GESHIP - Stock to invest for medium-long term

2021年1月11日

Fundamental pick:
GESHIP( Great Eastern shipping company Ltd)
It's largest private player in providing shipping service( Bulk carriers & tankers) to its clients.

More precise to explain is that they do transporting of crude oil,gas, petroleum products and other bulk dry products such as iron ore, coal,grains, etc. Some of its clients are GOI,Coal india ltd, Hyundai and many others, etc.
Company has 46 vessels, 33 tankers & 13 dry bulk carriers. Recently it has acquired one more vessel in last quarter and another one in this quarters.

Reason for buying this stock:

👉 This sector didn't perform in the last few years due to invisibility in earnings. Also company order book is the lowest compared to past 20 yrs(value reflected in its price). However, worst is behind and we expect good recovery in this sector in the coming months/years. Imagine, you can't trade any commodities/goods without logistics. In logistics, sea logistics is very cheap compared to air logistics. Due to covid-19 and other impacts, no demand in the last few quarters which has already reported by the company in its investor presentation. Going forward, definitely there will be demand in logistics segments once normalcy comes💚💚💚
👉 ROCE & ROE has been improving over the past 2 years 💚💚
👉 Revenue visibility seen for next quarters💚💚💚
👉 Company is market leader in this segment👍
👉 Net profit for the last few quarters has been increasing with increased profit margin 💚💚💚
👉 FII/Mutual funds increased their shareholding in the last quarters ( Remember , biggies won't invest in a company which has no growth future prospects, so 😍💚💚)
👉 One of the main reason i have chosen this stock is that it is highly undervalued. Book value per share is 505 and CMP is 278. Also, Pe is very low compared to historical averages and also comapred to industry. Value bargain💚💚💚
👉 Debt to equity is very low and earning per share has improved💚💚👉Also, high delivery percentage of stocks in the last one month. It indicates investors accumulate for investment💚💚
👉 Company's cash flow is at comfortable levels and able to manage it's future obligations which is very good sign💚💚💚

Negative factors (only negative)❤️:

As mentioned in management commentary, company's sees weak trade demand & supply overhang in the near future which is the only negative but long term future is good for the company.

Technical front:
Stock is trading at 278 levels,it has given breakout with volume in weekly timeframe, however we have seen pullback & taken support. Now, it has started moving. Also, we seen lower lows and higher high after bottomed out. We expect good upside in the coming days.
Short-medium term target - 350+
Long term target - 500+

Tips:
Don't immediately jump into it, as nifty is trading higher any downfall will drag this down. However, invest 40% of your money, remaining 60% @ 240-250 levels.
Take as per your risk 🙏🙏🙏