Wednesday 24 February 2016


After our last expose post on Stock Tips Free Trial scam time I hope investors and traders benefited by avoiding such scamsters.

The menace of these tippers has been increasing more and more and to counter that we must build up awareness among Investors and Traders.

There is a new style of scam that is operating in the Market and it is called the EXPIRY SPECIAL.
As and when we near an expiry date of an derivatives contract, e.g. tomorrow 25th Feb is the expiry of February Series of Future & Option contracts there are large number of messages to traders and investors about a Jackpot Call in Options Segment which ofcourse is expiry special and they make claims such as make 10 lakhs with investment of around 20000.

The modus operandi is quite simple: These SMS messages are sent to lakhs of traders and investors, once you call on the number mentioned in the message they would confirm that you will be trading their jackpot call and once you confirm that you are ready to be conned.

To posture themselves as legit advisory subscription beneficiaries they will ask you to share 20% of the profit with them once you have booked it.

On the expiry day the process starts, They pick one stock which is not very liquid in options space, Last time on 28th January 2016 which was the expiry day for January Series these guys picked South India Bank.

South India bank for instance was trading at a price of around 18.50,its the expiry day the 15 strike price put of South India Bank has no volume or pending orders, These guys place a huge sell order for South India Bank 15 Put at 5 paise. Minimum lot size is 22000.

Now the next process is to send the jackpot call to the traders/investors (cattle ready to be butchered).
On a lotsize of 22000 one lot at 5 paise will be valued at 1100 so The Message will ask you to buy 50-100-200 lots of South Bank 15 put options which will cost you only 55000 for 50 lots and the target was more than 50-70 paise in Intraday so that means you are going to gain a return of 900-1300% in Intraday.

Once this message is delivered to lakhs and lakhs of traders, Greedy people will start buying the Put Option.

Remember, the scamsters HUGE SELL order? They are writing the option calls because South India Bank is not going to fall below 15 in the trading day at all since there are no possibilities for it to lose so much when market is stable.

It is sad to know that South India Bank 15 Strike Price January Series Put on expiry day of 28th January had a volume of 3830 lots which means 22000 * 3830 = 84260000 * 0.05 = 4213000 pocketed before taxes and other charges once the option is exercised at ZERO by the exchange.

Yes that is how you they earned 42 lakhs in January and this was their under-performance, In earlier instances these OPTION MAGIC CALLS used to get much more volume say almost 7500-8000 lots, Means these guys made crores.

Urging Investors & Traders to wake up and reform themselves against the VERY IDEA of becoming rich overnight by juggling in risky stuff like options.

I am not saying Trading is BAD, or all advisors are bad, Or All Option Calls are bad, But please do use your brains before jumping into such JACKPOT EXPIRY SPECIAL trades.

Tomorrow is expiry day (25th Feb) and again Jackpot Option Expiry Specials are going to be floated in the market so please beware and don't participate.

Here is a screenshot of the south bank message last expiry :-

Here is a screenshot of NSE BHAV COPY for South Bank 15 Put option on expiry day on 28th Jan showing 3830 contracts traded :-

Thursday 11 February 2016

Associated Alcohols & Breweries Ltd - Multibagger Pick

The Ace Investor
Associated Alcohols & Breweries Ltd
  Listed on BSE: (CODE: 507526 SCRIP NAME: ASALCBR)
Currently trading around 180 with a market cap of around 180 crores.
Promoters hold 58.45% stake.
It has a Debt of around 45 crores.
Total Reserves are around 59 crores.

Established in 1989 Associated Alcohols & Breweries Ltd (AABL) is one of the largest distilleries in India headed by the Kedias of of The Associate Kedia Group.

The company has presence in every aspect of value chain: All varieties of portable alcohols, Country liquor, High quality rectified spirits, Extra Neutral Alcohol, Extra fine triple distilled grain spirit, IMFL in whisky brandy rum gin vodka categories, Bottling scotch whisky for international brands.

Company has great relationship with Liquor Majors which buy almost 60% IMFL produced by AABL and the remaining is used for direct supplies to to branded suppliers across the country, apart from manufacturing its owned brands.

