Geojit buy recommendation : Gujarat Apollo Industries (GAI)

Investment Rationale

Ø GAI reported excellent result for Q4 FY 2008. Net Sales increased by 12.6% to Rs. 49.83 crore. OPM% zoomed to 26.4% (19.7%) mainly due to halving of sub contracting charges to Rs. 94 lakh (Rs. 2.4 crore) Improvement could have been significant but for sharp spurt in raw material cost to 54.1% (49.7%) of sales due to rising steel prices. Further aided by 75.7% reduction in interest of Rs. 27 lakh (Rs. 1.13 crore), PAT (before extra ordinary items) grew @ 36.1% to Rs. 8.91 crore. Extra ordinary income (net of tax) of Rs. 12.93 crore on disinvestment of 49% stake in JV with Johnson Screens Inc, USA , led to 233.6% jump in PAT of Rs. 26.49 crore.

Ø For FY 2008, net sales were up by 14.7% to Rs. 167.01 crore. OPM% improved to 22.7% (19.6%). Consequently, PAT (before extra ordinary income) grew @ 33.5% to Rs. 24.18 crore. Extra ordinary income of Rs. 12.93 crore lifted PAT up by 104.9% to Rs. 37.12 crore. On consolidated basis, Net Sales stood at Rs. 253.4 crore, PAT before extra ordinary income at Rs. 33.59 crore and PAT after extra ordinary income was Rs. 46.52 crore.

Ø GAI designs and produces wide range of road construction equipments. Company offers from rock to roll after services - that is right from crushing till compacting and there are batch mixing plants, asphalt mixers, curbers and pavers. So basically, it is a complete solution chain, which company offers in road construction business.

Ø By adding to product portfolio, company is expanding addressable market. It has entered into technical know-how and licensing agreement with European company to manufacture soil compactors & tandem vibratory compactors. This range of products is expected to start contributing from Q1 FY 2009. This addition coupled with recently added range of crusher and mining equipment will strengthen company's product range. Rollers and crusher range of products have much larger addressable market size and have versatile end uses, de-risking GAI in future.

Ø Government has already embarked on massive road construction projects such as National Highway , Golden Quadrilateral projects, etc. Besides, major policy decision to throw open construction of roads, bridges, airports, and ports to private sector and allowing 100% foreign investment in real estate projects have provided a boost to construction industry. 11th five year plan entailing investment of ~ Rs. 209,400 crore in road infrastructure projects points to strong order inflow. Road construction equipments account for ~ 21-23% of total project cost, indicating huge growth potential for road equipment sector. GAI, which gets > 60% of domestic sales from organised players like Punj Lloyd, HCC, Gamon, etc. will be the major beneficiary.

Ø Continued thrust on export (accounted for 41% of turnover in FY 2007) market has paid rich dividend. GAI has achieved significant market share in Saudi Arabia , African countries, Afganistan , Australia , Bangladesh and Sri Lanka . There is big demand in form of replacement market in EU and US for road construction equipment products. Increased exposure to such markets would improve profitability as margins are better in such projects.

Ø To cater to growing demand, company has embarked on capacity expansion drive (almost doubling capacity) @ capex of Rs. 65 crore in 3 phases, spread over 2-3 years, to be financed thru allotment of 550,000 warrants worth Rs. 9.9 crore to promoters and divestment of 49% stake in JV @ Rs. 25..8 crore.

Valuation

Ø At CMP, the share is trading at 8.75 times FY 2008 actual consolidated EPS of Rs. 30.65 and 7 times FY 2009 expected consolidated EPS of Rs. 38.31. With leadership position in road construction equipment sector with widening of portfolio, entry into mining equipments and initiatives undertaken to enhance exports, company is poised for great future. Hence, we recommend to “Buy” the share at CMP

Kesoram Industries expansion plan

Kesoram Industries Ltd, a BK Birla Group company, is all set to expand
its operations. It will issue bonds worth Rs 500 crore within the next
one and half months to finance a part of its capacity expansion plan.
Speaking at a Press conference here today, Mr SK Parik, director of
Kesoram Industries, said the board of directors had taken a decision
at its last meeting on Saturday to infuse Rs 840 crore for further
expansion of its Uttarakhand tyre unit that includes a radial tyre
plant with 100 tons per day capacity and a bias tyres plant for
trucks.

