Thursday, February 11, 2010

Hungry Kya ?

Are we Indian’s more hungry than the Americans. Afterall what else can justify the following comparison

Jubliant Fooodworks ( Domino’s Franchisee) -  Dec quarter
Market Cap - 1500 crores
Sales – 117 crores
Profit - 11 crores
P/E- 30

Domino’s Pizza ( US – parent company) - Sept quarter
Market cap - 3000 crores
Sales – 1350 crores
Profit - 82 crores
P/E- 9.74

So we have the Indian company which is just a licensee of the Domino’s brand and doesn’t even own it sells at 3 times PE of the parent company.

I guess one needs to have a appetite for it. I am off on a diet.

Tail wagging the dog - Solvay & Abbott

I had earlier posted about the global takeover of Solvay by Abbott.

I had subsequently posted about exiting my position in Solvay.

What has happened subsequently is very interesting. The Solvay stock has skyrocketed from the 900 mark to over Rs 3000 in a span of 4 months. ( Ooch that hurt me :-().

Lets examine the fundamentals of both the companies.

Abbott - FY 09 = Nov 09
Sales - 766 crores
Net Profit - 77 crores
Market cap - 1096 crores

Solvay - FY 09 – Dec 09
Sales - 243 crores
Net Profit - 40 crores
Market cap - 1555 crores

So we have Solvay which got acquired by Abbott, has nearly 1/3rd the sales and ½ the profit of Abbott but is selling at 50% more market cap.

Interesting case of cornering and ramping up the stock so as to push up the open offer price. Would be interesting to see the endgame.