1 Stock Data Sector Logistics Face Value (Rs.) 2.00 52 wk. High/Low (Rs.) 73.00/40.00 Volume (2 wk. Avg.) 89000 BSE Code 532345 Market Cap (Rs.mn.) 5023.85 *Year ending on June 30th Financials FY08 FY09 FY10E FY11E Net Sales 1714.6 1822.1 1891.9 1986.5 EBIDTA 557.4 446.6 869.7 1027.1 PAT 237.8 -150.5 157.8 244.3 EPS 2.81 -1.77 1.85 2.87 P/E 21.00 -33.28 31.82 20.56 Gati Limited BUY F I R S T C A L L R E S E A R C H SYNOPSIS Gati Limited provides distribution and supply chain solutions primarily in India. It offers integrated cargo services through road, rail, air, and sea transportation. The company offers distribution solutions through Gati Express, Gati Priority, Gati Coast to Coast, IC-Zipp, and Gati Saver. During the quarter two old vessels were sold resulting in the net loss of Rs.31Lakhs. Gati plans financial recast to pay off debts. Gati to explore operations and restructure its business to meet increasing demand. The company has acquired 26.01% outstanding equity of Kausar India through open offer reverse book building process. Gati Coast to Coast, the shipping division of Gati, had launched its first custom built ship- MV Gati Pride. Gati rolls out distribution center in Hyderabad. The company’s Net sales are expected to grow at a CAGR of 16% over FY08 to FY11E. 1 Year Comparative Graph Gati Ltd BSE SENSEX V.S.R. Sastry Equity Research Desk [email protected]Dr. V.V.L.N. Sastry Ph.D. Chief Research Officer [email protected]C.M.P: Target Price: Rs.59.00 Rs.71.00 Share Holding Pattern May 24 th , 2010 ISIEmergingMarketsPDF in-mapegroup from 114.143.218.106 on 2011-02-17 00:26:55 EST. DownloadPDF. Downloaded by in-mapegroup from 114.143.218.106 at 2011-02-17 00:26:55 EST. ISI Emerging Markets.
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Stock Data
Sector Logistics
Face Value (Rs.) 2.00
52 wk. High/Low (Rs.) 73.00/40.00
Volume (2 wk. Avg.) 89000
BSE Code 532345
Market Cap (Rs.mn.) 5023.85
*Year ending on June 30th
Financials FY08 FY09 FY10E FY11E
Net Sales 1714.6 1822.1 1891.9 1986.5
EBIDTA 557.4 446.6 869.7 1027.1
PAT 237.8 -150.5 157.8 244.3
EPS 2.81 -1.77 1.85 2.87
P/E 21.00 -33.28 31.82 20.56
Gati Limited BUY F
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SYNOPSIS
Gati Limited provides distribution and supply chain solutions primarily in India. It offers integrated cargo services through road, rail, air, and sea transportation.
The company offers distribution solutions through Gati Express, Gati Priority, Gati Coast to Coast, IC-Zipp, and Gati Saver.
During the quarter two old vessels were sold resulting in the net loss of Rs.31Lakhs.
Gati plans financial recast to pay off debts.
Gati to explore operations and restructure its business to meet increasing demand.
The company has acquired 26.01% outstanding equity of Kausar India through open offer reverse book building process.
Gati Coast to Coast, the shipping division of Gati, had launched its first custom built ship- MV Gati Pride.
Gati rolls out distribution center in Hyderabad.
The company’s Net sales are expected to grow at a CAGR of 16% over FY08 to FY11E.
For the third quarter, the top line of the company increased 22%YoY and stood at Rs.1891.90mn against Rs.1547.90mn of the same period of the last year. The bottom line of the company for the quarter stood at Rs.41.10mn from Rs. (170.960) mn of the corresponding period of the previous year i.e. an increase of 124%YoY.
EPS of the company for the quarter stood at Rs.0.48 for equity share of Rs.2.00 each.
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Expenditure for the quarter stood at Rs.1690.10mn, which is around 7% higher than the corresponding period of the previous year. Operating Expenses of the company for the quarter accounts for 65% of the sales of the company and stood at Rs.1224.70mn. Employee cost stood at Rs.219.70mn from Rs.190.00mn. and accounts for 12% of the revenue of the company for the quarter i.e., an increase of 16%YoY.