Murugappa Group plans Rs.1300 Crore capex plan

Murugappa group intends to spend Rs 1,300 crore on capacity expansions
in 2008-09. The group also plans to add muscle to three fledgling
businesses — "rural retail", neutraceuticals and life sciences.

The proposed investments are more than twice as much as last year (Rs
580 crore). Addressing a press conference here today, Mr A. Vellayan,
Vice-Chairman and Director-Strategy of the group, said that EID Parry
would invest Rs 350 crore in a greenfield sugar refinery, coming up at
Kakinada SEZ. The refinery is coming up under a joint venture with
Cargill, in which the Mugurappa group owns 51 per cent.

The refinery was originally planned for a capacity of 600,000 tonnes
of sugar a year, but now the thinking is to produce 1 million tonnes.

Finolex Industries

Finolex Industries, part of the diversified Finolex group, has decided
to sell off its special economic zone (SEZ) plot at Chinchwad near
Pune. It is close to signing a deal with a US-based developer to sell
the land for between Rs 350 crore and Rs 400 crore.

VRL IPO

Bangalore-based VRL Logistics (VRLL), engaged in transportation of both passengers and freight, has filed its DRHP with SEBI on 2ND April, 2008 to enter the capital market with a public issue of 2.70 crore equity shares of Rs 10 each, along with one detachable warrant for every equity share allotted in the public issue, at a price to be dediced through a 100% book building process.

The issue will constitute 27.64% of the fully diluted post issue equity share capital of the company prior to exercise of the detachable warrants. The company also proposes to make a pre- IPO placement.

The company intends to list the shares on BSE and NSE and the BRLM to the issue is Edelweiss Capital.
The company intends to use the proceeds from the issue to part finance the setting up of trans-shipment hubs at Gurgoan, Sholapur and Bijapur at Rs 53.96 crores; setting up of booking and delivery office at Gadag at a cost of Rs 4.01 crore and Rs 53.65 crore for purchase of vehicles.

VRLL, a logistics player which operates through the hub and spoke network currently operates from Amritsar in the North to Thiruvanathapuram in the South. Its presence in the East is limited to just one branch in Kolkata. The company now proposes to expand its operation in the eastern region including the North-Eastern states.

The company is into the business of transportation and logistics service of goods and passengers by road. The company’s goods transportation and distribution business is carried across 17states and 7 Union Territories and passenger transport business is carried under the name of Vijayanand Travels in the states of Karnataka, Maharashtra and Tamil Nadu covering 56 cities. The company has 40 branches and 466 franchisees across states of Karnataka, Maharashtra and Tamil Nadu.

The company’s fleet strength as at February end, 2008 was 2,683 vehicles, comprising of 2446 vehicles for goods transportation, 197 vehicles for passenger travel and 40 vehicles for internal use, which includes forklifts, cranes, staff buses, water tankers, diesel tankers, tractors etc.

The company also possess in-house competencies in body designing of trucks, vehicle repair and maintenance. It also has a R&D unit and a software development center which enables the company in cutting cost and increase vehicle efficiency and performance. The company has also entered into air charter business for providing services to individuals and corporate passengers.

The company which forayed into the wind energy business last year, has set up a 42 MW wind mill project at an investment of Rs 250 crore at Hubli. The company is now demerging its wind power business to focus on its core activity - goods and passenger transport. It is in the process of setting up a separate company for managing the wind mill business,

For the year ended March 31, 2007, the company posted total income of Rs 442.93 crores and net profit of Rs 85.20 crore ( profit on sale of shares of Rs 116.50 crore.The profit before extraordinary item was in the negative at Rs 31.30 crore ), as against an income of Rs 356.95 crore and the net profit Rs 5.06 crore for FY06. For the 6 months ended September 30, 2007, the income was at Rs 271.99 crore with a net profit at Rs 9.32 crore.

