Monday, March 22, 2010

Karuturi Global: From Flowers to Food Security

The next stock I believe has the potential to provide good long term returns is Karuturi Global Ltd. The company is the leader in $ 64 bn cut rose industry with 8% market share.

The biggest theme that plays around the probable success of this stock is world's food shortage which the company is trying to meet. For their agricultural venture the company has acquired 310000 ha of land (almost 7 times the size of Mumbai) in Ethiopia. The company will develop this land to produce food crops to meed the ever rising demand in the global market.

I strongly believe at the current price of around Rs 18/share the stock is highly undervalued (trading at a TTM P/E of around 6 ) despite the high past growth rate and strong future growth potential. The only risk one can assign to this stock is the high execution risk, whether or not the management has the ability to handle a project of this magnitude and scale.

Hence, one should add this stock to a long term investment portfolio.

To read a detailed report on this stock please use the following LINK

Happy Investing...!!!

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