Every bull market contains a lot of increased operator activities, and lot of little known craps becomes operators darling, finally to trap inexperienced & innocent retail traders / investors.
The following article is a selected portion from economic times article.
Courtesy : Economic Times
The following article is a selected portion from economic times article.
Courtesy : Economic Times
Several small caps trading at eye-popping valuations
When little-known Tilak Finance made it to the MSCI Small Cap index, it stunned many on Dalal Street. The company's turnover for the year ended March 31, 2014 was Rs 6.42 crore, while its market capitalisation — value of outstanding shares — was Rs 3,861 crore on Friday. The company's only asset is the 19.2 lakh shares, worth Rs 86 lakh, it owns in Esaar India (not Essar Group).
The inclusion of Tilak Finance along with a couple of others into the MSCI index has put the spotlight on small-cap stocks — many of which are trading at eye-popping valuations. Market watchers said the abnormal values of these stocks suggest operators are active in many of them.
Some interesting ones
It's clear as shown in the table itself that, lot of shares are trading at abnormal valuations without having any background and trading at 3000 to 5000 PE, as a conventional valuation parameter!! The only way to escape from these type of companies is to be vigilant with you investment decisions.
