Vijay Kedia, our favourite stock wizard, delivered an inspiring talk recently where he explained that the difference between a ‘visionary’ investor and a ‘novice’ investor is that the former is able to “connect the dots” i.e. analyze present events and extrapolate their impact into the future. In contrast, the novice investor is not even able to see the present clearly leave alone his being able to extrapolate anything to the future.
The specialty chemicals sector is a textbook example of this. While novice investors like you and me are still wondering whether we should dip our toes into the sector, the wizards have already staked their claim to the quality stocks in the sector and pocketed mega gains.
Dai-Ichi Karkaria is an example of our naivety. When Dolly Khanna was spotted with 78,221 shares in her kitty as of 31st March 2015, alarm bells started clanging across the city and everyone rushed to see what Dai-Ichi is all about. However, few of us had the presence of mind to clone her move.
Today, about a year later, Dai-Ichi Karkaria is up 145%. The stock touched a peak of Rs. 561 on 5th November 2015, implying that massive gains of 250% were on the table at that stage. Over 2 years, the stock is up an eye-popping 529%.
It is notable that Dolly has increased her shareholding in Dai-Ichi Karkaria to 86,647 shares as of 31st March 2016. This implies that Dolly believes that more gains can be harvested from the stock.
Meghmani Organics is the second specialty chemical stock to have won Dolly’s trust. Dolly was seen with 454,475 shares of the micro-cap as of 31st March 2015. Her holding as of date is not known.
Meghmani, which Daljeet Kohli has described as a “classic turnaround story”, has also put up an impressive show with gains of 102% YoY and 252% over two years.
Thirumalai Chemicals is Dolly’s third specialty stock. She stormed the counter in the December 2015 quarter and scooped up 132,173 shares which continues as of 31st March 2016.
It is notable that Anil Kumar Goel, another of our favourite wizards, together with Seema Goel (presumably a PAC), collectively hold 5,56,000 shares of Thirumalai Chemicals as of 31st March 2016.
Thirumalai Chemicals is up 144% on a YoY basis.
Dolly Khanna’s latest favourite specialty chemical stock is NOCIL. She was spotted with 619,131 shares as of 31st March 2015. As of 31st March 2016, Dolly has more than tripled her holding to 21,80,801 shares. This suggests that Dolly believes that NOCIL is undervalued and has potential for mega gains. The stock is up about 40% on a YoY basis and 192% over two years.
Dolly also had a major holding in Aditya Birla Chemicals which got merged into Grasim Industries in January 2016. It is not known whether Dolly holds shares in Grasim though my guess is that because Grasim is a large-cap, it may not be to Dolly’s taste.
Now, the important question is as to how Dolly Khanna musters the confidence to buy chemical stocks. The answer is that Dolly’s alter ego, Rajiv Khanna, is a chemical engineer from IIT, Madras. Rajiv Khanna knows the inner secrets of the chemical industry and probably provides valuable guidance on which chemicals are likely to face increased demand!