Cash is King: Coral India Finance and Housing.

Bombay Stock Exchange

Ticker Symbol: CORI.BO

Currency: Indian Rupee

Data as of 13 December 2024

Theme fundamentals:

⦁ Cash/Total Capital: 64.6%

⦁ Current Ratio: 47.1%

⦁ Total Debt/Total Capital: 0%

⦁ Return on Assets: 10.7%

⦁ Levered Free Cash Flow margin: 25.3%

Brief insight

Many “Cash Is King” stocks are undervalued and show a downward trend despite their very good cash flow and position. Most investors are Momentum players and not Mean Reversion players. This is because it is easier to predict Momentum than Mean reversion. Therefore, “Cash Is King” stocks are often overlooked or not keyed in as criteria for screening. However, value players stand to gain the most by being in the opposite direction of the market when in time to come, sheer fundamentals of cash and balance sheet of such stocks eventually cause their share prices to rise. And CORI.BO is an example.

In such cases, Support is a call to buy in, and not a call to cut loss. Resistance is a call to take profit or re-allocate portfolio position.

1-20 steps ahead forecast trend

For a theme like Cash Is King, the 1-20 steps ahead forecast trend are not relevant. These are slow-moving, sometimes illiquid stocks, meant for buy-and-hold. Eventually, the cash flow factor will surface and exert itself, and investors will pile in. So a downward trend for the next 20 days is not a concern. The very wide 75% band is typical of many companies listed on Indian Exchanges-a non-mature Exchange with many retail investors, who treat stock trading as a game or gamble and investing decisions are made based on rumors, friends' recommendations, rising the coattails of famous investors, politicians, movie stars etc.

Support Resistance and Risk

Support at 5% Quantile: 45.48

Resistance at 95% Quantile: 51.84

"The Durbin-Watson Test for the fitted model yielded a value of 2.41, indicating that the residuals are largely independent and exhibit minimal autocorrelation. This supports the validity of the model's assumption of error independence, thereby enhancing the reliability of the predictions. The DWT value reinforces the robustness of the model for predicting the stock's future performance."