PTC

Power company PTC India Ltd has reported over three-fold increase in profit after tax to Rs 19.22 crore for the quarter ended March 31, 2008 compared to Rs 5.8 crore in the corresponding period a year ago.

The company reported a 39 per cent increase in profit after tax for whole fiscal at Rs 48.7 crore against Rs 35.09 crore in the previous fiscal, it said in a release.

The Board has recommended dividend of 10 per cent.

Total income of the company during the quarter under review dipped 6.52 per cent to Rs 565.95 crore from Rs 605.40 crore in the corresponding period of 2006-07.

PTC's income for 2007-08 stood at Rs 3,949.02 crore, registering a growth of 4.31 per cent over the last fiscal.

The company has made its foray into wind energy generation by commissioning its first 6mw wind farm project in Maharashtra. During the January-March quarter, PTC raised Rs 1,200 crore through the QIP route and would use the proceeds for enhancing capital adequacy, capitalisation of PTC Financial Services and investment in fuel intermediation.

During the quarter, PTC signed two MoUs for sale of power aggregating to 325mw.


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LIC

The District Consumer Disputes Redressal Forum awarded claim of Rs five lakh along with interest at the rate of nine per cent per annum from the date of repudiation on June 28, 2007 against Life Insurance Corporation of India (LIC) to a widow Raj Rani of Sangrur.

Ved Parkash Aggarwal, the husband of widow obtained Insurance policy on March 28, 2006 for Rs 5 lakh responding to proposal of agent of LIC.

The LIC yesterday also slapped by Forum comprised President M D Sharma and Member H L Sharma to pay Rs 5,000 on account of mental pain, agony and harassment, besides a sum of Rs 1,000 as litigation expenses.

The husband of widow died on June 21, 2006 due to septic shock within a period of two months and 20 days of taking of the LIC policy, but the LIC repudiated claim vide letter dated June 28, 2007.

The LIC contended concealment of facts by deceased claiming that he was not suffering from any disease while signing the papers.

It was also alleged that he didn't took any treatment from any doctor about ailment as mentioned in proposal form.

The LIC claimed that during course of investigation it came to light that the deceased was suffering at end stage of renal deceased since December 2005 besides hypertension for the last six years.

It was averred that during course of investigation the LIC found that the deceased was a chronic alcoholic for last 15 years and was afflicted with diabetes mellitus for 13 years and had also a past history of jaundice in 1973

RMoney to launch Sharia-compliant portfolio

Anil Dhirubhai Ambani Group company Reliance Money has joined hands with Parsoli Corporation to launch its first Islamic Sharia-compliant portfolio management schemes for investors in India and West Asia , says a media report.

"A significant part of India's population has not been offered appropriate financial products in compliance with the relevant religious sentiments," Sudip Bandyopadhyay, Director and CEO of Reliance Money told the Gulf News.

"Sharia-compliant PMS by Reliance Money along with Parsoli Corporation, would enable us to tap this sector and reach out to a large section of such investors," he said

As per the understanding, Parsoli would work with Reliance Money to ensure compliance with Sharia for the relevant schemes being launched by Reliance Money. Parsoli would also market other financial products and services being introduced by Reliance Money from time to time.

"Sharia-compliant investment products need to follow a stringent code of investment guidelines, in line with the religious sentiments. This partnership will enable Parsoli Corporation to ensure that the compliance criterion are adhered to and help Reliance Money market its Sharia-compliant investment products to investors," said Zafar Sareshwala, Managing Director and Chief Executive of Parsoli.

Reliance Money is expanding its presence in West Asia. It has presence in the UAE and Oman and plans to expand its distribution network into other West Asian and African countries, which have significant non-resident Indian population.

Indices seem to be over-bought

The markets ended last week with decent gains on the back of positive news flow, which led to aggressive buying in financial and technology stocks.

The Reserve Bank of India in its annual policy statement left the key rates unchanged, and the finance minister extended the tax holidays for IT companies by a year to March 31, 2009.

