Wednesday, November 12, 2008
Gateway eroded by 57%
On September 13th, 2008 I had posted a blog about exiting Gateway Distriparks due to the negative cash flows the company had and decrease in future earnings and EPS based on a VIH analysis. The stock since then from a level of Rs 170 has fallen by more than 57% to Rs 73. I would still stick to my call on exiting the stock and not buying even at current levels. The results for the coming quarter will provide better insight into company's future potential. Until then, i would suggest staying away from fresh positions in the stock.
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What is a VIH Analysis?
VIH is Value In Hand which takes into account cash from operating activities and deducts tax and the cost of capital, thus taking into account only the net cash position contibuted by the core business.
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