Just Dial Is it really Free?
I am the strong believer of “Nothing Comes for free- everything has its own Fee”. When I was amateur in the field of investments and trading, Resultwas looking for free information, a free calls result of that was the loss of money. I am not emphasizing on paying some money as a fee. Dedication to work is also a type of fee which is more qualitative in nature than quantitative.
I was so curious to know about the working model of Just Dial. How one can post the free advertisement and seek information for free. I was not convinced about the company agenda about give missed call to get the necessary information. Eventhough I was dialing them for the info, I could not understand their business. I stayed away from investing in Just Dial.
Today when I look back, how the story unfolded over the years, I am more convinced about the idea “Invest in the business which you can Understand”. Even though Return on equity over 5 years is healthy 25%, from August 2014 to Aug 2015 Stock price crashed 60% where as the overall market gave positive returns. Majority of the Brokerage houses, Media experts painted the story that, worst is over and the stock appears to value pick at a level of 750. The Sad story is that within next 6 months stock made low f 375 which is the massive correction of 80% from its high.
Just dial Wealth builder?
Wealth building takes patience and perseverance, where as wealth destruction will happen by ignorance. On 17th Feb 201, Just Dial announced buy back offer at Rs.1550 per share which is 3.5 times the closing price 443 on 16th Feb. The process will open on 25th February 2016 and will close on 10th March 2016.
Management is expecting higher gross margins on its new product JDOMni which will facilitate small business. It’s very important to analyze, Itsthat during its previous product SearchPlus introduction also company had the similar expectation’s true that superior technology can be a Game Changer for SMEs to run their business. One has to remember, there are immense competitions in e-commerce place and technological advance is much faster than anticipation.
The stock price is able to clock 50% returns within 5 days from its lows because of
- The positive news flow
- Contrarian Approach buyers participation
- panic short sellers squaring up their position
It’s worth noting that in any type of investment “Margin of safety” should be primary criteria to enter the deal. At this moment fundamentally and technically I am not convinced about dialing this number as an investment idea. Short term price fluctuations can be used by Derivative players as buzzing stock always attracts huge volumes.
Information presented in the above article is available in public domain and it should not be treated as “Research Report”
Registration Status: I am not a SEBI registered Research Analyst.
As per SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014 and clarifications provided by SEBI “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.”
Disclaimer: I do not hold any position in JUSTDIAL.