The curious case of HUL and how the markets play favourites

Hindustan Unilever just posted its results for the quarter ending March 2018. A healthy 14% year-on-year increase in net profit mostly attributable to a poor base quarter. HUL stock price promptly went up from around 1504 to 1574, a 4% increase in a couple of days. It is now valued at 65 times Earnings This means, If HUL’s profits stay the same and it paid out all of it’s profits to shareholders, it would take 65 years for a shareholder to recover her current buy price. For context, the NIFTY is at 27 times earnings. Chart shows HUL Earnings and

Read more

Fundamental Analysis Tools for Investors in India

In the course of finding the most time-efficient way of analyzing companies shortlisted for investment, I’ve come across various tools available to Indian investors. This post compiles a list of some of the tools that I’ve tried either briefly or extensively along with some of their key strengths and weaknesses. Note that this list is far from comprehensive and also that digested analysis from any source is typically only a starting point and not a substitute for diving into past annual reports to gain context of the fundamentals. Overall note of caution on using any tool that aggregates data is to assume

Read more

The financial metric that matters more than profits | Difference between Earnings and Free Cash Flow

Our ‘Earnings’ Obsession They are called “Earnings Calls” Defined by Investopedia as “A conference call between the management of a public company, analysts, investors and the media to discuss the financial results during a given reporting period such as a quarter or a fiscal year. An earnings call is usually preceded by an earnings report, which contains summary information on financial performance for the period.” The financial media has it front and centre as the metric to watch and report. No wonder then that we seek out “Earnings per Share” more than other investment metrics. So what’s wrong with Earnings

Read more