083 right issue only for those who are existing share holder of the company

Great to hear!

hey brother, even i want to start learning, where should i start from??

@@adityabeniwal5736 1st episode to 9th one episode where you learn everything

Thankyou so much for your appreciation! Blessed to hear such a kind words!

Thank you so much for your words! Yes, we do have course for beginners, you can start with our free course, here is the link - learn.finology.in/courses/free

@@pranjalkamra Big respect for you brother. apart from beginner, Please do bring some advanced level courses to add a more value. By the way, Ticker is easy to understand unlike other website tools, simple yet amazing.. Soon will subscribe premium features.

@@pranjalkamra please check CFO / Pat for kirloskar and lovable stock

Really

શ

The CFO/PAT that is showing is calculated of 1 year and the method taught in this video is of 5 years and for Colgate Palmolive it is correct maybe because CFO/PAT is little to more stagnant across the whole time period of 5 years

Most welcome!

Glad you like them!

Hi ki ho

broo it would most probably be reverse i.e net profit be 4.5 times of cash flow....and also debt is a financial activity and cash flow is from operating...so debt can differ

Thanks Umang but please check Jain Irrigation.

3243.57operating cash flow jain irrigation 729.66 net income

Pranjal kamra good videos all.. Thanks.. Pls explain.. He is right.. I have personally checked with calculations... Jain irrigation is the share

@@shpatel7627 jab company net profit calculate krte ha toh usme se sare non cash expenses minus kr deti ha toh hume net profit kam lagta ha but reality me company ke pass se paise nhi jata ha isleye jain irrigation me operating cash flow jayda ha as comapred to net profit .

Many thanks!

Thankyou so much for your kind words!

@@pranjalkamra sir , U said in most of the cases rights issue is not good, but I want to know in which cases it is good nd how?

Me too

Mai purchase kar leta agar money hota too. Abb earn karunga part time phir purchase karunga.

Absolutely. I was thinking the same.

But it can go the other way too, right..? Like more money is equal to more risky investment and it can result it loss.

I was also thinking same 👍

I think it is in crore and website showing in lacks

Take care for PAT ie profit after tax, and profit befor tax

What is CFO and pat

@@gurmeetgurjar5182 CFO is Cash flow statement and PAT is Profit after tax. In cfo only cash related transactions are shown that to of current year no credit transactions whereas in P&L statement PAT is shown which also includes credit transactions and many more things like deprection, advance rent,advance salaries paid,etc hope it helped you and also, others can reply if want to add more valuble things.😀

It's not necessary for cash flow to be exactly same as PAT , it is fine even if PAT is 80-85% of cfo.Operating cash flow can be greater in some cases where Depreciation and amortization is more and due the difference of change in working capital.

Is greater CFO a good sign or a bad sign ? Like if the PAT is x and CFO is 2x then ?

@@sailakdhar8893 It's neither good nor bad ,cash flow is double than PAT means They have received cash either from past cycle receivables or must have got advance for the company's order ,whether the CFO is more or less we need to find the reason behind it ,in ideal situation they have to be same but it doesn't happen like that.

@@rohitdubey2281992 Ok I see. Great, that helped a lot. Thank You.

Enter when people are leaving a stock for no reason or the stock is at correct valuation exit only if company is going bankrupt or you need the money after booking some profit. Best is to stay invested for atleast 5-10 years.

Learn technical analysis to know the entry and exit and also for long term Investments

Teach us entry and exit sir-pranjal kamra

@@navigator665 very nice explanation in few words keep up the good deeds

PE =MPS÷EPS # Hm ek share k liye kitna jda paisa de rhe hai

@@rishabhsingh5751 Thanks Brother For ur reply but please kya aap 1st video mein check karke bataa sakte ho ki hul ki pe ratio is right or wrong 🙂

@@RiteshKumar-vt2ev Bro PE high hai actually HUL ka kyuki wo Overvalued company hai Market leader hai 0 debt hai and many more 15 ka PE is reasonable par HUL ka PE down isiliye nahi hoga kyuki koi use bechna nahi chahta

@@RiteshKumar-vt2ev industry k PE dekh lo aur ushe compare kro # peers comparision smj m aajeyega

@@rishikesh3590 Thanks for your reply Sir But my question is Hul ki pe ratio Video mein 70.18 hai but actually agar aap calculate karo toh vo 78 se bhi uper aa rahi hai 🙂 If you think I Can't understand till now so pls call me 76529-33579 because I new this field & I'm so happy to learn things 🙂

1)but current valuation and margin of safety change hoti hai , jis wajah se you have to be alert and be extra cautious with the company. 2)Company ko growth and profit badhana hai toh woh reserves(past profit) se badhayengi if the management is smart , if not unhe paise raise karne ke liye equity dilute karni pad rahi hai jaise Ravneet gill yes bank ke liye koshish kar rahe thhe so rights raise karna in a way equity dilute karna hua.

