Stocks I bought in March 2005

I picked up three stocks in March 2005. Here I explain my rationale behind buying these.

Cosmo Films

I bought this stock in the third week of March. The company is the largest Indian manufacturer and exporter of Polypropylene films. I felt this was a good buy because:

• The company has been paying dividend consistently in the recent past, and the dividend yield is good:

  The company has paid dividends ranging from 35% to 45% over the last three years for which dividend data is available.

  At 35%, the dividend yield at the price which I bought is around 6%, which compares favourably with the shorter term fixed deposit rates.

• The book value per share is around 10% higher than the price I paid.
• At the price I bought, the P/E ratio is only slightly above 3.

MTNL

I bought this stock in the third week of March. The company is the primary provider of telephony services in the two metropolitan cities of Delhi and Mumbai. The reasons for selecting this stock are:

• The company has been paying dividend consistently in the recent past, and the dividend yield is passable:

  The company has paid a 45% dividend over the last three years for which dividend data is available.

  At 45%, the dividend yield at the price which I bought is around 3.7%, which compares favourably with the savings bank interest rate.

• The book value per share is around 33% higher than the price I paid.
• At the price I bought, the P/E ratio is around 6.75.

Tamilnadu Petroproducts Ltd

I bought this stock in the last week of March. The company is in the petrochemical products business. The reasons for selecting this stock are:

• The company has been paying dividend consistently in the recent past, and the dividend yield is good:

  The company has paid a 12.5% dividend over the last three years for which dividend data is available.

  At 12.5%, the dividend yield at the price which I bought is 6.25%, which compares favourably with fixed deposit rates.

• The book value per share is more than twice the price I paid.
• At the price I bought, the P/E ratio is around 8.