Which 2 multibagger stocks is Fort Share betting on?

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Aashish Tater of Fort Share Broking, in an interview with CNBC-TV18 spoke about two of his sure shot multibagger stock ideas Sandesh Ltd and Galaxy Entertainment .

Below is a verbatim transcript of his interview with CNBC-TV18's Mitali Mukherjee. For the complete interview watch the accompanying video.

Q: Give us your views on the media stock Sandesh Ltd?

A: Sandesh Ltd is a Gujarat based Patrika Samachar. It is the second largest regional daily player after Gujarat Samachar. A look at the financials of the company shows that they have actually lent out close to Rs 85 crore to the promoter group Sandesh Procon Pvt Ltd.

Along with that, they are sitting on cash equivalent close to Rs 120 crore. That means at the current marketcap, the company is having almost 70% in terms of cash and cash equivalent. The company has four printing presses available. They distribute one million papers on a daily basis.

They are a sure shot multibagger from current levels in the sense that the company can easily give 40-50% in a very short span of time because we feel that the promoters can actually come with an open offer. Last time they came with an open offer close to Rs 185 but the company did not get a tremendous response. Now, Sandesh Procon Pvt Ltd is about to complete its real estate projects. I personally feel that they can be merged if the stocks of the company are bought back by Sandesh Ltd itself.

If I see its four properties in Bhavnagar, Rajkot and other places, I feel the stock is definitely undervalued from a core business perspective. On a longer-term, the stock should test close to Rs 500 which is almost 60-70% upside. But at that point, if the promoters make a move to merge the Sandesh Procon Pvt Ltd company with itself, the stock could be a true multibagger.

So they are available almost close to their cash levels. They have the potential to become a multibagger because of promoters who have been consistently doing good for the company. If I see their financials, it would post close to Rs 45-50 of EPS for this fiscal. That means the company is available at a PE of 6 times going forward.

From a year's perspective, they would be available at the current cash levels itself. Plus, this is the potential upside of the real estate business getting merged in some ratio with the promoters. That is why the stock came out with an open offer sometime in 2007. Now they are available almost close to cash levels, has a potential upside with limited downside. We feel the stock should be bought at every dip from a longer-term perspective.

Q: The second stock you have picked out is Galaxy Entertainment?

A: Galaxy Entertainment is a concept stock from our side. There is nothing to suggest that the company should be trading in a multibagger perspective. But, yes, if someone takes a call on the core business, I feel this is one lifestyle product that should be part of one's portfolio. Pantaloon, at one point in time was available close to Rs 50-60 and it became a true multibagger.

Now the same promoter of that group is actually promoting this particular stock which was bought back in 2007 by other promoters of the company. Right now when I see the business of Galaxy Entertainment, I feel this can be one stock which would definitely be hogging the limelight in 2012-13 perspective. The company owns Sports Bar, along with three resto-bars and Lush in Mumbai.

With these kinds of restaurants and the lifestyle business changing, the total roll play for the company we feel that they can be a true multibagger. Now if I see the total potential of the company, along with the economy, the stock can actually do a business of 10-15 times from hereon.

I was looking at it from a US economy perspective where these kinds of lifestyle sports bar businesses actually become multibaggers both in the US, UK and in Australia. There is nothing to suggest as of now to buy the stock from a short-term perspective. The stock can bore the investor for another one-two years but this is one stock which we would be definitely looking at because Pantaloon promotes the company and they will definitely chalk out some good plans.

If I see the Phoenix Mills property arrangement that they have got with the Ruia's, all the future expansion will come to Galaxy Entertainment. Thus, this is one stock, which will definitely hog the limelight. I was just looking at their projection in terms of percentage to the total lifestyle business that the company can get. Even if I mark through a 4.5-5% potential for the company in the next five-six years, the stock can easily trade Rs 400-500 but that is a longer-term call.

If the company does not go through the proper expansion, the story would be derailed and it would be available at the same Rs 20-25 mark, but on the longer-term, the stock is a true potential multibagger and should be bought in a very small quantity as of now. Let the promoters actually go through those expansions that we have seen in the US, UK and Australia then we can buy more at upper levels. However, taking a bet at current levels the stock might not give returns in the shorter-term perspective.

All the stocks recommended today have been recommended to our clients thus we have vested interest in the stocks. Galaxy Entertainment is one stock, where I would like to give a very cautious call because I feel that the stock can easily trade in that Rs 18-35-40 mark for the next one-one-and-half years but if someone actually looks into the prospects of the business this is a true multibagger from a very longer-term perspective.