SYNCOM FORMULATIONS – WHY DO DAMPING DOWN THE INVESTOR EXPECTATIONS

Company Name: Syncom Formulations (India) Limited.

Sector: Pharmaceutical

Current Market Price: 1.95

With market Capitalization of 155.35 Crores, this Mid Cap. Stock on BSE is a very attractive pharma pick due to its low price as well as the consistent year on year (YOY) profit growth rate. The recent ripples, it created in terms of trading volumes is really attention paying.

Falling price scenario really gives, a good opportunity to the bears to gain at the cost of bulls. Each and every time bulls try to take the price up to the next possible high level, bears try to pull it down to accumulate. They accumulate at the lowest possible price and sell at the highest. Hence Bearish Mode is best for Bears to gain at the loss of short-term bulls. Wooing bulls with targets is the strategy. Got it!

Syncom Formulations – An Overview

When I bought this scrip as a long-term holding at 2.15 levels in June last year, I thought it’s the last position that the price can move down. I never expected that it will come back again to my buy price. When it started to come back to 2.50 levels in September, the signal bearish signal was confirmed and I sold out all my holdings. That’s a different matter.Again on March 29th, I had little hope about its bullish startup. No need to say, what happened.

Technical Analysis

Technically, it has surpassed all the stages of its bullish trend. But, there are chances that, the Bulls may take it to up to certain level at their cost, but it may not sustain that position for a long while.

A screen shot of 'Syncom Formulation (India) Ltd. stock price chart.
Syncom Formulations Price Infographic Chart Pattern for the Last 17 Years

 

Here I would like to memorize the best saying of Dr. Alexander Elder, a professional trader based in New York city and the author of  ‘Come into My Trading Room’.

Each price represents a momentary consensus of value of all market participants – large commercial interests and small speculators, fundamental researchers, technicians, and gamblers- at the moment of transaction – Dr. Alexander Elder

The above saying of Alexander Elder, directly saying that the current market price of Syncom Formulations is the price decided by all the above said market participants. Whereas, fundamental Analysis only reveals the fundamentals of the company vis a vis its stock.

Fundamental Analysis

Company overall fundamentals are good, as described by many Credit rating Agencies. But, what is that financial factor, that’s driving the stock value to its previous lows is the factor to discover. Let’s start.

Promoter Stake: 41.22

We can say that it’s a good percentage and can’t count into that of low promoter stake category.

P/E: 13.43

Healthy. Good for short term traders to trade and gain.

Book Value: 1.39

Close to current Market Price. This is the price, the stock is running down to touch soon.

Dividend Yield: 1%

Good to say percentage. Nevertheless, the falling stock price may not hit back the long-term investors with the satisfaction, that a tremendous overall gain can give.

P/B: 1.44

At 1.2 levels, there is a chance to its push back. Whether it sustains or not depends on the company performance in the near future.

EPS: 0.14

Last but not the least, the EPS is the main factor in deciding upon the stock value. As long as the EPS is low, irrespective of profit growth rate the stock value falls to continue.

Earnings per share /EPS plays a vital role in stock analysis. EPS is considered as a main financial ratio and the symbol of the potential growth rate.

Strategy

Trade around, if you are able to track and follow the operator. Don’t invest further /SIP in as a long term investment. If possible sell half of the quantity and buy GTL Infra. Will trade around 100 by 2020.

All the above said analysis is based on the current Profit Growth Rate and Earnings Per Share calculations. If the company bags a huge order for any of its products /introduce a new valuable drug, my analysis may fail. I’m not responsible for your ‘ I Missed The Chance To Gain’ complaint.

Hope you people are better understood my perspective of analysis. Let me know your opinion. ‘Leave a Reply’ is waiting below for you to fill up. Jot down a few words.

Bye.

Happy Investing.

 

Hameeda Ghori

Certified Financial Planner And Stock Analyst

2 thoughts on “SYNCOM FORMULATIONS – WHY DO DAMPING DOWN THE INVESTOR EXPECTATIONS

  • April 27, 2017 at 11:36 AM
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    Regards to you for your comment! That’s my energy to write more!

  • April 27, 2017 at 9:36 AM
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    Nice and genuine analysis.. Great work and learning from you…

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