Buy Indiabulls Real Estate For Target Rs. 85-88 - Religare Securities Ltd

Recommendation

Buy Indiabulls Real Estate Ltd At 79.50-80 For Target Rs. 85-88 and Stop Loss 77.50 CMP 80.75

Rationale:

In recent past, IBREALEST has witnessed sharp correction after a vertical rise from 45 to 110 levels. The ongoing correction halted near 50% retracement level of above mentioned up move. On Tuesday i.e. 5th Aug 2014, it has formed a rising three pattern (bullish candlestick pattern) on daily charts with noticeable rise in volumes. One can utilize this opportunity to initiate fresh long positions as per the given levels  (Trading period: 3-5 trading sessions)

F & O Trade / Strategy Recommendation For 6th Aug 2014

Buy  Dr. Reddy,s Laboratories Ltd Aug Futs 2760-2770 For Target Rs. 2855 and Stop Loss 2730 , CMP 2775

To Read Complete Report Click Here

Buy BHEL For Target Rs.250 - Angel Broking Pvt Ltd

Justification:
After surpassing a strong resistance zone of `202 – ` 208 during the month of May 2014, we witnessed a significant up move of more than 40% in very short span. This was followed by a ‘Time-wise’ as well as ‘Price-wise’ correction, which was important from the longer term perspective. Considering past 6 to 8 day’s movement, it seems that the stock has cemented its position around the strong support zone of daily ’89 EMA’, which coincides with the 61.8 % Fibonacci Retracement Level of the up move seen from `176.65 (low on May 05, 2014) to `291.50 (high on May 26, 2014). During the session, we are witnessing some early signs of revival as the prices managed to surpass its smaller degree (hourly chart) trading range of `231 to `223 along with substantial increase in volumes. Thus, we advise traders to buy this stock from current level to a decline up to `228 for a target of `250 in coming 2 – 3 weeks. The stop loss for this trade set up can be kept at `222.

Recommendation
Buy BHEL at 232 – 228 Target 250 Stop Loss 222

What is the difference between investing and trading ?

Courtesy :Investopedia

Investing and trading are two very different methods of attempting to profit in the financial markets. The goal of investing is to gradually build wealth over an extended period of time through the buying and holding  of a portfolio of stocks, baskets of stocks, mutual funds, bonds and other investment instruments. Investors often enhance their profits through compounding , or reinvesting any profits and dividends into additional shares of stock. Investments are often held for a period of years, or even decades, taking advantage of perks like interest, dividends and stock splits along the way. While markets inevitably fluctuate, investors will "ride out" the downtrends with the expectation that prices will rebound and any losses will eventually be recovered. Investors are typically more concerned with market fundamentals, such as Price Earning Ratios( P/E) and management forecasts.

Trading, on the other hand, involves the more frequent buying and selling of stock, commodities, or other instruments, with the goal of generating returns that outperform buy-and-hold investing. While investors may be content with a 10 to 15% annual return, traders might seek a 10% return each month. Trading profits are generated through buying at a lower price and selling at a higher price within a relatively short period of time. The reverse is also true: trading profits are made by selling at a higher price and buying to cover at a lower price (known as "Selling Short") to profit in falling markets. Where buy-and-hold investors wait out less profitable positions, traders must make profits (or take losses) within a specified period of time, and often use a protective stop loss order to automatically close out losing positions at a predetermined price level. Traders often employ technical analysis tools, such as moving averages and stochastic oscillators, to find high-probability trading setups.

 A trader's "style" refers to the time frame or holding period in which stocks, commodities or other trading instruments are bought and sold. Traders generally fall into one of four categories:

• Position Trader – positions are held from months to years
• Swing Trader – positions are held from days to weeks
• Day Trader – positions are held throughout the day only with no overnight positions
• Scalp Trader – positions are held for seconds to minutes with no overnight positions

Traders often choose their trading style based on factors including: account size, amount of time that can be dedicated to trading, level of trading experience, personality and risk tolerance. Both investors and traders seek profits through market participation. In general, investors seek larger returns over an extended period through buying and holding. Traders, by contrast, take advantage of both rising and falling markets to enter and exit positions over a shorter time frame, taking smaller, more frequent profits. 

Buy NMDC For Target Rs.220 - Motilal Oswal

Strong volume growth and stable pricing With surplus capacity, well positioned to meet domestic demand

*   Strong 15% volume growth likely in FY15:

NMDC has been targeting dispatches of ~35m tonnes (v/s our estimate of 34m tonnes) in FY15, subject to continued operations of Essar Steel’s slurry pipeline. The Chhattisgarh complex is likely to dispatch ~5m tonnes through the slurry pipeline and ~20m tonnes by rail and road. The Karnataka complex would deliver 10m-12m tonnes in FY15. The dispatches are on track so far and volumes for 1QFY15 are likely to be marginally above 8.5m tonnes.

*   Strong demand for NMDC’s iron ore fines despite oversupply in international market:

Demand for iron ore fines remains strong despite volatility in international prices. The June price hike on lumps had some impact on demand in the latter half of the month because of fall in domestic steel/sponge iron ore prices. Though no decision has been taken yet, there is a case for rollback of the June price hike for lumps.