AABL has someone of the top selling brands under its kitty, Top AABL licensed brands are: Blackdog, Smirnoff Vodka, Captain Morgan Rum, HAIG Scotch, Glen Drummond, Royal Crown.

Many of these brands are owned by United Spirits Ltd.

AABL apart from licensed brands also started a range of owned brands like: Mc Gill Whisky, Jamaican Magic Rum, Bombay Special, London Bridge gin, Red & White Whisky.

The company has its facility in Indore.
AABL has chalked out a huge greenfield expansion plan to capture domestic and international demand and serve all the segments of alcohol ranging from country liquors to IMFL. This plan includes setting up a multi-pressure ENA plant, a collector plant, a Reverse Osmosis Water Treatment Plant and a 2 MW power plant.

AABL is setting up a multi pressure ENA plant. This plant will completely replace the older plant and increase our production capacity from the present 42 MLPA to 65 MLPA. The multi-pressure ENA plant cuts down the stages in the manufacture and thus improves process efficiency.

Coming to the financials, AABL has shown great growth :-

As you can see the company has grown at a RAPID pace in five years from 90 crores topline it has come to almost 300 crores and H1-FY16 has been flat which means that the topline bump up was sustainable and now company is going to report results tomorrow which i expect to be good. United Spirits one of AABL's major client has reported good revenue bump up in Dec qtr.

The company also paid dividend for the first time in last many years in FY16.

The management has also approved 1:1 Bonus, final call on Bonus will be taken at the EGM on 22nd February 2016.

For full year 2016 it can be expected that last two quarters should be good, Means EPS of 15+ should be on the cards. 

Liquor sector is really hot right now, United Spirits which is also major client of AABL is trading at astronomical valuations because the brand ownership it has, It is often said that United Spirits after dust of previous management settles can be a significant Multibagger in next few years... All that said about future, AABL is already making money from the brands of USL.

Our earlier pick in liquor sector was Pincon Spirits Ltd which was given at 115 and it has now touched 150+ after bonus of 1:1 meaning it gained almost 160% after catching our attention. GM Breweries is another great story in this sector, Which went from Rag of 100 to Rich of 1000+ in just 1 year.

Irrespective of stock market conditions, In India the consumption theme is one of the best investment themes. One major hype has been Liquor Ban here and there but in reality, Major tax revenue for both central and state governments are from Liquor and Tobacco sector and no one in the world kills the goose that lays the golden eggs.

Promoters hold 58.45% stake, Some 5 Marwadi guys hold 2.22% stake together, Interestingly the regd. office of AABL has been in Kolkata and two Kolkata financial market entities Garnet Tradelink and Attic Dealcom both having same directors hold another 20% almost.

That means almost 80.67% equity out of total 9039600 shares are with promoters and other Marwardis means only approx 17 lakh shares might be left with small shareholders.

I feel Associated Alcohols & Breweries Ltd (AABL) is one multibagger opportunity in the market, with such great growth and wonderful positioning in the value chain it should be trading at really premium valuations on its EPS of 15, assuming 35 times valuations to its EPS would give stock price of 525+.

Key trigger for re-rating could be the 1:1 bonus which will drive liquidity in the stock that can improve the valuations.

At cmp of around 180, The stock is trading at a P/E of only around 12. 

Apart from the fundamentals, Technically too AABL is looking very bullish. AABL is close to breakout of Cup and Handle pattern on daily charts and a key thing to note is that the stock is having a Higher High and Higher Low trend which is really mid-term long-term bullish.

The market has been crashing nowadays and it looks like we are pretty much near the bottom now since if Nifty has to fall further the High Weightage biggies have to crash significantly but that does not look on the cards. Why we chose liquor sector right now is because, This sector is almost recession proof and as they say People Drink in Joy and also in Sorrow.

Note: The above is not a research report but information as available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that i might have Associated Alcohols & Breweries Ltd in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.


Thursday 4 February 2016

New Value Pick

I know everyone is waiting to read about a new stock on the blog.

Now i will share a new stock on our blog next Thursday at 3:20 PM
during market hours (i.e. 11th February 2016)

Fresh Value-Pick is coming up :)

Happy Investing & Happy Reading!