Friday, December 11, 2009

A Safe & Cheap company revisited

This post is related to my earlier call on ICC(Indian Card Clothing). I thought it was safe & cheap at 72.5/- per share and asked for your views. Since then, it has gone up to 142/- per share, close to 100% return. I think due to this rise in share price it has become overvalued. If you had bought it based on my theory (a highly unlikely case :)), please sell it. I too committed a mistake of double counting in the valuation, i.e. i did not subtract the non-operating earnings from my owner's earnings. Either they should have been subtracted or I shouldn't have excluded the investments on balance sheet from calculation of EV. Anyways, share price seems overvalued or at least fully valued to me. Remember share price can go higher from here but as i said in my first post, i look for undervalued companies, now ICC doesn't fit the bill.

I fully assure you that in future, this kind of mistakes wont be repeated.

2 comments:

  1. i never knew about ICC... pandeyji you forgot to notify earlier :-(

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  2. sorry buddy, i will keep u updated about my future posts, really sorry
    Ashish

    ReplyDelete