OPM and NPM for the quarter stood at 11% and 2% respectively from -2% and -11% respectively of the same period of the last year. During the quarter two old vessels were sold resulting in the net loss of Rs.31Lakhs.
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•••• Segment-Wise revenue for the quarter
Segment Revenue (Rs. million)
Express Distribution & Supply Chain 1630.30
Coast to Coast (Shipping) 250.80
Total 1881.10
Less: Inter Segment Revenue 0.00
Net sales/income from Operations 1881.10
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The company is in final phase of its internal restructurting. The ramping up of Asia Pacific International business is expected to also pick up significantly as Asia leads the momentum of the Western groth. All counries in the APAC region have shown steady in revenues in the freght forwarding sector.
•••• Gati plans financial recast to pay off debts Burdened with huge debts, the company has embarked on a financial restructuring plan. The strategy is to pay off the entire debt amount of Rs 300crore in two years and avoid investments in new assets. In fact, the company has planned to selloff some of its existing assets like ships that are used to transport goods.
•••• Gati to allot equity shares under ESOS
During the quarter, the 2127500 options at a price of Rs. 47.75 per option were
granted under Eemployees stock option scheme. The number of options
outstanding as on March 31, 2010 was 2989860.
•••• Gati board approves options to improve its market position
The board of directors of the company has discussed the increasing demand for the logistics and distribution services that the company provides.
To meet this increasing demand and to improve its market position, the board gave its approval for the company to explore options to re-align and restructure its business and also to appoint legal counsels, merchant / investment bankers, accountants, consultants, valuation agencies and such other intermediaries as may be required from time to time to help achieve this objective.
•••• Gati board to offer convertible warrants on preferential basis
The company has approved to offer 4,872,000 warrants convertible within a period of 18 months into equal number of equity shares at the price of Rs 81 a warrant to promoter(s) group namely Mahendra Investment Advisors (P) on preferential basis further the board has also approved to offer 5,360,400 warrants convertible within a period of 18 months into equal number of equity shares at the price of Rs 58 a warrant another to promoter, Mahendra Kumar Agarwal on preferential basis.
The board has also decided to offer of 1,441,418 warrants convertible within a period of 18 months into equal number of equity shares at the price of Rs 58 a warrant to the Infrastructure Fund of India LLC on preferential basis, subject to the approval of the shareholders and necessary regulatory authorities including FIPB at the forthcoming annual general meeting of the company.
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•••• Gati buys 26% stake in Kausar India
The company has acquired 26.01% outstanding equity of Kausar India on Mar.
31, 2009 through open offer reverse book building process. The total holding of
the company is 99.73% as on date due to above acquisition.
•••• Gati discontinues wet lease pact with Air India
The company has announced that the arrangement under wet lease agreement with Air India (now known as National Aviation Company of India) for five B737-200 has been discontinued with immediate effect.
Consequently, the freighters leased by Air India have also been withdrawn with immediate effect. However, the strategic alliance with Air India is being continued as usual without affecting air cargo movement business.
•••• Gati Coast to Coast launches its sixth vessel, MV Gati Pride
Gati Coast to Coast, the shipping division of Gati, had launched its first custom built ship- MV Gati Pride. The 7000 DWT and TEU, at USD 13.40 million, MV Gati Pride is the sixth addition to Gati fleet of world class vessels, and was built in two years at Asimar, Thailand.
With the induction of this new state-of-the-art vessel, Gati Coast to Coast will be able to serve more ports with a younger fleet and enhance connectivity, thus offering customers reliable services. The vessel has the best of equipment to ensure safe and reliable handling of cargo. The fleet will operate and serve the routes- Bay of Bengal, Andaman Seas and Malacca Straits.
•••• Gati rolls out distribution center in Hyderabad The company has rolled out its express distribution centre (EDC) at Jeedimetla in Hyderabad. The centre, which is spread over 1.8 lakh sq ft, is equipped with the most advance warehousing technologies and equipment. The EDC aims to fulfill the rising logistics requirement businesses especially in industries like FMCG, retail, apparel and fashion, automotive, pharmaceutical and healthcare, telecom and high tech, agrochem etc.
