Saw these highlights of a stock:
- Stock is trading at 4.92 times its book value
- Though the company is reporting repeated profits, it is not paying out dividend
- Company has low interest coverage ratio.
- Promoter’s stake has decreased
- Promoter holding is low: 9.24%
- Though the company is reporting regular profits, it is not paying out tax
- Company has a low return on equity of 2.85% for last 3 years.
The company has a shady past and I am not sure that the future is going to be any different. The promoter holding is a myth because the promoter has taken a long walk after pushing the shareholders off the pier.
The numbers do not seem to match. Interest cost if worked out, seems very low, showing that interest outgoings have been pushed in to some unaccountable corner.
Shareholders are marquee names. So, my analyses is meaningless. Surely they know the company better than the numbers tell. But I like to keep away from such dynamite.