Kayak IPO Expected In Coming Weeks
CNBC is reporting that travel site Kayak may finally spring its long-delayed IPO in the coming few weeks, riding Facebook's mega-wake. This news follows a bump in recent performance that Kayak showed off in its Q1 earnings report. The company reported a 39 percent increase in revenue and a net earnings of $4 million for the first quarter of the year, compared to $7 million lost in Q1 last year. According to CNBC, Kayak is targeting a $150 million IPO pegging the valuation at a shade over $1 billion.
Study: Pirate Bay-like Sharing Sites Help Albums Sell
File sharing site Pirate Bay's come under fire recently and is being blocked everywhere from Manchester to Mumbai. TorrentFreak found a new study by an economist at North Carolina State University that adds to evidence that closing down such file sharing sites may hurt sections of the same music industry that's hunting them down. Robert Hammond studied a year's worth of album sales data, comparing it with file shares via BitTorrent. He found that album sales did better if they became available first as shared files--selling up to 60 more copies a month after their online "release." Hammond also found that this trend favors established musicians over smaller, indie artists--in fact, the bigger they were, the more benefit they got from file sharers.
Iran To Sue Google Over Leaving The Persian Gulf Nameless On Maps
Irate about Google's regional omission on Google Maps, Iran may sue Google for failing to mark that limb of the Arabian Sea by Iran and the Arabian peninsula as the "Persian Gulf" AP reports. The name of the water body has been a sore point between Iran and its neighbors in the Middle East, the BBC explains--while Iran favors "Persian Gulf," other countries have been rallying behind "Arabian Gulf." Google for its part, prefered to avoid the issue entirely, leaving the water body nameless. H/T: TheNextWeb.
FCC To Vote On Spectrum For Wireless Health Monitors
Wireless medical electronics may be getting their own space. Reuters reports that the Federal Communications Commission is nearing a decision about wireless electronics, and is set to announce plans about their future in the U.S. today. All across the country, research is underway to develop small, sensitive, efficient, low-power sensors for the body that could wirelessly transmit patient data to monitors, giving them a tad more mobility. The FCC is due to vote on a two-spectrum plan on May 24, which would designate one spectrum for wireless monitoring at hospitals and medical facilities, and another spectrum for wirelessly monitoring patient data at their homes.
Pinterest Gains $100 Million Funding, Now Worth $1.5 Billion
AllThingsD reports Pinterest has just landed the big prize: A $100 million investment round led by a $50 million sum from leading Japanese e-commerce site Rakuten. The cash will help Pinterest improve its operations and expand global coverage leveraging Rakuten's existing multinational presence, and comes after previous funding of just $40 million and a valuation in October 2011 of just $200 million. Pinterest has been surrounded by allegations of criminal spamming schemes and copyright infractions, but this growth rate marks it as end of Siicon Valleys next hot startups to watch.
Facebook Insiders Cash Shares In, Pre-IPO Hackathon, New Apps
The additional shares available on IPO that Facebook revealed later yesterday actually won't make Facebook itself any cash--they are actually being sold by existing insider shareholders. This may have raised a few eyebrows in the financial world because selling a stake like this at launch could indicate a lack of long-term confidence in a company's future...although the fact that the offer price has risen from earlier estimates is more likely the driving factor. Meanwhile it's been reported to TechCrunch that a traditional all-nighter Hackathon at Facebook HQ will precede the IPO, ending with the remote-ringing of the Nasdaq bell. And as the last hours before IPO dribble away, Facebook issued an iPhone app designed to help users who utilize Facebook to promote a brand or and event manage their Pages with ease while mobile.
CNBC is reporting that travel site Kayak may finally spring its long-delayed IPO in the coming few weeks, riding Facebook's mega-wake. This news follows a bump in recent performance that Kayak showed off in its Q1 earnings report. The company reported a 39 percent increase in revenue and a net earnings of $4 million for the first quarter of the year, compared to $7 million lost in Q1 last year. According to CNBC, Kayak is targeting a $150 million IPO pegging the valuation at a shade over $1 billion.