Company Profile Gati Limited is a pioneer and leader in the Express Distribution and Supply Chain Solutions in India. It was the revolutionary approach adopted by Gati that helped launch many path-breaking initiatives in the logistics segment and many were the firsts for the Indian market. Having started as a cargo management company in 1989, Gati has grown into an organization with more than 3500 employees and a turnover of Rs 576Crore covering 603 out of 611 districts in India.
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Gati has over 4000 vehicles on road, fleet of refrigerated trucks, container vessels and world class mechantronic warehousing facilities across India. Gati was also the first to run the millenium parcel express train in October 2001 between Mumbai and Kolkata with 10 VPUs. The initiative to run a parcel express train between KYN (Mumbai) and NGC (Guwahati) was again taken by Gati - this is a classic example of PPP (Public Private Partnership). The Gati advantage of seamless connectivity across air, road, ocean and rail has resulted in a plethora of offerings to the customer unmatched in the industry. Besides having a strong network in India, Gati has a strong market presence in the Asia Pacific region and SAARC countries. Gati has offices in China, Singapore, Bhutan, Dubai, Hong Kong, Thailand, Nepal and Sri Lanka and has plans to foray into other markets. Gati's shipping division, Gati Coast to Coast based at Chennai, with two decades of experience in the industry has many firsts to its credit: first in operating direct service to Yangon; first in operating a direct container service from Ranong Port, Thailand; and the first in operating direct container service from Penang, Malaysia. Gati Coast to Coast has a tonnage of 43,581 DWT and a fleet strength of six vessels. Subsidiaries
• Gati Holdings Ltd.
• Gati Asia Pacific Pte. Ltd
• Gati Hong Kong Ltd.
• Gati China Holdings Ltd.
• Gati Cargo Express (Shanghai) Co. Ltd.
• Gati Japan Ltd.
• Gati Middle East Fze. Ltd.
• Newatia Commercial & Trading Pvt. Ltd.
• Trymbak Commercial & Trading Pvt. Ltd.
• Ocimum Commercial & Trading Pvt. Ltd.
• Sumeru Commercial & Trading Pvt. Ltd.
• Kausar India Ltd.
• Zen Cargo Movers Pvt. Ltd
• Gati Import Export Trading Ltd.
• Gati Skyways Ltd. Company Services Services in India
Services in India
Distribution Solutions
Logistics Solutions
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Distribution Solutions
• Gati Surface Express With the widest network, the best of cargo movement facilities and several value added services to choose from, Gati Express is the preferred distribution solution provider in India today. Gati’s customers include companies from industries such as pharmaceuticals, textile and apparel, white goods, electronic goods, IT Telecom and other high value cargo.
• Gati Air Express Gati Air Express delivers shipments across all major locations the very next day during business hours, and to some prime locations even before noon! A fleet of dedicated freighters (cargo planes) that fly during the night and a seamless multimodal network that goes down to the last mile, to ensure that your shipments arrive on time. The company has assured the customer, frieght would be refunded if the assured timelines are not met by the company.
• Gati Coast to Coast Gati Coast to Coast (CTC) is Gati's shipping division. Set up way back in 1986, the CTC vision was to become the preferred service provider for all sea bound cargo in the Bay of Bengal, Andaman Islands and Malacca Straits.
• AI Gati Air India and Gati have entered into a strategic tie up to bring to the retail courier service of global standards -AI Gati, the most efficient way of delivering courier at an affordable price.
• Gati Desk to Desk Cargo An affordable surface product especially designed for non-commercial packages. o Flat rate of Rs. 200 per package (up to 5 kgs) ideal for samples, gifts, study
materials & printed material Logistics Solutions
• Supply Chain Management The focus is on integrated logistics solutions. Gati's transport infrastructure, IT systems, cutting - edge technology solutions and an intensive knowledge of India allows it to tailor its products to meet every customer’s unique needs. Gati offers a wide range of options and does not waver in its focus on quality, reliability and speed.
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• Gati logistics package This ready - to - use package comes with an instant distribution network and a wide system of storage locations and distribution channels. It is ideal for clients looking to distribute goods from multiple locations and those with changing distribution needs. For an SME or an MNC entering the Indian market, Gati Logistics is the right choice.
• Integrated logistics Gati provides customized solutions by integrating all the four stages of your business — procurement, production, distribution, after sales service and reverse logistics.
