June 19, 2020 at 4:09 pm #7155
Thank you for sharing your observations with us. You are absolutely right about BCG and Mr Suresh Reddy. They knew what they were doing all this time but market was not appreciating it.
Its great to see BCG venturing into new fields. We should know that our markets don’t appreciate intangibles. Many new generation tech companies are not trading in India. Most of them are private so markets don’t know much about intangibles.
With intangibles, we won’t see the benefits right away. It takes few years for them to give results.
Main example is BCG’s Lycos purchase. Mr Reddy has said that BCG’s business grew 2-3 times more because of Lycos brand. Many people don’t understand this. Even Moderna which is making vaccines for coronavirus was putting all the money to research, look how that helped the company now. The stock went from $15 to $70 in few days. That’s the power of intangibles.
Our markets just want quick results. They don’t want the company to increase the profits many times, they just want small amounts in dividends.
I really hate growing companies paying dividends, I would rather want BCG to increase its profits by 50% instead of giving me dividends now. In the future when BCG has enough cash, they can give double or 3 times the dividend what they can give now.
I don’t want them to jeopardize growth and pay dividends. If they become bigger in the future then they’ll surely give us good dividends. We need to have patience.0June 19, 2020 at 7:20 pm #7159
You are absolutely right about few investors and their attitude. Many people still don’t understand the complexity of few problems BCG is facing. The problem is people take decisions emotionally when they are supposed to take decisions rationally.
I saw all these years people were blaming the CEO unnecessarily, they should understand that he’s also a human being just like us. Everyone makes mistakes and not just Mr Reddy. People didn’t believe whatever he said and they blame him all the time. All the companies in the world face troubles at some point in their journey. There are many examples for that.
Yes, Mr Reddy stumbled few times but people don’t look at the big picture here. It is because of his skills (also his team’s) that the company became a global player.
•Mr Reddy started a tech company when everyone was skeptical on them (after the dot com bubble).
•He convinced many firms to invest with him during the recession. It’s not easy to raise money when there’s once in a lifetime recession going on.
•And he bought many companies during that recession time. He knew that they’ll have long term benefits. Look at ORIDIAN for example, it was bought for just Rs.50 cr in 2007-08 (during recession) and now it’s making Rs.1000 cr in revenue and profits are close to Rs.200 cr.
I seriously doubt that these naysayers have this much talent.
•Then when no one saw any benefit in Lycos, he bought it and made good use of it. After purchasing Lycos, BCG’s business increased 2-3 times.
I have discussed only a few here. There are many others which I have already discussed in other posts.0June 19, 2020 at 7:23 pm #7160
All these years, I saw people without evidence talking nonsense. I had done all the research on BCG but I didn’t share it with anyone. I’m a very private person and don’t like sharing details of my investments.
I started writing on this forum because how much ever the CEO or the company tried to explain their situation people weren’t getting convinced and they were spreading only false information (I’m talking about mmb, twitter not this forum).
They saw only the negatives when they were supposed to view things equally. And because of lockdown, I had the time to write down all the research I had done all these years and I started sharing them here.
Maybe I am biased because I’ve invested in BCG but I tried to be as rational as possible when I wrote many articles in this forum.
I have observed many peoples’ attitude and all I could find was people bought shares looking at the price alone and only a few bought looking at the fundamentals and in that many people think that fundamental analysis means looking at just EPS, dividend and Book Value.
There’s more to it than just these things. Few people while comparing The Trade Desk and BCG were looking at only P/E ratio and Book Value. They didn’t see other important metrics.0June 19, 2020 at 7:25 pm #7161
That is why at first I started comparing BCG with TTD’s accounts payable and receivables. I showed everyone that TTD has more receivable and payable than their revenue and BCG was fairing much better than TTD in many metrics. Only place BCG lags TTD is in growth and I explained that also in detail but many people still don’t understand that and still ask dividends.
They think that dividend is the answer to all but dividend is the worst possible option for a growing company. All big tech companies like Amazon, Facebook and Google don’t pay dividends. Even TTD doesn’t pay dividend. But people fail to recognize that.
Now TCS which is India’s biggest tech company pays good dividend but Google doesn’t pay at all so does that make Google a fraud company and is TCS genuine because they pay dividend? Google has more cash than TCS’s market cap and can buy TCS any time.
If BCG reaches a certain point then they’ll have more free cash coming in. That time BCG can pay dividends without having to compromise on growth.0June 19, 2020 at 7:29 pm #7162
And one thing that I hate about few people is they that start asking for advice on BCG from many idiots on Twitter. They think that those people will know better because they have more number of followers. I don’t understand why they need advice when everything that is needed for analysis is freely available on the internet.
