Mold-Tek Packaging came to my attention in March 2014 when I was shortlisting 8 stocks out of thousands of listed stocks…. The more I studied the fundamentals of the company, the more undervalued it looked to me…. and the more I studied the future prospects of the company, the more bright its future potential appeared to me….It was trading at 38 at that time….I became convinced that this stock deserves 10-15 times its current valuation based on its past performance and its future business potential….. And the stock really multiplied 50 times in next 7 years taking 1:1 split and dividend into factor….Its current price of 900 is actually 1800 because management announced split of 1:1 in 2015 ….. I bought this stock because of following positive point
- In 2014, E-commerce or online shopping was picking speed in India… It was very clear that India will switch from Brick and Mortar shopping to online shopping very fast…. And all those thousands of crores of online packages will have to be packed in some form of packaging…. And Mold-Tek Packaging was in the business of Packaging…!!!… And it was coming with new form of Packaging ideas with better material in which it had almost monopoly at that time…. For example In-Mould Label (IML)….So it was clear to me that its profits are going to increase significantly in the coming years… or at least profits were not going to go down in any case… This was the most important factor in my picking this stock.
So, I could not understood why it is trading at so low valuation in spite of good performance and great future…. But as Warren Buffet says – ‘If business does good, stock eventually follows’….. So I was convinced that sooner or later it will reach its true potential….. After 2 months of my buying at 38, Dolly Khanna also bought a big stake in the company at 70…. And as on date of writing this article , it is trading above 1800 effectively (taking 1:1 bonus/split/dividend into factor)
- Disclaimer – I am NOT suggesting anybody to buy at current prices
Happy Investing !!