Study: Pirate Bay-like Sharing Sites Help Albums Sell
File sharing site Pirate Bay's come under fire recently and is being blocked everywhere from Manchester to Mumbai. TorrentFreak found a new study by an economist at North Carolina State University that adds to evidence that closing down such file sharing sites may hurt sections of the same music industry that's hunting them down. Robert Hammond studied a year's worth of album sales data, comparing it with file shares via BitTorrent. He found that album sales did better if they became available first as shared files--selling up to 60 more copies a month after their online "release." Hammond also found that this trend favors established musicians over smaller, indie artists--in fact, the bigger they were, the more benefit they got from file sharers.
Iran To Sue Google Over Leaving The Persian Gulf Nameless On Maps
Irate about Google's regional omission on Google Maps, Iran may sue Google for failing to mark that limb of the Arabian Sea by Iran and the Arabian peninsula as the "Persian Gulf" AP reports. The name of the water body has been a sore point between Iran and its neighbors in the Middle East, the BBC explains--while Iran favors "Persian Gulf," other countries have been rallying behind "Arabian Gulf." Google for its part, prefered to avoid the issue entirely, leaving the water body nameless. H/T: TheNextWeb.
FCC To Vote On Spectrum For Wireless Health Monitors
Wireless medical electronics may be getting their own space. Reuters reports that the Federal Communications Commission is nearing a decision about wireless electronics, and is set to announce plans about their future in the U.S. today. All across the country, research is underway to develop small, sensitive, efficient, low-power sensors for the body that could wirelessly transmit patient data to monitors, giving them a tad more mobility. The FCC is due to vote on a two-spectrum plan on May 24, which would designate one spectrum for wireless monitoring at hospitals and medical facilities, and another spectrum for wirelessly monitoring patient data at their homes.
Pinterest Gains $100 Million Funding, Now Worth $1.5 Billion
AllThingsD reports Pinterest has just landed the big prize: A $100 million investment round led by a $50 million sum from leading Japanese e-commerce site Rakuten. The cash will help Pinterest improve its operations and expand global coverage leveraging Rakuten's existing multinational presence, and comes after previous funding of just $40 million and a valuation in October 2011 of just $200 million. Pinterest has been surrounded by allegations of criminal spamming schemes and copyright infractions, but this growth rate marks it as end of Siicon Valleys next hot startups to watch.
Facebook Insiders Cash Shares In, Pre-IPO Hackathon, New Apps
The additional shares available on IPO that Facebook revealed later yesterday actually won't make Facebook itself any cash--they are actually being sold by existing insider shareholders. This may have raised a few eyebrows in the financial world because selling a stake like this at launch could indicate a lack of long-term confidence in a company's future...although the fact that the offer price has risen from earlier estimates is more likely the driving factor. Meanwhile it's been reported to TechCrunch that a traditional all-nighter Hackathon at Facebook HQ will precede the IPO, ending with the remote-ringing of the Nasdaq bell. And as the last hours before IPO dribble away, Facebook issued an iPhone app designed to help users who utilize Facebook to promote a brand or and event manage their Pages with ease while mobile.
Google's social collaboration service, Schemer, is now available for iOS operating system based devices like iPhone and iPad. Schemer, which was launched last year, is a social service that allows users to create schemes and let others join it.
The Schemer service allows users to find out or explore both popular and not so popular places along with recommendations as well if any. Schemer will even suggest the perfect scheme for the moment, for example watching a movie on a rainy day or brunch for a weekend morning.
Users can also discover new places and share with their friends or better still make a scheme of things that they wish to do over the day or the nearing weekend as well. Users can leave recommendations for newbies to discover or maybe an ultimate spot to hangout.
For India, Google has tied up with popular services and recommendations engines like 'Time Out' to provide out of the box solutions to the users. Looking at the future, we expect lot more such services to be included in Schemer.
For iOS users, Google has integrated the Google+ services within the new application and users will now be able to use their Google + profiles for using this service. This will further benefit the users as they will be able to add all the people in their circles and start scheming with them in no time.
Users can also discover new places and share with their friends or better still make a scheme of things that they wish to do over the day or the nearing weekend as well. Users can leave recommendations for newbies to discover or maybe an ultimate spot to hangout.
For India, Google has tied up with popular services and recommendations engines like 'Time Out' to provide out of the box solutions to the users. Looking at the future, we expect lot more such services to be included in Schemer.
For iOS users, Google has integrated the Google+ services within the new application and users will now be able to use their Google + profiles for using this service. This will further benefit the users as they will be able to add all the people in their circles and start scheming with them in no time.
Facebook's IPO price range is now final, and there will be no amendments to it on Thursday, a source tells CNBC.
