I am looking at Cochin Shipyard at current prices. What is your suggestion, should I buy the stock now or wait for some more time?

For the June quarter, Cochin Shipyard reported 11.7% growth in total sales revenues to Rs.735 crore. The net profit for the quarter was up by nearly 14% at Rs.120 crore. The company has a fairly stable business model and its business volume are linked to the volume of trade and the consequent demand for shipping services. The company has been a consistently profit making and dividend paying company.

The stock is currently quoting at around Rs.364 and quote at less than 9 X P/E ratios on an annualized basis. That is a very reasonable P/E valuation to get into a stable business. Also, the stock has corrected more than 20% from its peak prices and that also give you a relative margin of safety in the stock. The company also offers a dividend yield of close to 4% and that offers a support to the price. You can look to buy the stock but don’t expect great price appreciation. You can get market type returns with an attractive dividend yield of 4% on top of that.

Its good for long term point of view but since the market is in downtrend investor should be cautious.