The major indices closed above their respective 200-DMA (daily moving average). The Sensex gained 474 points to end at 17,600. Jaiprakash Associates zoomed nearly 17 per cent to Rs 287. Reliance Energy, Satyam, Mahindra & Mahindra, Tata Motors, DLF and Wipro gained 8-12 per cent each. Grasim, however, was the major loser, down nearly 11 per cent at Rs 2,649.

The Sensex has gained 14.7 per cent (2,257 points) in the last four straight weeks.

The Sensex may test 18,100-18,150 levels in the current upmove. The index is likely to face resistance around 17,845-17,920-18,000 this week, while the support on the downside could be around 17,355-17,275-17,200.

The Nifty, too, has closed strongly above its 200-DMA (5,164) at 5,228 - up 117 points. It has gained 12.5 per cent (581 points) in the last four weeks.

While the index has shown strength in the recent upmove, it is now in an overbought zone and the chances of profit-booking are high.

The 9-days RSI (relative strength index) is around 73 per cent and the Stochastic Slow is again showing negative divergence, i.e. %D is above the %K line. The mid-term (50-DMA) and short-term (20-DMA) are also converging around the 4,930 levels.

The Nifty may target 5,460 level in the short-term. It may face resistance around 5,310-5,340-5,365 and support around 5,145-5,120-5,090 this week.

Sensex extends gains, settles above 17,600

It was a cautious and a slightly negative start for equities on the major Indian bourses last week (28 April - 2 May, 2008) as participants were reluctant to build up positions ahead of announcement of credit policy by the Reserve Bank of India.

As a few blue chip stocks declined sharply, the Sensex went down by over 100 points that day. But, the bulls staged a telling comeback on Tuesday after the apex bank left the repo and reverse repo rates unchanged even as it hiked the cash reserve ratio by 25 basis points. Led by bank stocks, equities rallied smartly that afternoon and lifted the Sensex up by 363 points.

Price movements remained extremely choppy on Wednesday as investors turned cautious again. This time around, they appeared reluctant to lap up stocks ahead of the US Federal Reserve meet. While the Sensex lost around 90 points, the Nifty eased by 26 points in that session.

Stock tips on your mobile: Buy Street Call and get Multibagger FREE

The 25 basis points cut in US interest rates triggered a strong rally on Wall Street on Thursday and with Asian markets also surging higher on Friday morning, the bulls had their way at the Indian ring on the final session of the week. Staying firm right through the session, they lifted the Sensex and Nifty by 313 points and 62 points respectively.

Though inflation rose 7.53%, a 42-month high, firm global trend, fairly strong results from some top notch companies and a slew of stock specific stories kept the mood buoyant on Friday. Information technology stocks were among the significant contributors to the market's rise last week. The decision of the government to extend tax exemption till 2010 for export driven software companies triggered hectic buying in the IT space.

While the Sensex gained 474.14 points or 2.77% to 17,600.12, in the week ended Friday, 2 May 2008, the Nifty moved up by 116.50 points or 2.27% to 5228.20.

Mirroring some strong buying in the midcap space, the BSE Midcap jumped 181.26 points or 2.56% to 7,237.47 in the week. The BSE SmallCap index posted a gain of 93.99 points or 1.07%.

Jaiprakash Associates vaulted nearly 17% last week on strong quarterly results. Reliance Energy notched up a handsome gain of 12.1%. Automobile majors Mahindra & Mahindra, Tata Motors and Maruti Suzuki moved up by 8.6%, 8% and 6.9% respectively.

IT heavyweights Satyam Computer Services (11.1%), Wipro (7.7%), Infosys Technologies (6.1%) and Tata Consultancy Services (5.7%) ended the week on a high note.

Realty stock DLF surged 7.8%. Larsen & Toubro posted a sharp gain of 5.7%. NTPC and State Bank of India gained more than 4%. ITC, HDFC, HDFC Bank, BHEL, ICICI Bank and Reliance Industries also closed on a firm note. Ranbaxy Laboratories edged up marginally.

HCL Technologies (13.9%) was the top gainer from the Nifty fold. Unitech moved up by over 10%. Tata Power, Hero Honda, Power Grid, SAIL, BPCL and Sun Pharmaceuticals also ended on a firm note. Zee Entertainment, Idea Cellular and Tata Communications posted marginal gains.

