MULTIBAGGER

I've written about paradyne infotech in this blog a couple of times. It had since appreciated to 699 before falling back to 219 again in the current meltdown of the  markets. However, its profits are increasing at a rapid pace and it might very well report an EPS of 75 to 80 for FY 2009 and an EPS of 150+ for FY 2010. It is a rapidly growing technology business in the field of RIM, implying that the market should discoint it by 15 times at least, once the dust settles and sanity returns. This should give a share price of 2250 by April 2010, i.e.  18 months from mow, it can be expected to appreciate almost by ten times. Truly a multibagger. The new name of the company is Glodyne Technoserve. Very rarely are such excellent businesses available at such a low price. It has also recently bagged a contract from the Bihar govt. for implementation of the NREGS . Once it successfully executes this assignment, it should pave the way for bagging similar assignments in the other states, thus expanding the business. Moreover, it is scouting for a suitable  acquisition in the RIMS space. In the current recessionary environment, it should be able to acquire a company at a discounted price.

My view is that because of the limited floating stock, market players are using this phase to accumulate this stock. The promoter group holds 68 % of the equity.Further 35 shareholders hold around 10 % of the equity. This leaves just 22 % of the total equity of Rs. 11 crore as the floating stock. The market players are hammering the stock price so as to frighten the small investors out of this stock. The smart investor, who does not allow his mind to be swayed by market swings, will reap handsome rewards by staying invested through the bearish phase.