Looking for more “cockroach” candidates

by | Feb 15, 2019 | Dear old dad | 0 comments

Pleased with YES and looking for something similar, I come across DHFL. Another stock that has taken a serious tumble, from 400 down to 150. The media story is bleak, management keeps putting up a defense, they haven’t defaulted yet. Meanwhile, the ILFS saga is unfolding, scams in the financials are everywhere. COBRAPOST puts out a story about scams in DHFL, funds being sent to offshore entities. The story writer is well-reputed, of Tehelka fame, the stock dives some more, the Ministry of Corporate Affairs (MCA) is instituting an enquiry. I do some homework, the financials are really murky, I have no feel for the valuations, must confess that I don’t fully understand them. This is another common feature worldwide. Bank accounting statements are notoriously hard to parse!  While waiting for more clarity on DHFL, I exit entirely from YESBANK, “pigs get slaughtered,” telling the one or two believers who bought it along with me.


More news on DHFL comes out, Blackstone Group is interested in talks about taking a stake. Now that is a name I am familiar with, one of the biggest, baddest, savviest private equity firms on the planet. Other such vultures are also reported to be sniffing around. Enough for me to take a starter position in DHFL at 140, though unsure how to even find the cockroaches. Some time later, the chartered accountants who were hired by MCA come out with little evidence against DHFL, dismiss the COBRApost report, the stock does a quick run to 170, and is back down to 140s again in the recent correction. Still waiting.