This means that the company and its underwriters will be working with its current price range of $34 to $38.
Under the U.S. Securities and Exchange Commission's rules, Facebook can still price up to 20 percent above that range with $45 representing an absolute maximum.
The company is expected to price its IPO on Thursday and begin trading on Friday.
This means that the company and its underwriters will be working with its current price range of $34 to $38.
The company is expected to price its IPO on Thursday and begin trading on Friday.
Minority babies outnumbered white newborns in 2011 for the first time in U.S. history, the latest milestone in a demographic shift that’s transforming the nation.
The percentage of white newborns fell to 49.6 percent of children younger than a year old from April 2010 to July 2011, the U.S. Census Bureau said today.
The trend is likely to have a far-reaching impact on the country’s political alignment, the nature of its workforce and on its economic future. Predominantly white, older enclaves in the Northeast and Midwest will increasingly rely on an expanding population of young Asians and Hispanics in the West and Sun Belt to support Social Security and other retirement programs.
“This is a fundamental tipping point signaling a change in our demographic structure for decades to come,” William Frey, a demographer and senior fellow at the Brookings Institution in Washington, said in an e-mail.
The figures highlight the rapid growth in the Hispanic and Asian populations, both of which have surged by more than 40 percent since 2000. Hispanics were 16.7 percent of the population in July 2011 and Asians were 4.8 percent. The black population has grown 12.9 percent since 2000 and makes up 12.3 percent of the nation. Non-Hispanic whites rose only 1.5 percent from 2000 to 2011, slower than the national growth of 9.7 percent, and are now 63.4 percent of the population.
Becoming a Minority
Four states -- Hawaii, California, New Mexico and Texas, plus the District of Columbia -- now have majority-minority populations.
A 2009 Census report estimated that non-Hispanic whites will become a minority of the total population after the 2040 Census, making up 48.5 percent in 2045. The government plans to release revised projections later this year, said Alexa Jones- Puthoff, chief of the bureau’s population estimates branch.
The Hispanic growth rate is being driven more by native births than immigration, according to the Pew Hispanic Center, which reported last month that the net migration from Mexico to the U.S. has stopped and may be reversing. The growth of Latino residents is the result of a younger population and higher fertility rates, said Jeffrey Passel, senior demographer for the Washington-based center.
“The younger the age group, the less white it is,” he said.
Accelerating Trend
In Georgia, the number of Hispanic babies grew 20.9 percent from April 2010 to July 2011, the fastest rate of any state. It will probably become majority-minority by 2025, said Matt Hauer, director of the University of Georgia’s Applied Demography Program.
“It’s been on this path for the last 10 or 20 years,” Hauer, a former Census Bureau statistician, said in a telephone interview. “But it’s been accelerating over the past decade. And it’s not just any one area -- this is a statewide phenomenon.”
The differences have become stark in Texas, said Mark Fossett, director of the Texas Census Research Data Center at Texas A&M University. The state added more Hispanic babies during the 15-month period to July 2011 than any other.
“If you’re 60 years old, this is an Anglo state,” he said. “That’s where you see the wealth, income, home ownership, and high-voting patterns. Anything else, especially below 18, the school-age population, looks Latino.”
Fossett said the increase in children is putting pressure on the school system in the state, where the legislature last year cut more than $5 billion in education funding from its two- year budget of $172.3 billion.
Inopportune Cuts
“Now, you’ve got all your standard requirements for meeting the needs of an urban economy and a large school population whose parents have lower educational levels and lower incomes,” he said. “This is occurring right at a time when Texas is cutting down on education spending.”
Texas is home to the nation’s two most minority counties -- Maverick at 96.8 percent and Webb at 96.4 percent.
The transition to a majority-minority nation won’t be smooth, said Passel, the Pew demographer. Even so, he said, the U.S. has proven its ability to absorb new racial and ethnic groups in the past.
“If you go back 100 years, groups that are now considered part of the majority white population were perceived as minorities,” he said. “Over time, we’ll change the way we perceive these categories.”
Social Security
That perception may change even faster with the realization that younger non-white workers will play a bigger role in helping shore up financially strapped retirement and other social- welfare programs.
The Social Security trust funds that pay retirement, disability and survivor’s benefits to one in four U.S. households will be exhausted by 2033, the program’s trustees said in a report released last month. The main fund that pays for the federal Medicare health-insurance program for the elderly will run out of money in 2024, the report said.