• Process flow
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• Warehousing Gati's warehousing facilities consist of completely modern storage systems and material handling equipment. Thus, Gati is able to offer customers very high levels of operational efficiency.
• Industry solution
o Consumer Goods
o Food & Beverage
o Engineering / Electronics
o Industrial Goods
o Healthcare / Life Sciences
o Computer & IT Peripherals
o Retail
o Fashion & Garments
o Automotives
o Tactical and Confidential Projects
Gati International Gati pioneered the cargo management movement in India. And then spread its wings over the sub - continent. The logistics leader is now making its presence felt in the SAARC countries and the Asia Pacific region. Gati International, the global operations wing, provides with a strategic USP — an international reach, along with a highly focused expertise in India - centric operations. This ensures that Gati remains the undisputed leader not just in Indian operations, but also in India - focused operations. The company has offices in Singapore, Hong Kong, China and Sri Lanka which offer a range of distribution solutions to and from India.
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India centric solutions Gati has been constantly setting new benchmarks in connectivity and coverage. With its deeply entrenched network and domain knowledge, Gati has brought India and the world closer. Entering India by air, sea and road, Gati offers seamless multi-modal connectivity to road, air, sea and rail transport modes, thus enabling customers to effortlessly access the Indian markets. Gati Thailand Gati introduced customized solutions to cater the needs of Indian businesses in Thailand. The individuals can send their Cargo to India at very economical prices. Within a span of less than 2 years Gati Thailand has become an expert in relocation of cargo to India. Gati tied up with Indian Airlines to facilitate speedier delivery of shipment. To make the importing and exporting more convenient Gati Thailand provides following services
o Air Freight
o Ocean Freight
o Inland Transportation
Gati International
India centric solutions
Gati Thailand
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Clients:
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Financials Results 12 Months Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) FY08 FY09 FY10E FY11E
Description 12m 12m 12m 12m
Net Sales 5520.70 6303.30 7415.10 8527.36
Other Income 234.40 - 3.47 3.82
Total Income 5755.10 6303.30 7418.57 8531.18
Expenditure -5197.70 -5856.70 -6548.85 -7504.08
Operating Profit 557.40 446.60 869.72 1027.10
Interest -97.30 -354.10 -429.63 -455.07
Gross profit 460.10 92.50 440.09 572.04
Depreciation -145.70 -230.10 -242.40 -266.64
Profit Before Tax 314.40 -137.60 197.69 305.39
Tax -76.60 -12.90 -39.82 -61.08
Net Profit 237.80 -150.50 157.87 244.32
Equity capital 169.30 169.80 170.30 170.30
Reserves 2799.20 2529.90 2687.77 2932.09
Face Value 2.00 2.00 2.00 2.00
Total No. of Shares 84.65 84.90 85.15 85.15
EPS 2.81 -1.77 1.85 2.87 * Year ending June 30th
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Quarterly Ended Profit & Loss Account (Standalone)
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Key Ratio
Particulars FY08 A FY09 A FY10 E FY11 E
EBIDTA % 10% 7% 12% 12%
PAT % 4% -2% 2% 3%
P/E ratio (x) 21.00 -33.28 31.82 20.56
ROE - % 8% -6% 6% 8%
ROCE - % 8% 3% 8% 9%
EV/EBIDITA (x) 15.06 11.74 6.47 6.11
Debt Equity Ratio 0.75 1.74 1.81 1.83
Price/Book Value 2.83 1.86 1.76 1.62 A-Actual E-Expected Charts:
• Net sales & PAT
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• P/E Ratio (x)
• P/BV (X)
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• EV/EBITDA(X)
Outlook and Conclusion
At the market price of Rs.59.00, the stock is trading at 31.82 x and 20.56 x for FY10E and FY11E respectively.
On the basis of EV/EBDITA, the stock trades at 6.47 x for FY10E and 6.11 x for FY11E.
Price to book value of the company is expected to be at 1.76 x for FY10E and 1.62 x for FY11E respectively.
EPS of the company is expected to be at Rs.1.85 and Rs.2.87 for the earnings of FY10E and FY11E respectively.
During the quarter, the 2127500 options at a price of Rs. 47.75 per option were granted under Eemployees stock option scheme. The number of options outstanding as on March 31, 2010 was 2989860.
