Safal Niveshaks Stock Analysis Excel
Safal Niveshaks Stock Analysis Excel
Safal Niveshaks Stock Analysis Excel
Warning!
Excel can be a wonderful tool to analyze the past. But it can be a weapon of mass destruction to predict the future! So be very careful of what you are getting into. Here, garbage in will always equal garbage out.
Remember!
Focus on decisions, not outcomes. Look for disconfirming evidence. Calculate. Pray!
Please! It's your money. Please don't blame me if results of this excel cause you to lose it all! I've designed this excel to aid your own thinking, but you alone are responsible for your actions. I want to live peacefully ever after! :-) I am not a sadist who wants you to do the hard work by analyzing companies on your own. But I'd rather give you a compass instead of a map, for you can confuse map with territory and lose it all! All the best!
ng evidence. Calculate.
It's your use you to lose it all! I've one are responsible for I am not a companies on your own. you can confuse map est!
Parameter
Conclusion
Never Forget
Explanation Seek out companies that have no or less competition, either due to a patent or brand name or similar intangible that makes the product unique. Such companies will typically have high gross and operating profit margins because of their unique niche. However, don't just go on margins as high margins may simply highlight companies within industries with traditionally high margins. Thus, look for companies with gross, operating and net profit margins above industry norms. Also Try to invest in industries where you possess some specialized knowledge (where you work) or can more effectively judge a company, its industry, and its competitive environment (simple products you consume). While it is difficult to construct a quantitative filter, you should be able to identify areas of interest. You should "only" consider analyzing those companies that operate in areas that you can clearly grasp - your circle of competence. Of course you can increase the size of the circle, but only over time by learning about new industries. More important than the size of Seeks out companies with conservative financing, which equates to a simple, safe balance sheet. Such companies tend to have strong cash flows, with little need for long-term debt. Look for low debt to equity or low debt-burden ratios. Also seek companies that have history of consistently Rising earnings serve as a good catalyst for stock prices. So seek companies with strong, consistent, and expanding earnings (profits). Seek companies with 5/10 year earnings per share growth greater than 25% (alongwith safe balance sheets). To help indicate that earnings growth is still strong, look for companies where the last 3-years earnings growth rate is higher than the last 10-years growth rate. More important than the rate of growth is the consistency in such growth. So exclude companies with volatile earnings growth in the past, even if the "average" growth has Like you should stock to your circle of competence, a company should invest its capital only in those businesses within its circle of competence. This is a difficult factor to screen for on a quantitative level. Before investing in a company, look at the companys past pattern of acquisitions and new directions. They should fit within the primary range of operations for the firm. Buffett prefers that firms reinvest their earnings within the company, provided that profitable opportunities exist. When companies have excess cash flow, Buffett favours shareholderenhancing maneuvers such as share buybacks. While we do not screen for this factor, a follow-up examination of a company would reveal if it has a share buyback plan in place. Seek companies where earnings have risen as retained earnings (earnings after paying dividends) have been employed profitably. A great way to screen for such companies is by looking at those that have had consistent earnings and strong return on equity in the past. Consider it a positive sign when a company is able to earn above-average (better than competitors) returns on equity without employing much debt. Average return on equity for Indian companies over the last 10 years is approximately 16%. Thus, seek companies that earn atleast That's what is called "pricing power". Companies with moat (as seen from other screening metrics as suggested above (like high ROE, high grow margins, low debt etc.) are able to adjust prices to inflation without the risk of losing significant volume sales.
Companies that consistently need capital to grow their sales and profits are like bank savings account, and thus bad for an investor's long term portfolio. Seek companies that don't need high capital investments consistently. Retained earnings must first go toward maintaining current operations at competitive levels, so the lower the amount needed to maintain current operations, the better. Here, more than just an absolute assessment, a comparison against competitors will Sensible investing is always about using folly and discipline - the discipline to identify excellent businesses, and wait for the folly of the market to drive down the value of these businesses to attractive levels. You will have little trouble understanding this philosophy. However, its successful implementation is dependent upon your dedication to learn and follow the principles, and apply Focus on decisions, not outcomes. Look for disconfirming evidence. Pray!