Grasim Industries (down 10.6%) declined on severe selling pressure. Cipla lost a little over 5%. ACC eased by 3.7%. Bharti Airtel, Reliance Communications, Hindalco, Ambuja Cements and ONGC lost 1% - 3%. Tata Steel and Hindustan Unilever ended weak. Nifty stocks Siemens, ABB, Punjab National Bank, Cairn India, Nalco and Sterlite Industries closed on a weak note as well.

Among the sectoral indices, BSE IT advanced by 7.3% last week. Reflecting investor interest for realty stocks, the Realty barometer ended stronger by nearly 7%. The Auto index surged 5.6%. BSE PSU moved up by 4.3% while the Bankex jumped 3.1%. The FMCG, Power, Healthcare and Oil & Gas indices also ended with sharp gains.

Yahoo dismisses MS' bid as 'distraction'

SAN FRANCISCO: Yahoo on Saturday dismissed Microsoft's aborted takeover bid as a "distraction," promising the struggling Internet pioneer is poised for better days.

Earlier in the day Microsoft yanked its proposal to acquire Yahoo, saying the struggling Internet pioneer refused to budge on price despite the software giant upping its offer to nearly $50 billion.

Talks aimed at resolving corporate dueling that began with Microsoft's offer on February 1 to buy Yahoo for $31 per share ended with the two firms unable to close a multi-billion-dollar gap in price expectations.

"This process has underscored our unique and valuable strategic position," Yahoo chief executive Jerry Yang said in a statement posted on the California firm's website.

Aishwarya Telecom Limited IPO

Aishwarya Telecom is an ISO 9001:2000 Certified company manufacturing Test & Measurement Instruments like Mobile Tester, Fiber Optic Tester, Data Tester, Cable Fault Locator, etc and not only in the manufacture of Optic Fiber Cable. In fact, Aishwarya Telecom is one of the important players in the T&M industry, which mainly supplies its products to major telecom operators. Apart from being a prominent player in the domestic Telecom industry, it is a trend-setter in the Indian Telecom Industry in qualitative terms. This statement stands affirmed with Aishwarya Telecom's group turnover crossing Rs. 35 million in its third year of operation. Aishwarya Telecom provides Services nation-wide to organisations in business, industry and government. With a commitment to using Technology innovatively for providing solutions to problems in Telecom Industry, Aishwarya Telecom has developed equipments which match international standards. The continuous upgradation of skills of its R&D Personnel through a succession of training programmes ensures that ATPL stays near the forefront of technology. Adherence to strict quality standards and acquisition of latest components enables ATPL to provide customers with strategic and cost effective solutions in a fast changing and competitive business environment. Aishwarya Telecom Pvt. Ltd. is a registered member of Electronics and Computer Software Export Promotion Council, New Delhi, India's premier export promotion organisation in the areas of Electronics and Computer Software sponsored by the Ministry of Commerce, Govt. of India.

ATPL supplies a wide range of Telecom and Fiber Optic Products to Department of Telecommunications, Public Sectors and Defence Sectors like ECIL, BDL, Research Centre Imarat etc. in India.

ATL is exporting cable fault locators to countries like France, Taiwan, Czech Republic, Riyadh, Dubai etc.

Objects of the issue :

* Achieve the benefits of listing on the Stock Exchanges.
* Fund the Capital Expenditure for Research & Development of Main Frame Optical Time Domain Reflecto Meter (OTDR) in collaboration with IIT, Chennai.
* Fund the Capital Expenditure for Research & Development of Ethernet Traffic Analyzers.
* Fund the cost of Global System for Mobile Communication (GSM)/ General Packet for Radio Service (GPRS)/Code Division Multiple Access (CDMA) Analyzers for providing Technical Audit Services to the Mobile Operators.
* Purchase land & construct building for new corporate, marketing, administrative and R&D office at Hyderabad.
* Purchase land & construction of building for a new production unit at Hyderabad.
* Meet additional working capital requirements for its operations.