During the quarter two old vessels were sold resulting in the net loss of Rs.31Lakhs.
The board has approved in principle investment up to 613 Lakhs which is equivalent of 5% of the proposed equity share capital of Gati Infrastructure Bhasmey Power Private Limited in which the company is one of the sponsors.
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The company has embarked on a financial restructuring plan. The strategy is to pay off the entire debt amount of Rs 300crore in two years and avoid investments in new assets.
Gati to explore operations and restructure its business to meet increasing demand.
The name of Gati Sky Ltd., a wholly owned subsidiary of the company has been changed to Redsun Supply chain solutions Ltd. With effect from 08-03-2010.
The company is in final phase of its internal restructurting. The ramping up of Asia Pacific International business is expected to also pick up significantly as Asia leads the momentum of the Western groth. All counries in the APAC region have shown steady in revenues in the freght forwarding sector.
The Company’s future strategies are focused on development of both domestic and international businesses by building new strategic relationship through its subsidiaries, process improvement, and effective cost management, offering innovative products and services and establishment of state-of-the-art warehouses.
We recommend ‘BUY’ this stock with a target price of Rs.71.00 for medium term investment.
Industry Overview Logistics call for an understanding of the total supply chain, the elements of which include inventories, packing, forwarding, freight, storage and handling. Logistics is responsible for all the movement that takes place within the organization whether it is inbound logistics of incoming, raw materials or movement within the company or the physical distribution of finished goods, logistics encompasses all of these. Typical logistics framework mainly consists of Physical Supply, Internal Operations and Physical Distribution of Goods and Services. To put it more simply, the material supply logistics starts from the base level of “generation of the demand”, through the “process of purchase” and “supply of material from the vendor” right through to “final acceptance” and “payments to the supplier” and “issue to the indenter” and has to be considered as a “one whole activity” with each stage having an impact on price/cost of material supply. Logistics is, in itself, a system; it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel. DEFINITION: The simplest way to describe logistics is to say that it is all about ways and means of meeting the demand for materials i.e. satisfying the customer with what he wants, when he wants, where he wants etc. Definition includes outbound, inbound, internal and external movements and returns of material for environmental purposes. The logistics concentrate on dynamic processes, related to the flow of materials and the relationship between the materials and their use at different facilities. The most wide spread definition from council of Logistics Management says that “Logistics is the part of the supply chain process and plans, implements and controls the efficient, effective
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flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customers requirements.” SCOPE: Logistics is not confined to manufacturing operation alone. It is relevant to all enterprises, including Govt. institutions such as Hospitals and schools and service organization such as retailers, banks and financial service organizations. The study of logistics is especially important for bulk raw materials, where substantial outflow of freight is involved. Management of Logistics is an art which is extremely difficult to perfect in India, JIT ends up being SHIT - some how in time. The study of logistics is important to establish a lean supply chain which would give an advantage of quick product change over, capability, excellent short and long term forecast visibility and JIT capability. MODES OF TRANSPORTATION IN LOGISTICS: In order to transport material from one place to another Logistics Managers are using Rail, Road, Air, Water & Pipe Line as the modes of Transportation. A logistics expert need to understand these modes based on priorities, product type. lead time etc. to decide the appropriate mode of Transportation. Rail: Used for delivery of a wide range of goods including coal, iron ore, cement, food grains, fertilizers, steel, petroleum products and other heavy goods. Road: Used by suppliers to deliver goods in a cost effective manner and best suited for short distances. Many transport companies have expertise for fast delivery, packaging etc. for making scheduled delivery. Air: Used mostly for delivery of high value and tow volume goods from distant suppliers, usually not connected by any other mode of Transportation. It is also suitable for emergent item to be imported for some specific requirement. Water: Used by firms for delivery of goods from distant suppliers, mostly conducted in containers of varied size. This mode is ideal for transportation of heavy and bulky goods and suitable for products with long lead times. Pipe Line: Used by oil sector companies for mass movement of Petroleum products including gases Due to quite low operating cost it is one of the preferred modes of transportation THIRD PARTY LOGISTICS: Third Party Logistics (3PL) provider handles all or most of freight of the organizations including the management of information by the third party, freeing the company from day to day interaction with carriers, and having to oversee hundreds or thousands of shipment. New and cheaper information flow resulting from internet enabled solutions, will lead not only achieving immediate cost reductions in operations but also to enormous productivity gains over the next few years.