Balance Sheet
L-5 96 682 778 60 L-4 96 886 982 57 L-3 96 1,107 1,203 76 L-2 96 1,614 1,710 94 L-1 96 2,092 2,187 110 L 96 2,653 2,749 137
(38) 975 120 66 60 301 56 1,540 815 278 11 49 240 14 226 86 140 (1) 139 14.5 29 42 70
2 1,290 183 74 84 358 85 2,076 1,007 297 27 71 253 15 238 94 144 (3) 4 145 15.1 34 48 82
(61) 1,563 199 86 87 297 68 2,239 985 335 32 69 298 11 287 106 181 (7) 0 174 18.1 38 53 91
(10) 1,803 219 96 99 345 79 2,630 1,133 391 32 68 354 11 343 132 211 2 (1) 212 22.1 67 53 120
(70) 2,269 257 112 122 411 85 3,187 1,358 483 40 61 462 24 (8) 430 147 283 (2) (0) 281 29.3 115 10 125
count
L-4 4,407 L-3 5,464 L-2 6,681 L-1 7,722 L CAGR 9,632 20.4%
ells)
(36) 2,613 301 122 145 535 63 3,743 1,708 664 60 59 665 26 (7) 631 203 428 (19) 409 42.7 62 101 163
(27) 2,866 365 682 167 646 91 4,790 1,943 674 51 74 651 32 (1) 617 197 419 (22) 398 41.5 62 106 168
(102) 3,227 433 797 200 801 89 5,445 2,758 1,236 141 84 1,293 37 1 1,257 373 884 (48) 836 87.1 82 177 259
(151) 3,906 454 922 206 969 85 6,391 3,045 1,331 68 113 1,286 26 1,260 378 881 (38) 843 87.9 82 225 307
(173) 5,099 526 1,073 269 1,207 120 8,122 3,633 1,510 108 121 1,497 43 1,454 434 1,021 (32) 989 103.1 91 293 384
22.6%
23.0% 24.7%
24.4%
20.8%
MINUS
sh Flow Statement
L-6 179 (87) 92 (125) (42) 12 L-5 258 (82) 176 (109) (111) 38 L-4 480 (308) 172 (335) (134) 11 L-3 389 (310) 79 (270) (230) (111) L-2 1,063 (395) 668 (299) (332) 432 L-1 762 (156) 606 (440) (334) (12) L 826 (673) 153 (512) (327) (12)
Rememb
Remember!
Cash flow, not reported earnings, is what determines a company's long-term value.
Operational & Financial Ratios Diluted Earnings Per Share (Rs) Diluted Book Value Per Share (Rs) Tax Rate (%) Dividend Per Share (Rs) Dividend Pay Out Ratio (%) Profitability Ratios Gross Margin (%) EBITDA Margin (%) EBIT Margin (%) Net Profit Margin (%) Performance Ratios Return on Equity (%) Return on Capital Employed (%) Return on Invested Capital (%) Sales/Working Capital (x) Efficiency Ratios Receivable Days Inventory Days Payable Days Growth Ratios Net Sales Growth (%) EBITDA Growth (%) PBIT Growth (%) PAT Growth (%) Financial Stability Ratios Total Debt/Equity (x) Debt Burden (x) Current Ratio (x) Quick Ratio (x) Interest Cover (x)
L-9 14.5 49.8 38% 7.3 50% L-9 45% 15% 13% 8% L-9 29% 60% 24% 8.2 L-9 51 65 47 L-9
L-8 15.1 55.2 40% 8.5 56% L-8 42% 13% 11% 6% L-8 27% 70% 25% 12.4 L-8 41 49 42 L-8 31% 7% 6% 4% L-8 0.3 0.8 1.3 0.8 16.6
L-7 18.1 59.1 37% 9.5 52% L-7 38% 13% 12% 7% L-7 31% 52% 26% 7.8 L-7 42 64 42 L-7 8% 13% 18% 20% L-7 0.4 16.7 1.5 0.8 27.5
L-6 22.1 67.4 39% 12.5 57% L-6 38% 13% 12% 7% L-6 33% 49% 29% 7.3 L-6 42 59 40 L-6 17% 17% 19% 22% L-6 0.4 2.8 1.6 0.9 31.0
L-5 29.3 81.1 34% 13.0 44% L-5 37% 13% 13% 8% L-5 36% 66% 35% 8.6 L-5 42 59 45 L-5 21% 24% 30% 32% L-5 0.4 1.0 1.4 0.8 19.3
L-4 42.7 102.4 32% 17.0 40% L-4 39% 15% 15% 9% L-4 42% 93% 47% 9.9 L-4 38 59 47 L-4 20% 37% 44% 46% L-4 0.3 1.0 1.4 0.8 25.2
atios
L-3 41.5 125.4 32% 17.5 42% L-3 36% 12% 12% 7% L-3 33% 90% 34% 12.2 L-3 38 51 37 L-3 24% 1% -2% -3% L-3 0.3 1.9 1.2 0.9 20.0 L-2 87.1 178.3 30% 27.0 31% L-2 41% 18% 19% 13% L-2 49% 150% 70% 12.0 L-2 30 52 39 L-2 22% 83% 99% 110% L-2 0.1 0.2 1.2 0.9 35.2 L-1 87.9 228.0 30% 32.0 36% L-1 39% 17% 17% 11% L-1 39% 86% 67% 7.8 L-1 27 62 51 L-1 16% 8% -1% 1% L-1 0.1 0.2 1.5 0.8 49.5 L 103.1 286.5 30% 40.0 39% L 38% 16% 16% 10% L 36% 124% 53% 12.2 L 30 61 49 L 25% 13% 16% 17% L 0.1 1.0 1.3 0.7 34.5
e calculated figures)
Remember!
