Skip to main content

Buzzing Stock - Jubilant Foodworks

dominospizza-masterandstudent
Jubilant Foodworks is flying all around the place and hit an all-time-high of Rs.807, recently. The company came out with an IPO at Rs.145 in 2010, later listed around Rs.200 and it is currently trading at Rs.800. What's buzzing around ? Is it just the momentum or is there any extra flavor to this stock?

The company, known for its popular brand Dominos Pizza, has more than 50% single store cities. In 4QFY11 it entered new cities such as Patna, Bhubaneswar etc. These regions present huge opportunity for penetration-led growth, success of the product in these cities would be a key factor to watch out for in FY2012E. Currently 65% of sales are contributed by top seven cities and 50% of stores are located in Maharashtra, New Delhi and Karnataka.

The company currently trades at more than 50 x 2012E Eps of Rs.15 , which is on the higher side.The company's business model is good and there is huge growth opportunities for the company driven by changing demographic and socio-economic factors. Despite the strong near-term earnings forecast and favorable view, the current valuation of the company (PE of 50X FY2012E), the stock is expensive and one could book profits at current levels. Though, the momentum could take it higher, it would not be in the taste of retail investors to buy at these prices.

Labels:

Popular posts from this blog

Historical Sensex Returns Updated - 2024

Historically Sensex has given returns of about 15% per year, despite volatility and price fluctuations of about -20% to +60%. The following table shows S&P BSE Sensex historical data - start  & close values and the yearly returns of the sensex from 2000 to 2024. So far during the year the   index has hit an all-time high of  75,124   and despite markets hitting all time highs not all stocks make all-time highs. There are many stocks still below their highs. Stocks like HDFC Bank, ITC, Asian paints are still well below their highs and some of them have given low returns over last 3-5 years. Individual or Retail investors can achieve consistent returns through investing via mutual funds , whether it be active or passive. Chasing returns from individual stocks is futile. Be a wise investor !
Read more

Tracking Difference in ETFs and Index Funds

 As we all know, an index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Nifty 50 Index. Tracking difference is the discrepancy between Index Fund/ ETF performance and index performance. Below is the ETFs and Index funds with high tracking error.  The above tracking error is since inception. ETFs and Index funds are considered to be low cost, but in here in India, the tracking difference are quite high and add to that expense ratio, the total works out to over 1-3% and higher in certain cases.  These ETFs and Index funds are no longer low-cost as one would expect them to be. 
Read more