Kiri Dyes And Chemicals Limited IPO

Kiri Dyes and Chemicals Private Limited, incorporated on May 14, 1998, is engaged in the business of manufacturing of reactive dyes which are called synthetic organic dyes used for cotton fabrics like garments, dress materials, bed-sheets, carpets etc. The dyes are of basically colours like black, blue, red, orange, yellow and numerous variants of these basic colours is identified by color index number internationally. The company also manufactires dye intermediates that are used in the manufactiure of dyes. The existing products manufactured by the company are as follows:

* Synthetic Organic Dyes (S. O. Dyes)
* Dyes Intermediates: Vinyl Sulphone
* Dyes Intermediates: H-Acid

The product range of the company comprises of more than 120 dyestuffs used by textiles, leather, paint and printing-ink industries with total production capacity of 10800 MT per annum. Kiri Dyes and Chemicals Private Limited supplies reactive, acid, and direct dyes as well as dye-intermediates in various forms like standardized spray dried/tray dried - powder/granular, crude and reverse osmosis.

The manufacturing facilities of the company are located at Ahmedabad and Padra Taluka near Vadodara. Kiri Dyes and Chemicals Private Limited is intends to expand by backward Integration and in this regard has already commenced manufacturing of Vinyl Sulphone in April, 2006 and H-Acid from March 2007 that gives it a presence in Dye Intermediates business. Company through the proposed project on Sulphiric Acid intends to further integrate backwards and emerge as a dominant player in Chemicals.

Objects of the issue :

* To fund the capital expenditure for setting up of a plant to manufacture Sulphuric Acid, Oleum and Chloro Sulphonic Acid with a combined capacity of 500 M.T. per day adjacent to its existing unit at Village Dudhwada, Taluka Padra, District Vadodara thus enabling backward integration and economies of scale
* To fund the capital expenditure for Dyes and Intermediates Unit located at GIDC, Vatva, Ahmedabad
* To fund the additional working capital margin.

Ambuja

The company declared its first quarter results for the period ended 31st March 2008 and on a YoY basis, it has not been very good. Though the topline increased, the high costs of coal pulled down the overall bottomlines of the company.


YoY, net sales rose 15% at Rs.1654.85 crore. In Q1FY07, the company had a substantial component of other income which came in mainly via profit earned on sale of JV at Rs.240.75 crore while the total other income in Q1FY08 was Rs.40.56 crore. There was also a 31% surge in the operating expenses, of which cost of fuel alone rose 21%. Coal prices have risen from $66 a tonne to $130/ tonne in one year, while the sale price increased only by 3%. Net realization has come down to Rs 3,518 a tonne as against Rs 3,541 in the previous quarter.

The temporary shut down of five kilns for annual maintenance, leading to the company buying clinker at a higher price from the open markets further compounded the problems.To cut down costs on its coal, the company is now scouting around for coal mines in India. That is bound to take some time, once that happens, maybe things will ease for the company.

This immediately had a cascading effect on the EBIDTA, which slipped down 37% at Rs.550.68 crore. As is the trend, interest outgo is always down in the first quarter and thankfully, managed to keep the profit margins afloat. Yet, PBT fell 37% at Rs.483.17 crore and PAT fell down further by 45% at Rs.326.20 crore.

The company, for the year ended 31/12/07, had posted an exceptional gain of Rs.795.52 crore. Of this, when the company exercised its Put and Call option in an agrrement with Holderind Investments, in respect of its shareholding in Ambuja Cement India Pvt Ltd, an associate company, and sold 19.07 crore equity shares for a consideration of Rs.1,061.52 crore, it recognised a profit of Rs.470.16 crore. The put option for the balance 9.54 crore equity shares will be exercised on April 30, 2008 for a consideration of Rs.588.91 crore. So this means that even in the current year, there will be exceptional gains, which will help bolster the bottomlines again!



It has commissioned its grinding plant having capacity of 1 million ton, at Surat. Work has also started in the Q4FY07, on a new 1.5 million tonne grinding unit near Ahmedabad, and a bulk cement terminal at Cochin in Kerala. Feasibility studies are currently in progress for new capital projects totaling approximately Rs.3,000 crore, to be implemented over the next 3 to 5 years.