Currently, there are 4.8 working-age Americans for every person older than 65. By 2035, that number will fall to 2.8 people per retiree.
The percentage of white newborns fell to 49.6 percent of children younger than a year old from April 2010 to July 2011, the U.S. Census Bureau said today.
The trend is likely to have a far-reaching impact on the country’s political alignment, the nature of its workforce and on its economic future. Predominantly white, older enclaves in the Northeast and Midwest will increasingly rely on an expanding population of young Asians and Hispanics in the West and Sun Belt to support Social Security and other retirement programs.
“This is a fundamental tipping point signaling a change in our demographic structure for decades to come,” William Frey, a demographer and senior fellow at the Brookings Institution in Washington, said in an e-mail.
The figures highlight the rapid growth in the Hispanic and Asian populations, both of which have surged by more than 40 percent since 2000. Hispanics were 16.7 percent of the population in July 2011 and Asians were 4.8 percent. The black population has grown 12.9 percent since 2000 and makes up 12.3 percent of the nation. Non-Hispanic whites rose only 1.5 percent from 2000 to 2011, slower than the national growth of 9.7 percent, and are now 63.4 percent of the population.
Becoming a Minority
Four states -- Hawaii, California, New Mexico and Texas, plus the District of Columbia -- now have majority-minority populations.
A 2009 Census report estimated that non-Hispanic whites will become a minority of the total population after the 2040 Census, making up 48.5 percent in 2045. The government plans to release revised projections later this year, said Alexa Jones- Puthoff, chief of the bureau’s population estimates branch.
The Hispanic growth rate is being driven more by native births than immigration, according to the Pew Hispanic Center, which reported last month that the net migration from Mexico to the U.S. has stopped and may be reversing. The growth of Latino residents is the result of a younger population and higher fertility rates, said Jeffrey Passel, senior demographer for the Washington-based center.
“The younger the age group, the less white it is,” he said.
Accelerating Trend
In Georgia, the number of Hispanic babies grew 20.9 percent from April 2010 to July 2011, the fastest rate of any state. It will probably become majority-minority by 2025, said Matt Hauer, director of the University of Georgia’s Applied Demography Program.
“It’s been on this path for the last 10 or 20 years,” Hauer, a former Census Bureau statistician, said in a telephone interview. “But it’s been accelerating over the past decade. And it’s not just any one area -- this is a statewide phenomenon.”
The differences have become stark in Texas, said Mark Fossett, director of the Texas Census Research Data Center at Texas A&M University. The state added more Hispanic babies during the 15-month period to July 2011 than any other.
“If you’re 60 years old, this is an Anglo state,” he said. “That’s where you see the wealth, income, home ownership, and high-voting patterns. Anything else, especially below 18, the school-age population, looks Latino.”
Fossett said the increase in children is putting pressure on the school system in the state, where the legislature last year cut more than $5 billion in education funding from its two- year budget of $172.3 billion.
Inopportune Cuts
“Now, you’ve got all your standard requirements for meeting the needs of an urban economy and a large school population whose parents have lower educational levels and lower incomes,” he said. “This is occurring right at a time when Texas is cutting down on education spending.”
Texas is home to the nation’s two most minority counties -- Maverick at 96.8 percent and Webb at 96.4 percent.
The transition to a majority-minority nation won’t be smooth, said Passel, the Pew demographer. Even so, he said, the U.S. has proven its ability to absorb new racial and ethnic groups in the past.
“If you go back 100 years, groups that are now considered part of the majority white population were perceived as minorities,” he said. “Over time, we’ll change the way we perceive these categories.”
Social Security
That perception may change even faster with the realization that younger non-white workers will play a bigger role in helping shore up financially strapped retirement and other social- welfare programs.
The Social Security trust funds that pay retirement, disability and survivor’s benefits to one in four U.S. households will be exhausted by 2033, the program’s trustees said in a report released last month. The main fund that pays for the federal Medicare health-insurance program for the elderly will run out of money in 2024, the report said.
Currently, there are 4.8 working-age Americans for every person older than 65. By 2035, that number will fall to 2.8 people per retiree.
According to the breaking news that flashed, websites of Indian Supreme Court and Congress are hacked by unknown hackers.