To company k owners apna khudka share market mein laye na usse beche Yaha jisne right issue liya uska risk high to rahega par agar company acha perform kar gayi.... to usko.... Right issue se pehle jitna profit/share fayada(profit) ho rha tha utna hi profit hoga. Par jo log ne right issue nhi liye unka loss hoga na... Kyu ki no. Of shares to increase ho gaye... Kyu ki koyi aur right issue le liya

Thankyou for the appreciation!

"sell stocks finally at a high price" Q) How does this happen? (Removing all the market activity/temporary ups and downs) Most possible scenario : company's earnings increases. EPS also increases What rights issue does is getting fresh equity capital but from the existing shareholders by offering new shares at a discounted price. In the video shown above, you can see that the company raised ₹2400 capital from the new rights issue. Earlier, the company's total Shareholders funds was ₹3000 and now it's ₹5400 (80% increase in equity capital). This will also mean an increase in the shares outstanding, depending on the price at which the rights was offered. I'm taking an example of ₹200 as the issue price with current market price being ₹300, Let's say this company had generating ₹300 profit last year with a ₹3000 crore equity capital (10% ROCE if debt is zero) and had 10 crore shares. EPS = 30 (₹300/10) Remember this: Now, due to the rights issue, number of shares outstanding will be equal to 20 crores (10 crore new shares offered at ₹200 + existing 10 crore shares at ₹300) This is all good until the new money is put into work and returns at least 80% higher profits than last year. What if the company fails in doing so? All the new money raised is NOT serving its purpose of maximizing the profits Let's say that the company's profits doesn't increase at all in the next year. EPS=15 (₹300/20). This is a major drop in EPS, from 30 to 15 (~50% reduction). ROCE will reduce dramatically to 6% (₹300/₹5400). Stock price should ideally tank by this many and this will also affect the existing Shareholders who didn't take part in the rights issue also. For the EPS to increase, co has to generate at least 100% plus profits next year. (i.e; 600 crore) which will make EPS as 30 (₹600/20), which same as before. Why will market reward a co which raised 80% fresh equity but only managed to generate the same EPS? So, the ideal growth in Profits in the next year should be above ₹690 crore signalling a 15% plus increase in EPS which will result in stock price going higher

@@vinaytm There are more chances that the company will make profit more than before issuing Rights by using the capital raised from selling shares at discounted price. By this the stock price has to increase due to positive sentiment of stockholders and the increase in stock price will hugely benefit people who participated in Rights by selling their stocks at high price which was bought at discounted price. I am talking about the scenario in which the stock has to be sold at high price, which has been purchased during Rights issue. Let the original number of stocks be with you.

@@rohitrathod8150 agreed. If & only if the company uses the new capital well and generates from profits than before without denting the ROCE, this rights issue can lead to a bargain in stock price but you know how company are run in India. Only a select few have a ROCE>20%, new capital infusion will further make the profit generation part a little more difficult. It all depends on the management capabilities & trustworthiness. Hence, I provided the above base case. If everything goes well, rights issue will be a bargain to existing shareholders, or else, it will be a disaster in the making

@@vinaytm 'if and only if the company uses the new capital well' If we are so negative about this company ideology then we would not have purchased the stock of the company. Rights issue can be a good way to raise capital(no external debt) so that the company can execute its plan, for example, buying some other company(can raise profit) or increasing the existing production rate by purchasing new equipments or paying debt(which will eradicate the interest payment). Also, it's good opportunity for the existing shareholders to buy the stocks at discounted price, I can't see any other way to do this.

@@rohitrathod8150 👍

You can exercise the rights if you want in that case. Stock market classes: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Hi-DLP1670w.html

It depends if lower and u trust the company then wait till the stock reached it last lower circuit ....and if upper then probably u will not get the shares ..as there will only buyers in the market...as much as i know ..plz take it as suggetion 🙏

the company which is hitting upper and lower circuit daily is not for investing for now i know you aretalking about irctc it has good monopoly but not the right price to buy let it correct more i will suggest you buy irctc at its around ipo price that will be worth it

R u talking bout IRCTC?

Analyse the candle bar and use technical analysis( moving average, exponential average, bolinger bands) Then u will able the earn profit

@@harshalsatlok-_-3258 No I'm not talking about IRCTC , its Simplex Infrastructure 😅

I have same doubt

He received the last year selling amount

Bcoz simran farms ko 2018 me jo paisa milne wala tha usse voh 2019 me mila isliye uska 2019 ka cash flow jyada ha

Kuch pta chala iska apko??

TTM matlab TRAIL twelve months u have eps 3m, 6m, 9m but u dont have exact eps of 12m before financial statement so it is calculated by analyst

Yes

Smart Move Bro

but market price bhi down ho jayegi kyonki eps kam ho gaya hai.

@@Name-iy3uz Haa bro par bol nahi sakte down hi hoga ya up hi jayega

par bhai do bol re down ho ha... kabhi toh uppar jye ga na