This is an area of Fundamental analysis and finding stocks which have huge intrinsic value.
Holding companies generally quote around 30-50% of the valuation of their holdings. In many cases this stocks would also go to 10-20% where in they could get interesting. Also many of the holding companies do not have business and only income is through dividends/payouts.
As majority of the core holdings are into group companies there is hardly a chance of liquidation of assets or stake sales which may suddenly boost up the valuations. So these stocks should be mainly defensive picks and one can only expect 20-30% upmove in 1 year in line with market sentiments. As downsides are limited the stocks become interesting for safe players.
Earlier i had made my call on J K Agri genetics and Maharashtra Scooters. In the two Maha Scooters is up 40% from recommended price but J K Agri is up only 5-10% !!!
So things take time to give returns in this space.
Again listing a few stocks !!!
J K Agri genetics / Bengal and Assam Company Ltd / CHI Investments
Now lets get into the details of all !!
J K Agri Genetics
As per the data available on the exchanged J K Agri holds major stakes in all J K group companies.
This roughly constitutes to around 90 cr in J K tyres and 50 cr in JK Lakshmi Cements.
Overall the company has 180-190 crores or more of holding value. Apart from that such a holding would generate some amounts of dividends.
Company does work in the Seeds which is an interesting business.
Current Market cap of the company : 60-65 crores. So its quoting at 30% of holding value. But it also has a business which could have some more value.
Investors looking for 20% or more annual returns should buy at 180-150 zone.
Bengal and Assam Company Limited.
This is the main holding company of the J K group with majority stakes.
This is much more value as apart from the listed J K Group it also holds many other investments !!!!
If i were to take those calculations it would take me days to do that. Listing down few important points.
1) Current Holding Value in JK group companies - 350 crores.
2) Holdings in other group companies which hold JK group stocks - namely Fenner India which cannot be valued.
3) Other quoted investments in equities/MFs and some unquoted investments
4) Apart from that there are many subsidiary companies which may be in other business.
Search more for details in the annual report link - https://www.bengalassam.com/25%2008%2009.pdf
Current market cap : 145-150 crores
I would expect the valuation of holdings would be anywhere between 350-650 crores. Apart from that there could be certain value to subsidiary cos and more to dig into this company.
Investors can look to accumulate the stock between 175-150 with a view of 20-30% or more in medium to long term. Stock can surprise heavily on the upside too 🙂
This is yet another holding company which is quoting at a discount. Will soon put up a detailed view.
This stock can also appreciate by 20-30% in the long run.
Also in good times these stocks can surprise on the upside. Last bull market saw JSW holdings, HB stockholdings and many such cos shoot up.
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