A number of Internet service providers had blocked access to popular video sharing websites such as Vimeo and DailyMotion as well as major torrent search services including The Piratebay and isoHunt apparantly following a court order obtained by Copyright Labs, a Chennai-based online anti piracy service provider.
According to Copyright Labs, ISPs were asked to block specific websites but in a repeat of earlier instances they ended up blocking entire domains.
In retaliation Anonymous's opIndia hackers targeted the websites of the Congress Party (aicc.org.in), Supreme Court (supremecourtofindia.nic.in) as well as that of Copyright Labs (copyrightlabs.in).
Even the Department of Telecommunications (dot.gov.in) website was on the hackers' hit-list but it seems to have fended off the attack.
Soon after news of the block spread, social networks were abuzz with tricks and tips on how to bypass the ban.
A number of Internet service providers had blocked access to popular video sharing websites such as Vimeo and DailyMotion as well as major torrent search services including The Piratebay and isoHunt apparantly following a court order obtained by Copyright Labs, a Chennai-based online anti piracy service provider.
According to Copyright Labs, ISPs were asked to block specific websites but in a repeat of earlier instances they ended up blocking entire domains.
In retaliation Anonymous's opIndia hackers targeted the websites of the Congress Party (aicc.org.in), Supreme Court (supremecourtofindia.nic.in) as well as that of Copyright Labs (copyrightlabs.in).
Even the Department of Telecommunications (dot.gov.in) website was on the hackers' hit-list but it seems to have fended off the attack.
Soon after news of the block spread, social networks were abuzz with tricks and tips on how to bypass the ban.
Net income for the quarter ended April 30 rose 10 percent to $3.74 billion, or $1.09 a share, from $3.4 billion, or 97 cents, a year earlier, Bentonville, Arkansas-based Wal-Mart said today in a statement. The average of 24 analysts’ estimates compiled by Bloomberg was $1.04 a share.
At a time when a bribery probe in Mexico threatens growth in Wal-Mart’s international operations, Chief Executive Officer Mike Duke is trying to boost U.S. sales by adding items back to shelves and honoring the promise of everyday low prices. The company is working with suppliers to lower costs and pass some of the savings on to consumers.
Same-store sales “likely benefited from the same unseasonably warm winter that aided other retailers in February and March,” Colin McGranahan, an analyst at Sanford C. Bernstein & Co. in New York, said in a research note.
Total revenue rose 8.5 percent to $113 billion.
Wal-Mart rose 1.8 percent to $60.25 at 7:05 a.m. in New York. The shares had fallen 1 percent this year before today.
Viacom Inc. (VIAB), the owner of MTV, Comedy Central and the Paramount film studio, agreed to resolve a legal dispute with Time Warner Cable Inc. (TWC), allowing cable customers to see Viacom shows on devices such as Apple Inc. (AAPL)’s iPad.
“All of Viacom’s programming will now be available to Time Warner Cable subscribers for in-home viewing via Internet protocol-enabled devices such as iPads,” the companies said yesterday in a joint statement posted on Viacom’s website. Time Warner Cable won’t be paying more to stream shows on the gadgets, according to two people familiar with the matter who asked not to be identified because the terms are private.
Viacom sued in 2011, seeking an order blocking Time Warner Cable from distributing Viacom programming on portable electronics. Time Warner Cable also sued, seeking a ruling from the court that its contract with Viacom allowed the distribution of content on the devices.
The case underscored tensions between media companies and pay-television providers over how television content can be used in the iPad era. Consumers are increasingly watching TV on computers, tablets and other mobile devices, and cable companies are eager to accommodate them.
Last August, Viacom resolved a similar lawsuit against Cablevision Systems Corp. (CVC), which had been distributing Viacom’s programming on the iPad. The companies said Cablevision could continue to run Viacom’s programs on the devices.
Shares of Viacom, based in New York, rose less than 1 percent to $47.25 yesterday. Time Warner Cable climbed less than a 1 percent as well, to $76.35.
Fees Rise
Viacom, controlled by Chairman Sumner Redstone, reported better-than-anticipated profit last quarter on increased fees from pay-TV operators. The company’s media networks unit, which contributed 92 percent of operating profit in fiscal 2011, saw a 15 percent increase in domestic fees for its cable networks. U.S. ad sales rose 1 percent from a year earlier, following a 3 percent decline in the previous quarter.
Time Warner Cable also settled a dispute over Viacom’s Country Music Television. The cable provider will continue to carry the channel, the companies said in yesterday’s statement.
