Coal India Limited (CIL) would be a safe stock to invest in if it priced in the indicated manner that is a $33 Billion Market Capitalization.This stock won’t be a multi bagger but would offer decent price appreciation with almost no downside risks.At trailing P/E of 15x and 3 year average trailing P/E of 20x,the company is not expensive given its competitive strengths.Its dividend yield would be around 1.5% with growth of around ~10-12%.However if you exclude $8.5 Billion in Cash,then the stock seems cheap at around trailing P/E of 11x.It has a P/B of 6x and P/S of around 3x.With its ASP being at a 65% Discount to the International Price,the Company has a huge moat around its business model and I would recommend it as a Buy.
Reliance Industries is known to have one of the smartest management teams in the country.The Reliance Group led by Mukesh Ambani is well connected with proven record in executing huge projects in the Oil and Gas Arena.However outside of their core competence,the Group has suffered.Its Retail Entry has not been much of a success despite big bucks being poured in the last 3-4 years.It entry into marketing of oil based fuels has also meandered without going anywhere.Now the Reliance Group has announced an entry into the Hotels Sector by acquiring a 14% stake in East India Hotels at a significant premium over the market price from the promoter Group.This ~$220 million investment is totally unrelated to Reliance’s activities and make no strategic sense.
Norway has been hailed as the toughest cutter of Greenhouse Gas Emissions amongst the devloped countries promising to cut Carbon Emissions by 30-40% by 2020 from the 1990 Levels.Compared to this USA has promised a measily 17% cut from 2005 levels and the EU only 20% by 2020 from 1990 levels.Norway’s cost of cutting emissions […]
Reliance’s Strategy in Shale Gas makes a lot of sense.The Technology is but new and unproven on a long time scale.There have been concerns about the environment impact of Shale Gas Extraction.Also low Gas Prices due to the GFC has made the industry growth slowdown.This is a good time to buy Shale Gas Assets relatively cheaply as Economic Recovery will again see Fossil Fuel Prices heading up.
The Green Indices have sharply underperformed the broad market due to a combination of several factors.These are High Competition in Solar Energy,Declining Demand in Wind Energy,Lack of Global Agreement on Climate Change and Slow Growth of Smart Grid Technologies.With developed governments facing pressure to cut fiscal deficits,green investments are also expected to get hit from government stimulus plans.However India and China are the two bright spots in an otherwise bleak Green Investing Landscape.Both countries have a Prodigious Energy Demand which is still growing at a rapid clip.Despite their reliance on Coal and other Fossil Fuel forms,both countries realize the need to promote Renewable Energy.
The Tres Amigas Facility will be the first of its kind in the world and would be profitable allowing sale of power between the Three Grids.This unique initiative has received support from numerous stakeholders like utilities,transmission operators,Green Energy Suppliers etc.Extreme Power has been selected to provide Energy Storage Facilities and Energy Management Technology for this project.If this project gets built it will lead to the building of similar such facilities in the rest of the world and be a big boon in the quest of Mass Adoption of Green Energy.Note this Project seems to deserves a DOE Grant much more than the Billion Dollar Loans to Abengoa and Solyndra.