Oct 1, 2014

Aro Granite Industries Ltd: Value and Growth Stocks

Aro Granite Industries Ltd can be a good proxy to infra stocks. This is in granite tiles and slabs business of various colors. The Company exports granites mainly to Japan, the United States, the United Kingdom, Germany, Netherlands, Italy, West Asia, Eastern Europe and Latin America.

It is available at reasonable price and is a good company. I think it is a good buy for short to long term. No need to sell it for few years.

CMP = 82.50,

P/E = 6.59,
P/B = 0.80,
P/S = 0.45.

There is light FII shareholding is also there.

It is a growing company and it has a good use in small shops and industry in place of marbles.

Sep 30, 2014

Effect of Stock Split and Why do Companies Split Stock

Here are few points about Stock split and why companies do this.

Stock split increase liquidity of shares. More outstanding shares increase liquidity and thus can help better determice true price.
It does not change company capitalization as total value of share remain shame. It just make Rs 100 bill into two Rs 50 bill.
It can add in sentiment that stock is cheaper and does not affect in any other way regarding valuation of the company stock.

Stock split happens to increase liquidity, make it look comparative compared to peers. Cheaper stocks may look attractive to retail and esp. small investor.
Stock price after split can go either direction and it is not guaranteed that it moves upward. So, do not bank on stock split for gain. See the fundamentals before buying the stock. If stock is undervalued then stock split can bring it into lime light due to news and more investor try to lap it and help make it on higher price. If stock was overvalued before split then it can go down as well.

To avoid sudden share price dip post split, many charts adjust the price of stock with the new price so it does not look that stock has nose dived in the past. After all market capitalization and fundamentals does not change after stock split.