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Sunday, October 22, 2017

Interesting stock market tactics used by companies

The stock markets are a place where Caveat Emptor(Buyer Beware) applies to its fullest. If you come across any of the below tactics, do 
  1. Issue QIP/Decisions just before a major negative event
    1. Money Matters-QIP at peak price just before MD was arrested
    2. Yes Bank-Issue QIP in Q4'17 before disclosing potential provisioning lapse
    3. Axis Bank-MD/CEO reappointment and performance bonus, just before NPA issues
  2. Declare results at a very early date after quarterly closing, to attract attention
    1. Sanwariya Consumer-Declared Jul17-Sep17 results on Oct 3rd, 2017(Remember Oct 1/2 were holidays) albeit unaudited
    2. Kitex-Releasing its audited results for Apr15-Mar16 on Apr 4, 2016!! Surpassed even Infosys. For FY167 however, they released with a month's lag
  3. Delay results/ declare results quite late with some bad news/Extend Reporting year
    1. Axis Bank-When it declared results for Q2'18 showing NPA slippage
    2. Shree Renuka Sugars-Extended financial year to 15months without a clear rationale
    3. Commission research report and upload on website
    1. CRISIL research(most companies) albeit neutral
  4. AGMs
    1.  at remote locations to minimize attendance-Inox Wind?
    2.  at quarter end/latest possible dates to minimize attendance-Many Cos
  5. Glossy annual reports
    1.  by firms like TRISYS to simplify business. metrics
    2. Focus on extraneous stuff-Temptation Food seductive photos of women.
  6. Suddenly start holding conferences presentations, analyst calls etc, but stop it when bad times happen. For example
    1. Sanwariya Consumer sudden spurt of presentations, reports
    2. Educomp ceasing to update its website after bankruptcy
  7. Announce plans with limited execution 
    1. DCB Bank retail expansion-subsequently rolled back due to resistance and ESOPs repriced to adjust for this benefits
    2. Crompton Greaves-Plans to turnaround/hiveoff units but not done