With inflation being the main cause of worry, it is not expected that cement prices will be “allowed” to rise much higher in the coming days. The ban on cement exports will also have an impact. Q2 might also be tough if the inflationary pressures do not ease. Things should start easing only from Q3.

Triveni Engineering

Triveni Engineering is engaged into manufacture of sugar, co-generation and steam turbines and had changed its financial year to close, ending on 30-09-08. So now, the company has presented results for the second quarter ended 31/03/08.

The company has emerged out of the woods long time ago. Mired in losses during June 2007, the company is now well engrained on the path of profits. For the current second quarter, on a QoQ, the net sales of the company rose 9.16% at Rs.378.53 crore, of which 53% came in via sugar, though it added just Rs.1.13 crore to the bottomline. 37% of the net sales came via the engineering division making steam turbine which added Rs.37.96 crore to the EBIT and co-generation contributed Rs.27.78 crore. So despite sugar being the biggest contributor to the topline, it has added the least to the bottomline. Steam turbine unit remains its largest money earner.

EBIDTA was up 28% at Rs.89.74 crore, PBT rose 44% at Rs.44.46 crore and PAT rose 33% at Rs.34.28 crore.

The writing on the wall is clear – companies which depend only on sugar to add on to its bottomline will continue to suffer but those, having multi divisions, will manage to get by. Triveni was saved only because of its engineering and co-gen units or else it would have wallowed in losses.

One of the great stock market stories of the next generation

The NEW American Super Brand I'm about to describe shows remarkable similarities to Wal-Mart, Nike, and Starbucks in their early days. In fact, this business is right now using the same powerful business secrets that launched these global giants.

A couple of years ago, you could've gotten into this company for about a third of what it costs today. Yet, as impressive as this stock has been recently, we project it will continue growing at that pace well into the next decade.

You see, this stock is still a great buy today. More important, we believe it's going to stay a great buy for a long time. And right now, it's climbing - just like Wal-Mart did in the 1980s - so the earlier you get in, the better. Have a look...

Wal-Mart got on top by constantly inventing new ways of moving the right products to the right customer, at the right time, and always, by the most efficient means possible. In other words, no retailer has ever optimized shelf space better than Wal-Mart. It's the simple business secret that built the Sam Walton empire.

That's why the NEW American Super Brand recently made the revolutionary decision NOT to follow an industry practice of simply renting shelf space to the highest bidder. Instead, they're getting the right products to the right customers by having regional managers decide which products get a test run in stores. Then, only if that product sells well and receives positive customer feedback, will the company make a long-term commitment to carry it...

The customer -- not old, outdated industry practices -- is what the NEW American Super Brand is built around...

Starbucks also became a global brand powerhouse by keeping the customer experience front and center. As a result, people were willing to pay a lot more for a cup of coffee. Now, in much the same way, the NEW American Super Brand is charging premium prices for the right products in an appealing setting... and people are falling all over themselves to pay for the experience!

In essence, the NEW American Super Brand is using -- in tandem -- two of the secrets that built Wal-Mart and Starbucks.

A $10,000 investment is worth more than $4.5 million today

Take Wal-Mart for example. Not long after Sam Walton figured out how to bring powerful consumer access to suburban and rural America, some forward-thinking investors grabbed up shares. The really smart ones held on tight...

Now to billions of people around the world, Wal-Mart is the place you go to buy tootsie rolls, a ping pong table, motor oil, diapers, a microwave, ice skates -- you name it, all at great prices.

What has Wal-Mart's stock done since 1980 (a full decade after it went public) through all kinds of up and down markets... all kinds of inflation... deflation... rising dollar... falling dollar... and a couple of wars?

With shares trading around $51 today, Wal-Mart has risen 467 times in value over the past 28 years. That's 25% annual growth -- every year for over a quarter century!

Let's face it, getting in on a blockbuster investment like Wal-Mart in 1980 was a life-changing event for early investors.

The same can be said for getting into Nike in 1987, just as that stock went on a historic run, making over 5,000% for its early investors.