*   Growth momentum to continue:

NMDC has a total production capacity of ~45m tonnes. Investments in doubling railway tracks between Chhattisgarh complex and Jagdalpur, and flood loading would improve the Chhattisgarh complex’s evacuation capacity in steps over 2-3 years. This would help NMDC to deliver at least 10% annual volume growth in the next 2-3 years.

*   Some delays in pellet plant and Kumarswamy conveyor:

The 1.2m tonnes pellet plant should start production from 1 October. Mechanization at the Kumarswamy mines is behind schedule and is now expected to be completed by December 2014. This, however, is not materially affecting deliveries due to use of alternative portable crusher and road transport.

*   Progress on steel project stepping up:

After Mr Narendra Kothari, ex-CEO of ISP Burnpur, SAIL, joined as CMD, and Mr AP Chaudhary, ex-CMD of RINL got involved as consultant, project work at the 3m tonne Nagarnar Steel Plant has sped up. The plant should start production by January 2017.

*   More growth drivers in pipeline:

NMDC expects to enhance its presence in other states through joint ventures with respective state mineral development corporations. In Jharkhand, it has received prospecting licenses for two iron ore blocks.

*   Well positioned to serve growing domestic demand:

We expect Indian steel demand and production to accelerate over the next five years. This would drive demand for iron ore. Given its surplus mining capacity, NMDC would be a key beneficiary. Maintain Buy.

To Read Complete Report Click Here

Returns generated so far

Dear Readers,

Since last few days, I have been sharing stock research reports from different institutions. I have picked some of the stocks based on market condition and momentum. 

It's time to review performance of the stocks and return generated within 1 month. Below image shows return generated so far. Keep holding for target and stay invested.

Happy Investing!!!

Importance of Free Cash Flows for Long Term Investors

Long-term investors in the stock market are betting that the future of companies today will be better than the present or at least as good. The basic idea is that profits drivestock prices and companies that can deliver consistent profits today and are in position to continue delivering profits are prime targets for long-term investors.

There are many keys to determining whether a company is a good long-term investment or not, but one of the most important is free cash flow.

Without sustained and strong free cash flow, it is difficult to see our company has a competitive advantage or is positioned to deliver profits over the long term. A competitive advantage, also called an economic moat, gives the company an edge going forward and makes it more difficult for competitors to eat into market share.

Many long-term investors insist that a company have a strong record of free cash flow before they will even consider further investigation.

Free cash flow is the cash left over after the company pays all its bills and invests in future growth. Companies may invest this cash in short-term investments or use it for research and development, acquisitions or other extraordinary expenses that are not normally included in day-to-day operating cost.

Free cash flow may seem like esoteric accounting jargon, but is really quite simple when you think about it. If you pay all your bills every month and fund your retirement account and any other investment programs you have and still have money left over you have free cash flow.

That extra cash is not committed to anything such as car payments or student loans or insurance. Because those all been taken care of already.

Most define free cash flow as operating cash flow minus capital expenses investments. Operating cash flow is the money generated from the business of the company, as opposed to funds derived from the sale of a subsidiary for example.

These numbers can be found on the company's statement of cash flows, although many financial websites report these numbers.

What should investors look for in terms of free cash flow and how should they measure its impact on the company?

One of most common ways to measure the strength of free cash flow is to look at it as a percentage of sales. If that percentage exceeds 5 to 7% of sales, then it is a good assumption that this company probably has a competitive advantage or economic moat.

Financially strong companies often have high operating margins and lower expenses than their competitors.

Free cash flow, like all other financial measures makes more sense when viewed in context. Compare it to other companies in its industry and look back to determine if the strong free cash flow has a history or is something new to the company.

Although there are many other factors to consider, a history of strong free cash flow is a good indication that the company probably has a competitive advantage and is worthy of a deeper dive into the other factors that determine whether it is in fact a good long-term investment bet.

Many long-term investors reject companies as investment candidate that do not have a history of strong free cash flow.

YOU CAN SUBSCRIBE TO FREE EMAIL UPDATES, SO THAT YOU DO NOT MISS OUT ANY ARTICLE THAT CAN BE VALUABLE TO YOU AND YOUR INVESTMENTS!!

Midcap Investment Ideas - Religare Securities Ltd

•  Indian markets have witnessed a strong rally so far this year, supported by strong FII inflows and stable currency. As a result, the key benchmark indices, Sensex and Nifty, posted decent gains and rose ~20% till date.

•  Though India’s macro fundamentals are weak but turning around, especially when compared with regional and Emerging Markets. Going ahead, we believe that the domestic economy will perform better and this uptrend is likely to continue.

•  The next major trigger for the market is the Union Budget for 2014-15. The Finance Minister, Arun Jaitley, will present the Union Budget on July 10th, 2014. Based on the expectations of upcoming Union Budget, market may see the stock/sector specific movement in the near term.

•  The progress of monsoon and rising crude oil prices (due to militant violence in Iraq) will remain the key macroeconomic worries for our domestic economy. However, we believe that quality midcap stocks with strong growth story and robust financial performance can still deliver better returns.

To Read Complete Report Click Here