The case is Viacom International v. Time Warner Cable, 11- 02387, U.S. District Court, Southern District of New York (Manhattan).
Seth Klarman, the famed value investor and manager of the Baupost hedge fund, has provided some sage advice with regards to investing – "be a contrarian armed with a calculator". With this in mind, let us look at the curious case of India, where the consensus opinion is decidedly bearish (have yet to find a bullish view amongst my friends in the financial area!), based on a long list of ills which currently plague the Indian financial, economic and political system. In recent months, Morgan Stanley's India research team (headed by Ridham Desai) has produced some excellent notes on the macro fundamentals in India, making the argument for the long-term bull case. In particular, their recent piece titled " A Macro Framework for Corporate Profits" is one of the best macro research piece I have come across on India (and for that matter any emerging market) and draws on a recent path-breaking note by James Montier of the value manager GMO which provides a framework to analyse corporate profits from a top-down macro perspective. To summarise:
-Corporate profits in India have compounded by 21% per annum over the last 10 years, but have declined to an annual growth rate of 8% over the last 4 years (see graph below) while nominal GDP has grown by 15.6% per annum over the last 4 years. From a peak of 10.7% of GDP in fiscal year 2008, profits have dropped to 8.9% of GDP. At a micro level this can be explained by a big drop in margins. It is also helpful to understand the macro drivers.
-Corporate profits at the country level can be derived from the basic macroeconomic investment-savings identity . Profits equal: Investments – Household Savings – Public Savings – Current Account deficit + Dividends (all expressed as a percentage of GDP). To think of this identity intuitively, all domestic spending (whether consumption or investment) counts towards profits , foreign spending detracts from profits and all savings (private or public) reduces profits. Dividends are paid an income transfer from the corporate sector to households.
-The macro approach tracks reported earnings (of 6,890 companies) closely (see chart below).
-The slowdown in profits has come primarily from a 3.7% (of GDP) drop in the investment rate over the last four years (see chart below). The second biggest drag on profits over the last four years has been the 2.7% increase in the current account deficit, but the 5.0% decrease in public savings over the same period has more than offset this impact. If it were not for the public spending increase, corporate profits would have declined by 5% per annum.
-The case for a premium for Indian equities over other markets rests on the significantly lower volatility of earnings growth (see chart below) . This lower volatility in earnings is explained by the long-term stability in India's investment rate and household savings, which are the biggest drivers of profits (see graph below). The shorter-term fluctuations in the earnings growth comes from swings in public savings and the current account deficit – but they are relatively smaller drivers of profits in the long-term.
-The outlook for corporate profits over the next 12 months depends on the interplay between public savings (or the fiscal deficit which is a subset of savings and the two track each other very closely) and the current account deficit.
- It is unlikely that the investment rate or household savings rate will change by much. However, there is a risk that the investment rate dips somewhat due to policy uncertainty, low starting point for ROE and the high cost of capital, which will hurt profits. In addition, higher real rates could cause savings to grow and also hurt profits.
-A likely reduction in the fiscal deficit will act as a drag on profits, while the accompanying compression in the current account deficit will provide a boost to profits. While fiscal discipline is good for long term macroeconomic stability , too much and too soon will hurt profits.
-The current account deficit therefore holds the key to profits over the next 12 months. The best way to achieve a reduction in the current account deficit (and an increase in profits) is to boost exports – but that is unlikely in a slowing global economy. The other way would be to reduce imports – not the bad way by reducing domestic consumption (which would hurt profits) but by a reduction in the prices of imports (i.e. lower oil prices) which would increase profits.
-So expecting stable investment and savings rates, and a decline in the fiscal deficit together with an offsetting decline in the current account deficit plus an increase in the dividend payout (which typically increases when profits are low) , would result in a 16% growth in earnings assuming a 13.8% nominal GDP growth rate (see graph below).
-The historically wide gap between the market cap and profits as a share of GDP indicates that the market is very pessimistic in the outlook for profits, making equities an attractive buy from a long-term perspective (see graph below).
