Saturday, August 16, 2014

Eleven Dimensions Global Fund

I have been encouraged by few of my friends to open a global fund to invest in emerging economies like India, Bangladesh, Kenya, Sri Lanka, or the US, UK, New Zealand, Australia and anywhere else the opportunity presents itself.

More importantly I am also optimistic about the idea pool once again which had dried up while I limited the striking distance to India and recent runup post Modi era.

I will provide more details for the Global Fund on a new website, yet to be launched. Meanwhile for those interested in investing their hard earned money in equities can email me at amitdipsite@hotmail.com with a brief information about yourself and your return expectations in CAGR (compounded annual growth rate as a percentage).

Besides earning money it gives me the opportunity to meet great human beings and build lasting friendship.

http://www.elevendimension-funds.com

Wednesday, August 6, 2014

BERGER BANGLADESH - Long term investment

Not going to waste much space or time. Company does not require much research.

Banks want to lend funds to people who are money-wise do not really need cash but just happen to, for an urgent requirement. Likewise, we need to buy companies that do not need to be listed on stock market, have adequate cash flow, but are because of a freak accident or first generation entrepreneur.

Berger Bangladesh was listed because of similar freak incident. 5% shares are listed on Dhaka Stock Exchange. Market cap 2300 Crores, PE 20, Growth 20-25%. 
CMP - 1000 BDT
Dividend - 22 BDT
Debt - 0
EPS for H1 = 27  BDT

Cash Flows - 180 Crores per annum, growing at 25% per annum

Competitive position is twice as strong as Asian Paints (35% market share in India ) in terms of market share - 60% market share in Bangladesh. Asian Paints sells at 52 PE, 6 times sales (no idea why? with 12-15% growth). Berger Bangladesh with better future and better past, current  and expected future growth rates sells at 20 PE and 2 times sales.

Tie up with 2nd biggest paint company in the world,  PPG
http://www.wpcia.org/news/World%27s%20Top%20ten%20Paints%20Companies%202013%20Annual%20Report.html

Also, another JV with Becker

http://www.beckers-group.com/en/News--media/News/2011/Joint-Venture-in-Bangladesh/

The only end result of holding this stock for long term can be phenomenal compounding, wealth creation and financial riches. Can be a 10-15 bagger+ in a decade with very high stability in all 
economic cycles, extremely attractive dividend payouts, will likely re-rate to 40+ PE eventually.

Don't be fooled by the name Berger, in India it may have 17% market share but it is a monster, a 927 pound gorilla without any equal in Bangladesh.


http://www.dsebd.org/displayCompany.php?name=BERGERPBL

http://www.bergerbd.com/corporate_info/reports/Annual_and_Quarterly_Reports


Feel free to go crazy with your research.

Disclosure: Invested

Saturday, July 5, 2014

Cargills Ceylon & CiC Holdings - Sri Lanka

As you saw in the previous post Moat how every investor in Sri Lanka made 16X in just a decade by investing in index (unless he was foolish enough to short). Hand picking (more like weeding out a couple) of selected companies out of index would further bolster returns.

Below are a couple of pure -blooded companies that I am giving a skip to, on account of somewhat higher leverage/debt, rapid build up of assets recently and restructuring. The market share of these companies is somewhat similar to what would be in India if we combine three groups plus more, Godrej + Dabur + Emami, and some more. Roughly accounting for 5-7% of Sri Lanka's GDP.


First  - http://cargillsceylon.com

Year of Establishment - 1844
Market Cap 1500 Crores INR / 250 Million USD
P/E ~20
Businesses - more than 20, in more than half of them where company has more than 70% market share. 

Retail - http://cargillsceylon.com/OurBusinesses/CargillsRetail.aspx (more than three retail chains, market leader in the country)
FMCG, FOOD, Dairy  - http://cargillsceylon.com/OurBusinesses/CQF.aspx where KFC franchise acquired in 2010 is growing by 40% and TGIF acquired this year ( More than 10 businesses)
Agri - http://cargillsceylon.com/OurBusinesses/AgriBusiness.aspx


Annual Reports - http://cargillsceylon.com/InvestorRelations/CorporateReports.aspx



Second - http://www.cic.lk

Year of establishment ~1960
Market Cap 200 Crores INR / 35 Million USD
P/E ~25
Businesses - more than 35, again company is leader in  half of them and needs to prune to increase profitability

Company represents the two biggest market leaders in the world. Biggest Paint company of the World ( Market Cap 20 Billion USD - AKZO NOBEL), Biggest Personal Care company ( Market Cap 300 Billion USD - JOHNSONS & JOHNSONS). For a context Unilever globally is around 120 Billion USD.

It is really ironical that I give a miss to above two world class companies; but continue to latch on to C grade stocks from India like Gulshan Polyols, Wim Plast where I did make 3X and 20X returns but uncertain about their future Awesome-ness and Majesty. In a future post I may write about what is worth buying in Sri Lanka with a 20X potential in a decade.