And Starbucks went from zero to full-blown global phenomenon practically in the blink of an eye - another bonanza for early investors!

American Vanguard Corp.: Pest-free investing

Successful investors accept the world as it is, and don't try to contort situations to fit an idyll of what it should be. Consider farming: for those of us outside the realm, the economics can be as foul-smelling as an industrial cattle feedlot; what, with the subsidies, tariffs and usage quotas (think ethanol).

So what's an investor to do? Eschew the sector or deal with the world the way it is and inhale deeply. We prefer the latter action. From the inside, subsidies, tariffs and usage quotas can be as fragrant as French perfume, and we find the fragrance emanating from Newport, Calif.-based American Vanguard Corp. (NYSE:AVD) to be particularly intoxicating, though on first whiff you might think otherwise.

AMVAC is a small-cap purveyor of insecticides, fungicides, molluscicides, growth regulators and soil fumigants. Although it doesn't benefit directly from government handouts, its customers do.

AMVAC's niche of protecting soil-grown edibles from lower-form freeloaders is a fragmented, diverse market, requiring significant management input and ongoing product research. What's more, it's dominated by mature lower-margin commodity chemicals.

So what's the good news? Large chemical companies tend to be eager sellers of mature lower-margin commodity chemicals, and eager sellers create opportunity. AMVAC's strategy is to acquire these segments from multi-billion dollar conglomerates. In March, AMVAC acquired most of Bayer's cropscience assets related to its facility in Marsing, Idaho.

American Vanguard Corp.: Pest-free investing

Successful investors accept the world as it is, and don't try to contort situations to fit an idyll of what it should be. Consider farming: for those of us outside the realm, the economics can be as foul-smelling as an industrial cattle feedlot; what, with the subsidies, tariffs and usage quotas (think ethanol).

So what's an investor to do? Eschew the sector or deal with the world the way it is and inhale deeply. We prefer the latter action. From the inside, subsidies, tariffs and usage quotas can be as fragrant as French perfume, and we find the fragrance emanating from Newport, Calif.-based American Vanguard Corp. (NYSE:AVD) to be particularly intoxicating, though on first whiff you might think otherwise.

AMVAC is a small-cap purveyor of insecticides, fungicides, molluscicides, growth regulators and soil fumigants. Although it doesn't benefit directly from government handouts, its customers do.

AMVAC's niche of protecting soil-grown edibles from lower-form freeloaders is a fragmented, diverse market, requiring significant management input and ongoing product research. What's more, it's dominated by mature lower-margin commodity chemicals.

So what's the good news? Large chemical companies tend to be eager sellers of mature lower-margin commodity chemicals, and eager sellers create opportunity. AMVAC's strategy is to acquire these segments from multi-billion dollar conglomerates. In March, AMVAC acquired most of Bayer's cropscience assets related to its facility in Marsing, Idaho.

Scrap metal recyclers

Everything from vinyl records to spandex leggings has seen a resurgence in one form or another, and heavy metal is no different. No, not the music genre; we’re talking the recycling of steel, aluminum and tungsten by scrap metal recyclers such as Metalico (AMEX:MEA) and China-based Sutor Technology, Ltd. (Nasdaq:SUTR).

An estimated 90 million tons of scrap metal are recycled in the United States each year, at a value of more than $60 billion. While the United States has become increasingly reliant on other countries for manufactured goods, scrap metal has become a vibrant export market. Domestically, according to the Institute of Scrap Recycling Industries, two of every three pounds of steel produced in the United States is made from scrap.

Demand for ferrous (iron-based) scrap will likely continue to climb because the world’s steel producers are replacing virgin iron ore blast furnaces with electric arc furnace mini-mills that use scrap as their primary feedstock. Electric arc furnaces are more energy-efficient and environmentally friendly, and produce much less air and water pollution. Demand for non-ferrous (aluminum, copper, stainless steel, brass, nickel and other alloys) is also rising. Secondary smelters using non-ferrous scrap can produce metals at much lower costs than primary smelters using ore because of lower labor costs, energy consumption and environmental compliance expense.