After my post about how to find multibagger stocks I got many emails where people wanted to know few more stocks where they can invest for a very long term view and so let me share with you one such stock today which is HiTech Plast.
Let me go about telling you why I like this stock and also what can work against you before buying the stock. The recommendation is purely based on fundamentals and not technicals and for fundamentally good stock you should always opt for a long term view.
So let us start.
- Strong fundamentals with great business – HiTech Plast is into business of making plastic based containers and packaging products for few of the biggest brands in India like Asian Paints, Dabur and others. Visit official website to know more about the business of Hitech Plast. The benefit of hitech plast is purely based on the Indian growth story because more people buy those products more container’s will be needed.
- Cheap valuations – According to IndiaEarnings and moneycontrol.com the EPS of the company is 10.13 and is currently trading at a PE of less than 11. Book value of 45 which means it is available at a price of less than 3 times its book value. There are very few companies who are into such container packaging business but if you consider Supreme Industries they have a book value of less than 30 and so comparatively very attractive valuations.
- Reputed Management – Chairman of Hitech Plast is Mr Aswhin Dani – the man behind Asian Paints.
- Reliance capital has 400k+ shares – Month back Reliance capital acquired 400k+ shares of Hitech Plast at a price close to 120. See the news here
- Small company – As per Yahoo Finance the company has a market cap of only 1.44 Billion which means there will be very few mutual funds and FII’s who would be interested in this stock.
- Low float and low volume – There is hardly any volume being traded in HiTech Plast. As per Yahoo Finance Average volume per day is only 8000 shares.
If you have a long term view and are willing to accumulate the stock in small quantity, this stock can prove to be a good value in your portfolio.
Normally it is always the general disclaimer but HiTech Plast is a very small company with very low number shares being traded and so your action can make the price for this stock to spike and so I think it should be fair for people to know my investment in this stock. I have an investment of over 5 lacs in the stock at a price of 125 Rs and I have no plans to sell it. I have also made sure this article goes live after the market close and so you have ample time to do your own research before taking your decision.