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Tuesday, September 11, 2007

My penny stock ideas

These are some of the several penny stock ideas that over the last several months i have covered for my Subscribers.Now with u people requesting in orkut to post some of their stories...here they are...There are a lot of scrips which i suggested and with time they have given tremendous return to my esteemed clients.I feel pleasure to present them infront of u all.



1)Scripscan-COUNTRY CLUB INDIA
CMP-25
Code-526550

Introduction-People who want to enjoy the thrill of a club but couldn't get the same chance, as either the membership fee is very high or there is a very long list of prospective members waiting, country club is a very good option. With almost 25 clubs all over India, and a membership of 2.6 lakhs, according to the MD of the company, all the properties are worth approx Rs.220 crs. Apart from resorts, company has a 4 star castle type hotel in Andhra Pradesh and they have just launched a 20-acre wild life sanctuary in Karnataka. The company intends to invest close to Rs.100 crs in the new project. With an aim to have 4 lacs members by the end of 2006, the company is offering memberships at Rs.25000 per member for lifetime. With this payment, the member can chose any club located all over India except the ones located in metros to stay for 55 days every year for free. As all the expenditure has already been incurred by the company to acquire and to develop the resort, any kind of addition in the number of members will add on only to bottom line. And that is the reason why the company has turned around in 2005-06.

With a current market capital of Rs.20 crs and property worth Rs.220 crs, the company has the potential to be a multibagger from the current levels. Discussion with the management shows that the company is very much confident of achieving the membership number of 4 lacs by 2006 that means an inflow of roughly Rs.250 crs.

Conclusion- Country club may just multiply from here to do wonders with your portfolio in the coming quarters.




2)Scripscan-Subuthi Finance Ltd.
BSE Code No. 531841
CMP-11

Story=This is an NBFC having hardly any business.However,it has hidden value in the investments.From our sources we have learnt that there is a company called Indowind Energy which is expected to come out with IPO at Rs. 60-70/- per share.Subuthi is holding 67,71,000 shares of Indowind.If we consider even an issue price 65/-,value of this investment works out to Rs. 44 crs. Equity of Subuthi is 4.85 crs.It means,value of Indowind Investment works out to Rs. 91/- per share. Subuthi Scrip is going dirt cheap at 11rs. Even if we give 40% discount, value of investment works out to Rs. 55/- per share. CMP is not even 20% of the same.It means,there is potential of strong upside in Subuthi.Marketmen are expecting share price of Indowind to be Rs. 80/- within 3 months due to high valuations for alternate Energy Companies (in which case, market value of Subuthi Investment can be Rs. 68 crs.). On a conservative basis, share price of Subuthi should go upto Rs. 35-40 easily in near future.There are many other companies at BSE quoting at very high prices only because they are holding shares of Group Companies.Floating Stock of Subuthi is very low (promoters stake is nearly 70%). It quite a risk free buy which has potential to deliver 100% returns in near future.




3)Scripscan-Apple Finance Ltd.
Bse code-500014
Cmp-4rs

Story-Belonging to Mr. Atul Nishar of Hexaware, it is NBFC. Company has not been in business as it fell into trouble few years ago.Its total liabilities are around Rs. 280-300 crs. In BKC Mumbai,company owns 'Apple Tower' with built up area of around 1.50 lakh Sq. Ft. Prevailing prices for commercial property in this area are around Rs. 25-30,000 per Sq. Ft. It is reliably learnt that some MNC Company is likely to buy Apple Tower for a consideration of Rs. 500-550 crs.It means,that after paying off all the debts, company will be left with cash or more than Rs. 200-250 crs. which works out to more than Rs. 40/- per share.As per knowledgeable sources,company may use this surplus money to enter infrastructure segment We feel that it is worth taking risk by buying Apple Finance Scrip.If the sale procceds get postponed share prices can come down to Rs. 2-3/- level.If, market continues to be good, do not be surprised if share price goes upto Rs. 15-20.So certainly a penny stock worth taking a risk.




4)Scripscan-Confidence Petroleum
bse code-526829
Cmp-1re

Confidence petroleum is merging its private company,Confidence Cylinders and Petrochem Pvt. Ltd with itself.Confidence Cylinders and Petrochem has five LPG bottling Plants and posses the largest cylinder manufacturing Plant near Mumbai.The company has topline clientele comrising oil majors like BPCL, HPCL & IOCL.At present the company has 42 bottling plants spread across various locations in the country and has plans to aggressively establish more bottling plants.Thus after the merger we may see the merged entity coming out with stunning numbers.Khara group(the promoters) has many companies engaged in the buiness of manufacturing LPG cylinders so again these companies can be merged with confidence petroleum to add a lot of synergy.Incase that happens it would be a big valuation booster for the company.At present Confidence Cylinders and Petrochem is having an order book of over 60crs and with current economic scenario where we are witnessing a gradual removal of subsidies and everything becoming market determined, integrated players like Confidence Petroleum would be thrown open big business opportunit yin the event of removal of subsidy on LPG.It would be prudent to note that the company has also informed that it is putting up bottling plants for providing LPG bottling assistance to HPCL at Coimbatore, Roorkee and Chindwara.

