This post is in continuation of my 5 Stocks Series (see here)
5 Stocks that went up by 40% in the first half of June 2013 are listed in the table below:
| Symbol | Close on 28 June 2013 | Close on 12 July 2013 | Gain |
| TULIP | 7.25 | 10.45 | 44.14% |
| PARAL | 42.1 | 61.6 | 46.32% |
| NEULANDLAB | 92.85 | 138.3 | 48.95% |
| ADSL | 8.95 | 14 | 56.42% |
| SUMMITSEC | 41 | 64.95 | 58.41% |
This post is in continuation of my forecasting folly series (see here).
On Nov 16,2012, Firstcall Research put out a buy recommendation on Parekh Aluminex with a price target of Rs.357.
What happened next was a truly tragic and a black swan event.
On Jan 6, 2013, the founder and the driving force behind the company Amitabh Parekh passed away (Blogged his obituary here)
The stock started tanking immediately and brought out the fact one-man companies carry an inherent KeyMan risk.
Now, the price of Parekh Aluminex is quoting at a 52 week low of 72.75 Rs.This is around 20% of the original target price set only 5 months back !
Forecasting Folly, anyone?
We cannot imagine an Apple without Steve Jobs.The two are so closely inter-linked that it is difficult to separate the founder from the company.
When the founder passes away, the company and hence the stock price are drastically affected. (as can be seen in Apple’s case )
There are many examples in the Indian context.The recent one being Amitabh Parekh of Parekh Aluminex.The stock has got hammered beyond shape after the unexpected demise of its charismatic founder.
If you cast an eye (not an evil one !) over your portfolio, you will find many companies which are closely interlinked with the founder.It is difficult to visualize that these companies can succeed and grow without them.
A sad but sobering thought.
Amitabh Parekh of Parekh Aluminex is no more.
Amitabh was a dynamic visionary who started from scratch and took his company to 1370 Crores in revenues (FY2012)
I was one of the investors fortunate to be part of his entrepreneurial journey and was amply rewarded (like countless others) by fantastic returns from Paral.
The most saddening aspect of his demise was that he died very young.He was born on 8 March 1973 and so he died before he turned 40.
Rest in peace, Amitabh Parekh.