07 -ONCE A DARLING, NOW AN EVIL

The seven-part of Series “Once a darling, now an evil”. This series is based on the companies which were once upon a time darling of the market and now, it has wiped out the majority of all those gains. I am trying to put some of the number-crunching facts by which we have identified ongoing issues in the companies and have saved our wealth.

I am starting this part with one of the company is trading in a broad range of steel products which has an all-time high price of ~Rs.307 in 2011 and now last traded price at Rs.0.36.

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On the first instance this company having huge sales and profit growth. This creates a temptation to buy with missing out of the opportunity.

Also, when we look at the debtor days then….

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Reducing… good…

But don’t forget to look cash flow statement….

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The company continuously having a negative CFO.

Don’t just get blinded with growth but focus on cash which is real.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation. 

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