One idiot on Twitter (@singhanoop1985/beating the street) started spreading false information on BCG. He mentioned that he did research for few hours and concluded that BCG is fraud. That idiot doesn’t even understand BCG’s business. All research he did was he saw the balance sheet of BCG and that too only one year’s and also he said he didn’t believe AFFLE was BCG’s competitor because moneycontrol didn’t list AFFLE as BCG’s competitor (what a tool).
I don’t know why people ask advice from these idiots. He doesn’t even have common sense and still few people ask advice.
That idiot even accused few people of pumping up the price. But if we see properly, he’s the one who is trying to change the sentiment of investors. Without any evidence he’s the one who is trying to bring the price down. He’s the operator here.
It took me many months if not years to come to a proper conclusion but that idiot did all the research in few hours. I don’t know how that idiot got so many followers.
That guy thinks he’s better than Warren Buffett but Buffett studies companies for many months and then only he’ll start investing in that company. If that @singhanoop1985 was really successful he wouldn’t sit in front his computer tweeting all the time.
And there’s this other guy Jeevan @capital_artist. One more tool who doesn’t understand the fundamentals but tweets all the time, and he has called BCG a fraud company. Every day that guy tweets 40-50 times. If I tweeted 40-50 times a day I wouldn’t have this much information on BCG. I don’t understand how those idiots without any research on the company call it a fraud.0June 19, 2020 at 8:04 pm #7163
I would always trust a man who built a 2500 cr company on his own from scratch. And I will never trust the idiots who don’t have any job but tweet and influence others and make money by pumping up the price.
As I have said many times in other articles, the stock price can go up anytime but buliding a global company is tough.
Stock trading at Rs.3 can reach Rs.300 in few months but a company making Rs.3 cr in revenue can’t grow it to Rs.300 cr in months.
Mr Reddy, in spite of many roadblocks has made sure that the company’s business was not impacted.
I trust that man and not the fools who see only price.
(I’m not asking anyone to agree with my views, these are my opinions and everyone will have their own)0June 20, 2020 at 8:03 am #7197
Dear Goodman, I have been a member of this group for quite simetime and observing all the msgs. You have done a commendable work by posting your research on BCG. I am also a long term investor and generally remains invested for long. Although, I dint knew much about BCG, but on hearing about the company way back in 2013-24, I did some research on the company from a banker’s point of view and found the company to be very interesting for investment. And, since then , I have been investing in the company as and when I have free funds. I will not talk about the prices and quantities here. I believe in catching boys when they are young. Few examples would be, TVS, when it was making losses in 80-90s and was available at 15-16. Pantaloons in 2000-2001, when it was available at 15-16,BEL, Jai Corp and many mores. All these companies had there roller coaster after my investments and had had peaked at very respectable prices. Does not mean that I was successful all the times. Had had certain investments which failed miserably, like Karuturi, Favor and many more. Summarily, it is not necessary that all investment decisions of someone will right, some may go wrong as well. One need to have patience and keep itself updated about the company wherein it has invested. I am still invested in BCG and I do keep adding as and when I feel the price to be comfortable and have free funds. Keep up the good work friends.1+June 20, 2020 at 11:11 pm #7214
Hi Pradeep, thank you.
All these years I saw people discussing only about price. They think that fundamentals mean seeing only EPS, P/E ratio, Book Value etc. All these are very important but understanding the problems the company is facing is also important.
I saw people blaming the CEO when price went down and making up stories like how he’s controlling the price for selfish reasons etc. If he really had control over prices then he would want it high and not in penny levels.
He has great reputation and when his peers ask him about the share price I’m sure that it will embarrass him and at least for that he would’ve kept the price higher (if he had any control over price).
I saw people were too harsh on him and without understanding his and the company’s problems, they were accusing him of cheating the investors etc.
Seeing all these only, I decided to write this article. I wanted people to know that the CEO is talented and we should appreciate his efforts and accomplishments and support him instead of blaming him all the time.
