Why Micro Technologies (India) is a Sell

Well I started this blog recommending Micro Technologies but after gaining more than 200% in less 8 months,I have asked my friends to sell this stock not because it is not undervalued but due to debt it has taken. It's P/E is closer to 3 and P/B is less than 0.70. In all traditional terms it looks cheap and probably still some value is left.

Recently after reading alot about Walter Schloss, my thought process has changed significantly. I am more aware of the perils of the debt. I am willing to look at companies with debt but only when the cash flows are predictable. This is the biggest lesson I have learned in the last one year.

I also do not like any businesses that raise capital give convertible warrants especially to promoters or friends of promoters. That's why Micro Technologies India is a sell.