Good track record in Microsec
First, we have to note that Ajay Jaiswal was the head of research with Microsec. During his tenure, Microsec recommended a number of stocks which went on to become super-duper multibaggers. These were stocks like TTK Prestige, Hawkins, Pidilite, Bata India, Emami, Greenply, Amara Raja, Cera Sanitaryware, Dhanuka Agritech, La Opala, PI Industries etc.
Of course, it is true that the circumstances at that time were very benign and it was relatively easy to pick mega multibagger stocks.
Portfolio of five stocks gave 41% YoY Gain
Microsec’s last recommendation was in September 2015. The YoY performance of the stocks is as follows:
|Ultramarine Pigments Ltd||96|
|Banco Products (India) Ltd||65|
|TV Today Network Ltd||40|
|Ador Welding Ltd||20|
|Mahindra Lifespace Developers Ltd||(16)|
As one can see, with the exception of Mahindra Lifespace, the other stocks have notched up hefty gains. The average return from the portfolio of five stocks is 41% which is hefty by any standards.
Stocks now recommended by Stewart & Mackertich
Now, let us turn our attention to the portfolio of eleven mid-cap stocks recommended by Ajay Jaiswal and his team at Stewart & Mackertich.
|Stock||CMP (Rs)||Target Price (Rs)||Gain Potential (%)|
|L&T Finance Holdings||104||137||32|
|Ultramarine & Pigments||176||229||30|
Some of the stocks in the model portfolio are very familiar to us given that they are also the favourite of our favourite stock wizards.
Apar Industries – Electrifying prospects
Apar Industries needs no introduction to us given that Vijay Kedia and Prashant Jain have given it a certificate of merit by buying a massive chunk of the stock each.
The stock is up 30% on a YoY basis and has a lot of potential ahead of it given the thrust on electrification by NAMO and Piyush Goyal.
Cera Sanitaryware – A powerhouse stock which prospers despite the slowdown
Stocks like Cera Sanitaryware, with a powerful brand name and visionary management, are meant to be bought and forgotten. These stocks compound at a furious pace and become multibaggers by sheer passage of time.
On a YoY basis, Cera has given a return of 37%. This is a commendable performance when we bear in mind that all other stocks which are dependent on the real estate sector are languishing due to the slow down in the sector.
One can well imagine what the performance of Cera Sanitaryware will be when the real estate sector comes back into demand.
It is noteworthy that Cera has won the confidence of Vijay Kedia, Jwalamukhi (Westbridge Capital), Nalanda India Equity Fund, Malabar India Fund etc.
DSP Blackrock Small and Mid-Cap Fund also holds a significant stake in Cera.
We saw earlier that Vinit Sambre, the fund manager of DSP Blackrock Small and Mid-Cap Fund has the credentials of a whiz-kid and has been awarded the prestigious title of “Best Mutual Fund Manager”.
Cera Sanitaryware was once a favourite of Dolly Khanna. She appears to have sold off her stock as she found more lucrative pastures to graze on.
GMM Pfaudler – mystery stock
GMM Pfaudler is a mystery stock that I have never heard about until recently.
I stumbled upon a research report by Nirmal Bang which recommends a buy on the basis that there are several factors which will lead to a re-rating of the stock. Nirmal Bang has foreseen a target price of Rs. 745 for the stock which is a hefty upside from the CMP of Rs. 513.
Stewart & Mackertich have recommended a buy of GMM Pfaudler on the basis that “The company operates in niche segments where growth visibility is getting strong. We believe the company is likely to be a major beneficiary of growth in pharmaceuticals and chemicals sectors”. S&M have foreseen a target price of Rs. 642 for the stock which is a potential upside of 24%.
L&T Finance Holdings – Blue-chip fail-safe stock
L&T Finance Holdings shot into stardom after AM Naik, the legendary chief of L&T promised to make amends and ensure that the shareholders get their rightful due from the stock.
They say the chairman is the best analyst of a stock and thats true for L&T FINANCE HOLDINGS LTD. atleast…TP came early 😉
— Nigel D'Souza (@Nigel__DSouza) October 14, 2016
Dinanath Dubhashi, the CEO of L&T Finance Holdings, has also laid bare the plans to rationalize the operations and increase RoE.
L&T Finance Holdings comes highly recommended by Sandip Sabhrawal, Daljeet Kohli, Sharekhan and a host of other experts.
Given the blue-chip credentials of the management, L&T Finance Holdings is a textbook example of a fail-safe stock. We can put large chunks of capital into such stocks without a care in the World!
Mahindra Holidays – Diwali Gift by Vijay Kedia
Mahindra Holidays was ceremoniously handed over to us as a Diwali Gift by Vijay Kedia.
The Company reported robust Q2FY17 results with a 10% growth in topline and a 22% growth in net profit. One can confidently say that the stock will prove to be a magnificent compounder.
TV Today – Choice of Billionaires
TV Today also needs no introduction given that Billionaire Radhakishan Damani and Ramesh Damani hold a strangle-hold in the Company. The ongoing reform in the sector and impending digitization is likely to create a bright future for the Company.
Will Rajdeep Sardeai adversely affect the prospects of TV Today?
In an earlier piece, I expressed reservation that Rajdeep Sardesai, the editor of TV Today’s channel, appears to be misguided and is toeing an alleged “Anti-India” stance.
Rajdeep Sardesai’s actions have not endeared him to ace investors.
Oh, this guy (either a fool or a Crook) thinks 'Standing Against Govt' (from Day1 of a Democratically Elected Establishment) is Nationalism! https://t.co/yRYlllUhyK
— Porinju Veliyath (@porinju) November 2, 2016
— Porinju Veliyath (@porinju) November 1, 2016
How can any businessmen invest in a company that promotes Rajdeep Sardesai and Karan Thapar…beyond logic.
— Deepak Singh (@smarket) August 11, 2016
I suggested in my piece that the best course of action is for the management of TV Today to give Rajdeep Sardesai an ultimatum to either reform his ways or to be booted out peremptorily.
Of course, if this is ever done (the dismissal of Rajdeep Sardesai from service), it is certain that viewers will flock in large numbers to TV Today’s channels, the stock will get re-rated and multibagger gains will be on the table for investors.
The stocks recommended by the experts at Stewart & Mackertich cannot be faulted. It is obvious that there has been careful application of mind and only stocks with a high margin of safety and potential for hefty gains have been chosen. It is quite certain that the model portfolio will bring prosperity to investors!