Shree Ganesh Jewellery House
Shree Ganesh Jewellery came out with a public issue in the price band of Rs 260-270. The current prevailing price of Rs 116 is almost half the IPO price.
The company has been doing very well over the last few quarters. What is interesting, however, is the fundmentals of Shree Ganesh. The company reported a net profit of Rs 82 crores for Q2 2013 and this has been a consistent trend for the past few quarters. It's on track to report an EPS of around Rs 50, which makes the price to earnings ratio at just 2.3 times. The price to book value is almost 0.53 times, which makes the stock attractive. You can barely find companies available at such low P/E and P/BV ratios in the current market. In fact, if the company maintains a similar dividend like last year, the dividend yield works to more than 5% .
The company has also has aggressive plans to increase its retail presence from 10 stores to more than 50 stores by 2013-14. The stock is currently undervalued and should rise in the coming months.
Visaka Industries manufactures cement asbestos and textile yarn. The company has a solid distribution and retail network.
Like Shree Ganesh Jewellery, Visaka Industries is also an undervalued stock. The company has been reporting consistent profits and is likely to clock an EPS of Rs 45for 2013, which puts the price to earnings multiple at 2.83 times. The Book Value is placed at Rs 180, translating into a price to book value of just 0.70 times.
The company last year paid a dividend of 50% and if one buys the stock now the dividend yield itself is likely to be almost 4%.
Visaka Industries is a good bet at the current levels and is grossly undervalued.