Skype-Verizon deal, Death bell for the traditional phone business?

The deal struck by Verizon Wireless with the internet calling service provider Skype is a landmark deal in itself. This is also the starting of a new era of internet revolution in to the mobile space. For the last two decades internet has changed the way people share data and information with each other using computers. Now internet is set to change the way you communicate or talk over the phone.

At some point of time, like how internet transformed many businesses over time it is all set to transform the communication industry. Many people describes it has the start of the end of traditional phone business where powerful operators with their closed network dictated terms and conditions on how you talk and what applications you will have over their network. Yes it is slowly happening the “Internet is killing the traditional Phone business”.

Option Strategy Follow-up (Feb -22)

This is the follow-up of the strategy discussed here.(Maximize Your Returns using Options)
On Jan 29 I have these options in my hand (See the post on Jan 29 here)

4600 Put option at a premium of 70Rs (x number) (breakeven 4530)
4500 Put option at a premium of 35Rs (5x number)(breakeven 4465)
4400 Put option at a premium of 23Rs (10x number)(breakeven 4377)

The current value of these options are given as under

25th Feb is the expiry date of all these options and I expect all these options to expire unexercised (i.e. reach the value of zero). Nifty current value is 4856.

What is the strategy for this month?

Geodesic Ltd, Prepare for the next revolution!

Introduction

It is very difficult to analyze a highly innovative company which operates in a highly competitive, fast changing and highly unpredictable business environment. The risk and reward are very high in such a scenario. You could argue that we should be avoiding such companies. However even that could be difficult when the company in question is making all the right moves and has a very innovative, progressive, efficient and shareholder friendly leadership.

The company in question here is Geodesic Ltd a Mumbai based software product and Solutions Company focused on the convergence of media, mobile, and entertainment. The reason why it is difficult to predict what will happen in this field is because of the rapid change in technology and business priorities of the future. The convergence that I mentioned above will be effectively used mostly by new age companies and business whose revenue models are changing very fast.

But what makes the company promising is the fact that so far the company has done very well in managing this innovation led growth and also seems to have the right kind of products which could catapult it to the next level. In all these years the company has done huge investments in making not the right kind of products but to make the right kind of technology stacks using which it could make the right products / offerings which is relevant to the current and future business environments with very little effort.

Sulzer India , An MNC going cheap?

Key Investment Highlights

• Sulzer India is a subsidiary of Sulzer Limited, Switzerland, is a part of Sulzer Chemtech Business Unit of Sulzer Corporation
• Sulzer Ltd holds 80% stake in this company.
• Very low equity of 3.45Cr
• Highly conservative and quality management.
• Good dividend paying track record (350%)
• March FY10 EPS will be in the range of 110Rs.
• At 800Rs this MNC stock is trading at a PE of less than 8 and a Market cap of 280cr.
• Debt free company with a cash of around 55Cr in its books as on March 2008.
• One of the major players in the Indian market who can provide technological solutions for Mass transfer technology requirements for a wide variety of industries like Refineries, Petrochemicals, Chemicals, Gas Processing, Fertilisers etc.
• The company also addresses the export market mainly the growing demands in the Asia Pacific region through Sulzer Chemtech channels in the regions.
• The company should do well with the progress of Indian economy and in general with the progress of Asia pacific region.

Introduction

The key investment highlights listed above are too good to believe which makes one think why this company is still trading at these ridiculous valuations. So let me start this post with a caution note and all the grey areas when you invest in this company.