Wh counts in the long run is the increase in "pe share value", not overall growth or size of a business.
Remember!
Gross margins suggest pricing power. Higher Better, but also invites competition. So watch o for consistency.
Remember!
ROE = Efficiency in allocating capital, which is CEO's #1 job. Higher = Better. Look for consistency.
r!
What he long run is the increase in "per e", not overall growth or size of a business.
Remember!
ins suggest pricing power. Higher = so invites competition. So watch out for consistency.
Remember!
ency in allocating capital, which is a #1 job. Higher = Better. Look for consistency.
Why DCF?
The value of a business is simply the present value of cash that investors can take out of the business over its lifetime.
23,170 Projected price (Average P/E * EP 25,066 Total gain (Projected Price + Div
18.3% Projected return using historical [(Total Gain / Current Price) ^ (1/
605.2 Earnings after 10 years (BVPS * 1,426.1 Sum of dividends paid over 10 ye
15,383 Projected price (Average P/E * EP 16,809 Total gain (Projected Price + Div
dsheet
Past no predictor of the future. So be careful using numbers in this sheet - that are based on past numbers - into your fair value calculations. Of cou past can give some indications of the future, but t future is never always the same.
Warning!
P/E Ratio Low 15.2 14.9 18.0 20.3 23.3 24.4 17.2 18.8 23.2 27.2
ROEPayout Ratio 29.1% 50.5% 27.4% 56.3% 30.7% 52.3% 32.8% 56.5% 36.1% 44.4% 41.7% 39.8% 33.1% 42.2% 48.9% 31.0% 38.5% 36.4% 36.0% 38.8%
Past is ure. So be careful using that are based on past lue calculations. Of course tions of the future, but the lways the same.
Valuation - Different Methods (Rs) Graham Number 773 Avg P/E Ratio Valuation 2,356 EPV DCF Historical Earnings Growth Sustainable Earnings Growth 859 1,209 7,460 4,953
Rem
Give importance to a stock's fair v in "Yes" to these two questions understood? and (2) Can
Fair Value Range (Rs/Share) High End 2,935 Low End 1,578 Margin of Safety (MoS) 50% Fair Value after MoS 1,128 Current Mkt. Price (CMP, Rs) 4,665 Premium / (Discount) 313.5%
Don't try to quantify everything mathematical you are, the more your analysis and results. Grea env
Also, your calculated "fair value" don't invest your savings just b look for perfection. It is overrated Look for disconfir
n
L-2 87.1 2,545 29.2 1,640 18.8 24.0 L-1 87.9 3,017 34.3 2,040 23.2 28.8 L 103.1 3,762 36.5 2,802 27.2 31.8
Remember!
nce to a stock's fair value only "after" you have answered these two questions - (1) Is this business simple to be rstood? and (2) Can I understand this business?
o quantify everything. In stock research, the less nonal you are, the more simple, sensible, and useful will be is and results. Great analysis is generally "back-of-theenvelope".
culated "fair value" will be proven wrong in the future, so your savings just because you fall in love with it. Don't ction. It is overrated. Focus on decisions, not outcomes. Look for disconfirming evidence. Pray!