A very insightful piece of work, and sorely lacking for most markets outside of the US (would love to see similar work on the Chinese market!). In the investment world, it is critical to look at the trees from time to time, and not get overly bogged down in the weeds. Yes, there are many negative factors facing the Indian market today(too long to list!), but the stock market is cheap and for a long term investor it presents an attractive opportunity to go long (or add to core long positions) over the course of the next few months. Exposure can be taken to the entire market, or to the mid-cap or small-cap sectors which present even more attractive valuations (see relative valuation analysis below). There are funds and ETFs to effect this exposure – both in the domestic market as well as the offshore market.
-The broad market , in US$ terms relative to the broader Asian market, is now at the late 2008/early 2009 lows reached during the financial crisis.
-On a price to book valuation, adjusting for the growth in book value, the market is just 15% higher that the levels established during the end of 2008.
-Small-cap stocks currently trade at 1.1*book which are near a historical low, and the relative price/book is at a multi-year low going back to 2002 and at a 60% discount to the broad market.
Regarding the US market, the economy is showing some clear signs of slowing down which is typically associated with a market correction. The chart below (Citi economic surprises index versus US equities minus US government bond 3 month returns) illustrates this phenomenon rather well:
But with the current easing programme (Operation Twist) expiring in the end of June, it is unlikely that the market will suffer a serious 10-15% correction until after the expiry of the programme, as long as the possibility of an extension or a new QE programme to be announced before the end of June remains. However, if there is no new programme announced, the chances of a subsequent 10-15% downturn will increase substantially. This, if it happens (as noted in previous newsletters), should be viewed as a buying opportunity as it would significantly increase the likelihood of another QE programme!
HIDDEN GEM "VIRINCHI TECHNOLOGIES LTD"(BSE CODE:532372)AT 11/- TARGET 22/- & 35/-
STOCK : VIRINCHI TECHNOLOGIES LTD Trading in BSE CODE : 532372
CMP : 11/- Promoters Buying Heavily….. Increasing Stake
Target : 22/- to 35/- in Short term and Medium terms (In this Weak Market Good time to buy this worthy stock to get multi Returns in very Short time.)
Last 6 Months Given Calls 1) PITTI Laminations at 37/- Now 95/-
2) Venus Power at 7/- Now at 21/-
3) LGS Global at 45/- Now at 100/-
4) Avon Organics given at 20/- Now 30/-
5) IFCI at 20/- Now at 40/-
6) NATCO at 350/- Now 435/- ( I given call in 2009 at 40/- Now 445/- almost 10 times return)
7) TechTran Polylences at 22/- Reached 29.5/- in 3 days time.
8) Rathi Steel & Power at 11/- Reached 15.85/- in 3 days time.
Now we suggesting Buy and hold VIRINCHI TECHNOLOGIES LTD with 11,000/- rupees for 1,000 shares and hold will get 35,000/- to 57,000/- means 5 times Return in 3 to 6 Months time.
Because Virinchi Going to Restructuring of the Company; value is very high. Just buy and hold till 35/- to 69/- levels soon.
Company having good Fundamentals and good Financial background and Good Management and Company having good International prestigious Clients from UK, USA, Europe, Germany, France, Italy and Holland.
In this market Safe investment for this Stock at 11/- With target of 35/-. Within 1 to 3 months time.
Equity : 14.9 Cr
Face Value : 10/-
Book Value: 53/-
Promoters Holding : 28% ;
Financial Institutions and Banks 8%;
Body Corporate : 8.59%;
Public Only 56%
EPS : 3.13/- for 2010-11 and 2011-12 Expecting 4/- above.
Every Year Dividend Paying company.
Dividend History: 2011 --- 5%; 2010 --- 5%; 2009 --- 5%; 2008 --- 5%; 2007 --- 5%; 2006 --- 5%; 2005 --- 5%
VIRINCHI TECHNOLOGIES LTD going to Restructuring of the Company.
VIRINCHI TECHNOLOGIES LTD Having Good Infrastructure and Land Bank and Valuable Assets.
VIRINCHI TECHNOLOGIES LTD Expanding plans is very Aggressive.
VIRINCHI TECHNOLOGIES LTD Stock Will go 22/- to 35/- and 69/- range in Short term and Medium Term., Like SE Investment (Call Given at 175/- Now including Bonus and Stock split 1250/-) and Bihar Tubes Ltd (Call Given at 57/- Now 165/-).
