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However, the current price of Rs 727 seems a bit stretched.
A few days back, Everonn's management had stated in an interview to CNBC that the company should have Rs 81 crore turnover and Rs 11 crore profit in FY 2008.
The company has around 1.385 crore shares outstanding.
Rs 11 crore of profit will mean Rs 7.95 eps.
At Rs 727, the stock is trading at 92 times FY 2008 earnings.
FY 2008 is almost over now.....4 months to go. In next 2-3 months, people will start looking at FY 2009 earnings.
It is difficult to predict forward earnings of such small companies.
If we assume 50% profit growth for FY 2009, the eps would come around Rs 12.
As the company is expected to show strong growth in next few years, it is unlikely that the stock will be available for less than 40 times in the next few months.
It would be a good buy for the long term...if it is available around Rs 560 or so.
You can also look at other bigger players in the same sector like Educomp and NIIT.
Educomp is similar case like Everonn... is pretty expensive compared to its earnings.
NIIT is much cheaper compared to Everonn. (I have not looked at the fundamentals of NIIT...just comparing on earnings).
what do you think of this company ? Will it be a multibagger? based on the last quarter results, I think this is going to be multibagger at this rate. Def it will go up to 400 in 2 years. comments plz.
what do you think of this company ? Will it be a multibagger? based on the last quarter results, I think this is going to be multibagger at this rate. Def it will go up to 400 in 2 years. comments plz.
Everonn Systems looks like a good pick at current prices.
The stock has come back to its IPO price of Rs 140.
I have been holding the stock for some time now. I bought it at 200+ levels.
Everonn Systems is poor man's Educomp.
Both companies have similar business model, but currently Educomp is showing better growth.
Still Everonn's valuations appear better to me.
Everonn System is trading at something like 8 times last 4 quarter's earnings and Educomp is trading at 27 times last 4 quarter's earnings.
I am surprised that the stock has fallen back to its IPO price. I hope there are no corporate governance issues with this company.
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This is the problem with many smaller stocks today.
FII's want to exit, but there are no buyers in the market for smaller stocks.
Any above-average selling leads to a price crash.
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Alchemist, in the past, FII's used to restrict themselves to large-cap, "blue-chip" stocks. But, in the course of the 2003-2008 bull run, they seem to have become very adventurous. If you remember, the type of stocks that showed up during the Bear Stearns sell-off surprised a lot of people.
Presumably, there's a lot more selling left in mid- to small-cap stocks if one assumes that FII's first sold stocks in which they could book profits.
Presumably, there's a lot more selling left in mid- to small-cap stocks if one assumes that FII's first sold stocks in which they could book profits.
I don't think FII's think that way.
Only retail investors refuse to sell at a loss.....
In many cases. FII's dump those stocks first where there is liquidity to absorb the selling without significant price erosion.
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Many small-cap and mic-cap stocks are over-owned by FII's.
e.g. Consider a stock that has 30% FII ownership held between 10 major FII's.
Now, even if one FII decides to sell the stock, the price will crash. The reason is that there are no buyers in the market and it is not possible to sell 3% equity in smaller stocks without significant price damage.
For large-cap stocks, there are still buyers and it is possible to arrange "bulk deals"
Indian mutual funds, insurance companies etc are still buying, but theh are not interested in smaller stocks.
When TCI Cyprus Holding sold 2.25 crore shares of IOB, LIC picked up 1.5 crore shares. It was an "arranged deal".
Is it good to enter in this script now for a bounce back on Monday?
There is no history to see next support so i am reluctant to enter...
Then I have Pyramid Saimira still bleeding on my profile......I look at it and laugh at it... What a mistake and what experts we are....there r smarter guys out there!
Is it good to enter in this script now for a bounce back on Monday?
There is no history to see next support so i am reluctant to enter...
Then I have Pyramid Samira still bleeding on my profile......I look at it and laugh at it... What a mistake and what experts we are....there r smarter guys out there!
If history not available then how new is this company and what book balance sheet says?
You did not get out of Pyramid at the time of circuit levels? Well I through it at 41+ with a bit loss.
Yesterday, one of Everonn's oldest investors...NetEquity Ventures sold 1.36 lac shares and 1.14 lac shares on NSE and BSE respectively.
NetEquity has been an investor in Everonn Systems since 2000....much before the 2007 IPO.
At the time of IPO, NetEquity held more than 20 lac shares in Everonn Systems.
NetEquity has now sold most of its shares and is nearly out of the company.
(Current holding must be around 50000 shares).
However, one shouldn't be surprised.....that is how venture capitalists function....they invest in new ventures and then sell-out when the high growth phase is over.
Interestingly, these 2.5 lac shares were absorbed by the market without any price damage.
Everonn Systems
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