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The tracking and control of movement of goods drive freight optimization and asset utilization. The options are: increased trailer utilization, combining full truckload shipments, consolidation, and aggregation of smaller buyers. Purchase asset based transportation is becoming increasingly a commodity. To put simply, 3PL refers to the outsourcing of a logistics function. It could be the use of a transportation carrier, a warehouse, or a third party freight manager to perform all or part of a company’s production distribution functions. The principle reasons of for this function are as under:
• Globalization of sourcing, manufacturing and distribution leading to an increase in the complexity of material movement.
• Competition that has forced companies towards more responsiveness and a reduction in inventories. An increased need for small but frequent shipments with 100 percent reliability requiring core competence in logistics management
• Resource constraints that require companies to concentrate only on their core manufacturing or new product development activities.
FOURTH PARTY LOGISTICS: Fourth Party Logistics (4PL) provider is a supply chain integrator that assembles and manages the resources, capabilities and technology of its own organization with those of complementary service provider to deliver a comprehensive supply chain solution. 4PL is emerging as a path to achieve more than the one time operating cost reductions and asset transfers of a traditional outsourcing arrangement. Through alliances between best-of-breed third party service providers technology providers and management consultants 4PL organizations can create unique and comprehensive supply chain solutions that cannot be achieved by any single provider. According to John Gaftorna, “White outsourcing third party logistics is now a accepted business practice, Fourth Party Logistics is emerging as a breakthrough solution to modern supply chain challenges... to provide maximum overall benefits.” 4PL can be described as the complete outsourcing of the logistics function including procurement of service providers. 4 PL companies are suppliers which have the expertise to manage resources, value delivery processes and technology for their clients in order to allow their clients to totally outsource their logistics management activity. The 4PLs do not compete with 3PLs as they have superior expertise in their respective fields by virtue of their investment and specialization. 4PL providers do not own assets for transportation or warehousing, but rather leverage the solutions created by 3PL.providers, in order to identify and provide ‘best in class’ services to their clients. There are many variations of the 4PL model that are practiced. Three different models are summarized as under;
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A) Lead logistics provider: The 4PL provider acts as an in house freight management company, it might or might not have a role in the selection of 3 PL partners. It takes care of transport invoicing and the monitoring of the performance of the 3 PLs. B) Solution Integrator: In this variant of the model, the 4PL acts as the integrator of various 3PLS and as a single window for freight negotiations, 3PI selection and freight management on behalf of its client. C) Industry Innovator: Under this model the 4PL uses its expertise and resources to create a solution not for any single client, but for offering 4PL services to a number of clients in an industry. The services provided by a 4PL provider are:
• Freight Negotiations with 3PLs
• Freight Contract Management
• Transport Billing
• Continuous Improvement Programs
• Management of Service Providers
• IT Solutions
• Risk Management and Insurance
• Cash-flow Management. RESERVE LOGISTICS: Increasingly, as a strategy, to compete on services, companies offer repair and replacement services for their products under the warranty periods. The defective products are often shipped across international borders to common repair centers to be refurbished and returned to the originating station. Logistics service providers who offer these services have to tackle issues pertaining to duty payment on refurbished products, customs documentation and the establishment of collection points for repair for the customers. CONCLUSION: Logistics is one of the areas of the supply chain i.e. growing at a tremendous case as the Internet and E-Commerce is drastically changing the range, delivery time and the speed of information as well as ordering and payment process. Due to the big boon of information technology, greatly influencing and enhancing the effectiveness of logistics, the time is not far when 5 PLs and 6 PLs may emerge which will probably we doing part of the manufacturing and marketing for the organizations. Transport and logistics is a very diverse sector that plays a major role in the UK and global economy.
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This document prepared by our research analysts does not constitute an offer or solicitation
for the purchase or sale of any financial instrument or as an official confirmation of any
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sources believed to be reliable but do not represent that it is accurate or complete and it
should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s
affiliates shall not be in any way responsible for any loss or damage that may arise to any
person from any inadvertent error in the information contained in this report. This document
is provide for assistance only and is not intended to be and must not alone be taken as the
basis for an investment decision.
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