I also saw many people were appreciating him only when the price went up and whenever it fell they started criticizing him. I seriously don’t understand that logic.1+June 21, 2020 at 9:06 am #7216
Absolutely right Saul. When we look at a business, we don’t only look at the past performances but also do a complete SWOT analysis before we achieve at a decision to take any exposure in the business. This is purely to ensure that your capital and interest is secured. However, in case of investment in shares of the business, you invest for appreciation in the amount invested. For me, it was always taking high risk when the business is either struggling or sometimes some businesses with apparently good financial and business model not being appropriately valued by the market for different reasons. One has to make a choice based on his/her risk taking appetite on the kind of stock, they should take exposure in. Although, I am growing in age, but my investment strategy remained the same as it was when I was 18, catch them young.0June 21, 2020 at 9:14 am #7217
And, on the point of price rigging by promoters, I fully agree with your views and feel that the hammering down the stock price by Suresh Reddy as claimed by many insane boarders is absolutely a rubbish thinking coz, it harms the promoters more then anyone else.0June 21, 2020 at 2:29 pm #7218
I feel that Suresh has immense talent and is good at spotting new avenues and thus the company truly remains ahead of the curve. But I also feel that he has the naivety of someone like Nicolas Tesla but what we want from him is a shade of Thomas Edison. I hope you folks understand what I’m trying to say so don’t take me wrong.0June 21, 2020 at 2:37 pm #7219pranilRegistered Boarder
I have lots of interactions with investors as I work with listed midsized company. I can tell you from my experience that two parameters BCG lack is growth and cash generation. We did talk about constraints for cash generation but I am surprised no one want to talk about it lack of growth. They say ur good for what you achieve last year. I am really concerned that our company has not grown in USD terms in last 5 years despite the industry is growing and all co players in Industry growing. I really want to understand the challenges company facing as we are not able to show growth in last 5 years despite we investing all profits back in business. It is not that I only value immediate returns, it’s good if we know that the investment made in last 5 years will pay off on next 4-5 or 10 years but we should atleast know where we are investing and what kind of return we expect and by when. I know external environment is very hostile and uncertain and there is no guarantee of results. Having said this one can not say, I am investing without having any ideas of returns or timeframe. I have asked question on growth to Mr Reddy in past but he did not share anything and just said market is challenging. I wish to know what these challenges and what is our plan of overcome it. Please think about it, I am sure you will agree to this point. I suggest we all should seek details on this.0June 21, 2020 at 2:42 pm #7220
If it were any other CEO I feel that it would have been very very difficult for the company to survive after being plagued by so many issues that people now realise. He has somehow managed to isolate each issue and deal with them on merit. Let’s take for example daum, if he had buckled under pressure and yielded to their demand by paying them the company would have been so cash strapped that many subsidiaries would have gone Kaput, instead Suresh not only managed to delay by filing chapter 11 but used the same time and money to grow the business to the level we see today. This is very easy for me to say today but in hindsight, three years ago I was questioning his actions as I was only focused on the stock price and not the business aspect of my investment. Today I come out a more matured investor and though Brightcom is my only investment in stocks as of today this experience will help me in making decisions if I later want to diversify. It has also taught me to learn to see things from another person’s perspective.0June 21, 2020 at 2:47 pm #7221pranilRegistered Boarder
Dear Ian, I seek clarity on your below point. And trust me I am asking this because I don’t see any growth in company since filing bankruptcy or say last 5 years. May be I am missing something, so keen to correct myself
instead Suresh not only managed to delay by filing chapter 11 but used the same time and money to grow the business to the level we see today“0June 21, 2020 at 2:48 pm #7222
Dear Pranil, I agree with you there and I too have the same apprehension but I am currently giving the benefit of doubt to the management only because of daum issue. Once this is done and dusted I expect clarity on many issues that we have been asking for for so long. I hope the management talks more freely and openly about their investments and future plans and also more importantly about work in progress as that sets the tone for our future.0June 21, 2020 at 2:58 pm #7223
Dear pranil, I by no means am an expert in this business but to my knowledge the whole industry was going through a phase of consolidation and many smaller companies didn’t survive where as one can see the difference between the top and bottom line of the company by comparing the numbers of 2016 and 2020.
My principle of investing is much more complicated and I only see the type of business and the person or people leading it. Here I see the adtech industry coupled with AI, ML, Blockchain though nothing has yet come up and I See the Suresh and the Isreali team, Isrealis are great at technology I feel. Maybe my way of taking an investment call is different but thats what it is.0June 21, 2020 at 3:51 pm #7235adminKeymaster
Request everyone to continue discussion in the General thread.0June 30, 2020 at 11:55 pm #7419adminKeymaster
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Glad to see brightcom getting featured with some nice comments.July 8, 2020 at 10:24 pm #7576VALUEBUYER001Registered Boarder
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