Conclusion-In light of the above aspects,Confidence petroleum at 98 paisa or even 1 rupee looks to be a pure multibagger.We wont be surprised id the scrip surprises most people by creating wonders in the days to come.




5)Scripscan-IFCI
CMP=8-9rs
Code-500106

Story=Though IFCI has been on a rough ride over the last few years but recently it has shown strong signs of turnarounding.Its a penny stock and carries very limited downside from the current levels of 8-9rs.On the other hand if it starts to perform each quarter the company is sure to come in value investor"s radar.There are strong rumuors too that it will be taken over by a PSU bank,if that happens too it should move from here.So an exposure in the counter can be taken at the present levels.It would be prudent to note that IDBI was once under the same condition and now as we all known has been rebuilt with some style.In a nutshell IFCI is such a scrip that cariies a lot of potential.




6)Scripscan=Peerless Abasan Finance Ltd.
BSE Code: 511411
cmp=16

Introduction=PAFL is Housing Finance Arm of Peerless Finance. At present, PAFL is a Shell Company with no business as its licence was revoked by NHB. We are recommending this scrip (despite being a non-operational company). As it is getting merged with Shristi Infrastructure Development Corporation Ltd. which has huge infrastructure projects under implementation.SIDCL is the infrastructure arm of the SREI group. SIDCL specializes in development of roads, highways, flyovers, townships, water supply etc.The company has over Rs. 1500 cr. project in hand.It is reliably learnt that company has already got some land in Bangalore recently. Company is also likely to finalize some big projects near Noida and in Rajasthan. Now the Application for merger is pending in High Court. Merger formalities should be completed in next 3-4 months maximum and merged entity should be listed for trading in 4-5 months.We estimate that merged entity may be listed at around Rs. 300-330 level.

Merger details=Existing Equity of PAFL is Rs. 11 cr. It will stand reduced to Rs. 2.2 crs. by reducing face value of the share from Rs. 10/- to Rs. 2/-. Then, 5 shares of Rs. 2/- will stand consolidated in one equity share of Rs. 10/- in the merged entity. It means, share holder with 100 shares of Rs. 10/- F.V. will be left with 20 shares of Rs. 10/- F.V. Thus, effective cost of acquisition works out to 5 x CMP of Peerless,16 Rs. 80/-:

Conclusion-In a nutshell buy the company now at 16-17 and after the merger the listing sud be there at 300-350rs.Since u will be left with 1 share for every 5 shares.The value wud be 300-350/5=60-70...so by opting for the scrip at 16-17 u may just get the price of 60-70 after the merger.

Concern=We are recomending the scrip in view of the merger of it with srishti infrastructure development.If for some reason the merger doesnt go on then the share price can fall drastically.




7)Scripscan-Expo Gas Container
CMP-6
Code-526614

Story-Expo gas Containers limited is an integrated company specialiizing in the field of manufacture of low pressure Gas cylinders,fabrication of equipments like pressurre vessels,heat exchangers,site constrruction of tanks and spheres e.t.c.Its manufacturing facilities are located at Murbad(norrth of mumbai) and r approved by the Chief Controller of Explosives, under Indian Boiler Regulations.Over the years EXPO gas has transformed itself into an organization with most modern manufacturing works with a highly knowledgeable and experienced manpower.

But from the last few years the performance and profitability of the Company was severly affected due to some factors: High steel prices ,Stiff competition, Lack of sources, Huge debt burdern ,Withdrawal from the Indian Oil Corporation, Panipat Refinery-This is mainly the reason for its bad health.Expo received this huge order but due to Lack of resources,high input cost problem, unavailability of Bank Guarantee that this business became unviable and during mid April, 2004 Expo decided to withdraw from the project as it was very difficult to continue with the business.Expo has closed down the Cylinder business till the market improves and this has resulted in drop in business activities, which has in turn, led to drop in turnover.But it is also looking for certain possible avenues for export of Cylinders in Gulf Countries and also planning to diversify its activities into procurement of site projects from Public Sector Undertakings including turnkey projects.

The business prospects for fabrication and site construction activities looks very bright. Expo has received enquiries from many overseas Companies and all efforts are being done to secure business and reviving the Company. Expo is also planning to settle some debts with idbi.If that materalises it will give a huge releif to it.Though the turnover of the company has reduced but still it has gone back to black which is really heartening.The company is striving very hard to increase its topline and is giving a huge thrusts to market its product in the outside world.

Conclusion-Expo is all set to make a comeback.The management of it is one of better management from its peers.With the economy in a move and input costs coming down,Expo can regain its lost glory in the coming days.At 6rs it looks to be one of the best penny stock bargains.




Regards,
ARUN
I can be reached at =arunanalyst@rediffmail.com.

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