For 2010-11 Year Net Income of 64 Cr and Net Profit was 4.6 Cr EPS 3.13/-
For 2011-12 Full Year Estimating Net Income of 87 Cr and Net Profit of 6 Cr As per this EPS was 4/- above. But in coming Quarters Expanding Business Income will add so Expecting EPS for 2012-13 is 5/- above. Stock Trading at 11/- PE just 3 Industry PE is 18. As per this Stock will zoom to 50/- levels in 6 Months to 1 Year Time.
Virinchi Technologies Limited is an IT Products and Services company focusing on financial services Industry servicing customers in North America, Europe & Middle East. Its world leaders as software service provider to Retail Micro Lending and deferred presentment Industry.
Virinchi is a CMMi Level 3 company and ISO 9001:2000 certified for its Production, Delivery and Quality process
Virinchi Technologies Limited is an Information Technology Products & Services company offering world-class services to its global clients including some Fortune companies operating in varied industry verticals.
Virinchi Technologies Ltd has informed BSE that the Company has entered into a long term agreement with its strategic partner in the US to offer Oracale ERP Maintenance services to its clients who are primarily into research and development, manufacturing, distribution and retail domains. Total revenues from the deal is expected to be close to half a million US dollars which predominantly includes remote maintenance of the customer's Oracale -Business Suite implementations and the related onsite services that would generate additional revenues. This new line of service completely leverages the Company's past experience of developing, integrating and managing Enterprise class applications for various large customers based out of the Middle East, Europe and the US. This new service would be delivered from the new office space developed.
The Board has appointed M/s. Tata Capital Ltd as Financial Advisors for restructuring of the Company through formation of focused subsidiaries in-order to un-lock the value of its software intellectual property across different industry domains.
The Board recommended incorporation of the 100% subsidiary "Qfund Technologies Pvt Ltd", that shall focus on providing transaction business services in Deferred Presentment Industry in the US and UK markets, where its retail micro lending product "Qfund" is the first mover and the market leader. The Board accepts the resignation of Anil Kumar Pinapala as its Executive Director and nominates him to be the CEO and Executive Director of Qfund Technologies Pvt Ltd upon incorporation, to lead the Company.
The Board also recommended incorporation of the 100% subsidiary "Virinchi Media and Entertainment Pvt. Ltd" to launch internet portals to serve the growing demands of the Indian Entertainment Industry to enable Creation, Buying, Selling and Delivery of high definition entertainment through internet to customers across globe.
The Board also recommended incorporation of the 100% subsidiary "Virinchi Learning Pvt Ltd" to promote technology based, for profit, quality education services to the different student categories in India, both by creation of new content & infrastructure and also by partnering with existing content providers by leveraging the strength of Information technology.
The Board has allotted 30,00,000 convertible Warrants to the Promoters at Rs. 20/- per warrant as per the Guidelines for Preferential Issues.
This company has a great future. Even if we give a conservative P/E of 10 (Industry Avarage PE was 20), It should be trading at Rs. 39+ based on FY 20011-12 earnings. So there is a long way to go. Investors with faith in VIRINCHI management and having patience will definitely earn a lot based on Value of Products and Assets and Profits.
Positive Points for this stock for Up moving:
1) VIRINCHI TECHNOLOGIES LTD trading at 11/- trading in BSE Company Stocks not participated for recent Rally; Now It's good bet to Buy because of Company will declare good IV Quarter Results with EPS 4/-. Good Worthy to Buy at 11/- with Target of 22/- & 35/- Short time.
2) Mumbai Bulls and Operators are accumulating at current price. Because Stock is available at very cheap price at 11/-;
3) Book Value is 52/-. Good Profit making company; Expecting EPS for 2011-12 is 4/-
4) Good Dividend History every year 5% given to investors from 2005 onwards.
5) Company Restructuring very soon, company having Three own subsidiary companies in the areas of Media, Learning and Tech.
6) FII's are interesting to invest Because Company having good Value and Promoters Holding 29% and planning to increase stake.
7) Company Planning to buy US company; this results will effect next Quarter net profit and EPS.
8) 10/- Face Value stock Available at 11/-/- with EPS 4/- Book Value 52/- and Good Fundamental Company. No risk at Present rate at 11/- with target of 35/-.
9) Promoters allotted warrants at 20/- per share to promoters group, So Risk Free at Current Market Price, Its very cheap price trading at 11/- Compare to companies Reserves, Assets and Value and Equity and Profits and Future Plans.
Happy Invest ……….. Good Fundamentals and will give good returns from 100% to 500% returns with short and medium terms and Long terms.
