<> Re: 2 stocks that have packed in all the negative events! Contra Strategy

Business Today dated 21september2008
The slowdown in the countrys till recently sizzling retail banking segment has brought the high flying bank back to sea level.Its business grew at paltry 6.9% during the april-june 2008 quarter.By comparison the public sector SBI grew at 27% and HDFC BANK at an incredible 80%.
Credit growth
SBI   27.4%
HDFC BANK 80%
AXIS BANK  46.6%
ICICI BANK   6.9%
Figures in %for Q1 of 2008-09 Source BT Research

What is worrying many analysts more than the lack of any significant growth drivers are the RISING DELIquencies in ICICI Banks portfolio.Over the last year banks non performing loans HAVE SWELLED TO 50% to Rs 9280 crore.
Following are the statistics which give a clear indication of the shape of things to come.Please remember that FIIs have huge stake in ICICI BANK Infact as per FII holding ita a foreign bank and many heavyweight FIIs have gone bankrupt or are on the verge of going bankrupt.I reccomend buy in ICICI BANK only when the price is near its BOOK VALUE.
ICICI management is in the habit of misleading the public.There has also been massive exodus of people in higher management of icici bank.

On Sun, Sep 21, 2008 at 9:17 PM, ramesam yarasi <ramesam@gmail.com> wrote:

dear sir
regarding icici bank do you think that in the next six months to one year is there any possibility(even though it may appear far fetched) that there will be a run on that bank because of any of the following:
1. more MTM losses
2. NPA of the domestic balance sheet getting even worse
3. Furthering Hammering by bear cartel as alleged by its management
4. selling by FIIs because of the troubles in their US or European operations

your veiws on this willbe highly appreciated
regards
ramesam

On Sat, Sep 20, 2008 at 12:51 PM, Padmanabhan R <padmania@gmail.com> wrote:

What to do in this melt down?

If you think of buying a stock for a futurisitic model (say 5 years)
Ranbaxy is a good stock to put in the watch list as it has factored
all the bad news.
 

The following points may be considered as the bad news


(1) Recently, US Food and Drug Administration (FDA) banned the import
of more than 30 generic drugs made by Ranbaxy.
(2) Few months back the Daiichi Sankyo's open offer at Rs 737 for the
control of 20 per cent of fully diluted equity in Ranbaxy would cap
its upward movement for the time being
(3) The Ranbaxy stock has historically underperformed the Sensex over
the past six years.

Ranbaxy may not perform well in the months to come. It could be the
best bet if it comes down to the levels of Rs 200/- and one can expect
a good long term return!

Another stock to look at is ICICI @ around Rs 500/-

It's exposure to Lehman Brothers in the form bond has given the down
sides. At Rs 565, the stock trades at just one time FY09 price to
adjusted book value and is cheap.

Though this stock may look very cheap at current valuation it would
take some more time for the sentiments to return to the stock and one
has to add this stock in the watch list as it has come down more than
60% from its peak price.

Please note that these 2 stocks will take longer time to get good
valuation and it should be bought for 5 years holding

One may remember our call on Colgate at Rs 300+ and it has weathered
all the melt down.The market though had come down from 21,000 to
12,000+ (oops a mind boggling fall of nearly 50%) the stock given as a
safe bet about a year ago has outperformed the sensex!


Happy Investing

Padmanabhan
 

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