Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by bholu, Jan 22, 2016.
What about my queries on Kakatiya ? You have not replied as yet.
I am recapping my stock ideas. This is because I do not want to lose my focus. However I am prepared for criticism of any kind. It just makes my resolution to help retail investors even stronger.
Exide industries - Continue Hold. Good operational performance expected. I think Exide can really be a good performer after a modest run.
SBI - Continue Hold. SBI will gain from RBI's rule to allow real estate as Tier I capital. SBI has 20k crores worth of real estate and the RBI rule will add 9k crores to its Tier I Capital. This is big ease in terms of raising capital from the market to meed Basel Norms. Also the tackling of NPA issue seems to be bearing some fruits going by the developments in Kingfisher, JP, and Essar Steel Case. Lets hope ultimately it does add to the bottomline. Any up gradation or settlement of NPA accounts will be "double positive" for the profits of the banks. First they will recover money and secondly they will reduce provisions.
Since I wrote the last piece on SBI the the RBI has further allowed some large corporate houses to be removed from the "NPA list". This list was prepared and banks were asked to make provisions for the loans given to these corporate houses even if their loans were technically not NPAs (means they were being serviced). The media reports indicate that large leveraged groups like JP, Essar, etc. figure in the list.
PFC - Continue hold. The bottlenecks in the power sector are getting reduced. Also the UDAY scheme is getting implemented well.
GE Shipping - Continue Hold. Another good quarter expected.
Selan Exploration - Continue Hold. Valuations still inexpensive. Crude prices are off their lows. Efforts on between producers to cut production.
Cyient- Valuations cheap. Stock has appreciated by almost 25%. Results were ordinary but profile still good. I really cannot think of a better stock in the mid-cap space which are cheap.
NMDC - A dividend of 10% and good capital appreciation since presentation. Iron ore prices have also increased indicating positives intact.
Tata Global Beverages- Hold. Tata Steel UK is being sold off indicating that the group is really showing an serious intent to restructure, cut unproductive assets and improve profitability. Tata Global could really do well from here.
City Union Bank - Hold. Positives intact.
Tech Mahindra - Inexpensive stock with strong management. Continue hold. Further upside expected. All companies are indicating that FY17 will be a better year.
Ramco Cements - The 5, 10, 15 year stock. Continued strength displayed. Might be the multibagger. The stock is now showing an up move indicating that my conviction is correct. There is an interesting story behind the discovery of this stock which I will share after 5 years.
Orient Cement - Positives intact. Cement prices and demand on upside and so is demand. .
BHEL- Results were ordinary but order inflow was high. The fundamentals of the stock are really good and the company is strongest in its sector. I think the stock has gain around 25% since I put it on the list and further upside is also possible.
Engineers India - Niche stock. Inexpensive valuations. Hold
Karnataka Bank - Hold. Value stock with good fundamentals.
Lupin - Watch. Full clarity on the USFDA issue is yet to emerge though management commentary is reassuring. Stock is expensive but pharma sector has commanded premium and Lupin has been at top of the league. Consolidated numbers following the spate of acquisitions and management guidance will be key in the following results. - Japanese MNC with good brand and strong fundamentals. Also the demand for dry cell batteries is expected to increase greatly in the future. The strategic initiatives by the company to revamp brand positioning and increasing capacity is positive. Expected to be a slow but steady performer.
Panasonic Energy Company - Japanese MNC with no corporate governance issues. Strong management and good fundamentals. Also strategic initiatives to revamp brand and increase capacity are likely to bear good dividends. The demand for dry cell batteries is expected to rise and India with 1.2 billion customers offers great opportunity.
Infosys - The stock which needs no write up. Two consecutive quarters of out performance and a vision to more than double revenues by 2020. For this to happen Infosys must grow revenues in the range of 15-18%. A margin target of 30% aims at high profitability. With cash reserves of over $5 billion and revised dividend payout of 40% of PAT Infosys can really provide great and steady returns. A re-rating seems imminent.
Today I am going to share a very interesting story. Lord Shri Krishna is also known Rann Chhod ( literally means somebody who ran away from battle).
Read the story here: (with sincere and heartfelt gratitude to the writer of the blog)
Investing in stock markets and sometimes life is about following Shri Krishna's ideology of running away from from battle field. And returning to fight when you have the strength. And even if you do not return to fight a battle it is not necessary that you win every battle or to fight battles which are useless. Hence sometimes just quit when you know you cannot win or when you know that victory or defeat is meaningless.
In this very blog I found my views challenged in a sharp manner. Probably to derail my attention or probably to discredit my writings. Initially I responded but now I have chosen to quit this battle. Of course I am not comparing myself with Lord Krishna. I am just the most ordinary of the ordinary human beings.
Similarly I would advice you that investing in stock markets is not about testing your knowledge or about finding/digging for the multibagger or trying to beat anybody in returns. It is simply about investing in good stocks available at cheap valuations which can make money. I am recapping the performance of my stocks.
Exide - Recco at 135. Today 150. Dividend of Rs 2.2 as well. Also today's results should lead to more upside.
State Bank of India - Recco at 150. Today at 195 after touching 200.
NMDC - Recco at 80. Dividend of Rs 11 and touched 100 even after quoting ex-dividend.
PFC - Recco at 150. Touched 180. Dividend of Rs 4.5 as well.
Tech Mahindra - Recco at 425. Touched 480.
Cyient - Recco at around 400. Touched 500 odd
GE Shipping - Recco at 310 levels. Touched 340 odd levels. A dividend of Rs 7.5 was announced.
City Union Bank - Recco at 80 levels. Touched 95.
Selan Exploration - Recco at 170. Touched 200 today. Oil prices are rising.
Engineers India - Recco at 160. Touched 180
Ramco Cements - Recommended levels 380 odd. Touched 460. Dividend announcement was Rs. 5.
Orient Cements - Recommended at 135 levels. Touched 155 plus.
BHEL - Reccomended at 105 levels . Touched 130 plus.
Tata Global Beverages - Recommended at 105 and touched 120.
Karnataka Bank - Recommended at 95 levels. Touching 115 levels.
Lupin - Only stock which is in negative territory. I ignored valuations with emphasis on quality which proved to be an error. I am waiting for results.
Two other stocks ICICI Bank and Prestige Estates also returned positive returns but I terminated their coverage because the future outlook
Infosys, Panasonic Energy are recent recommendations. Hence I will wait for their performance. As you notice investing in reasonably priced stocks is a sound strategy. they give good returns with low volatility.
There is no need to contest with anybody or to get into debate over wrong and right. Leave battles you cannot win or which are meaningless. Focus on doing your work and doing good work.
I would return with new recommendations very soon.
Very good performance of stocks. Even lupin do well in long term it is also quality stock.
Good wisdom should be followed by all.
Thank you. Lupin was not a very good selection because I ignored valuations. However the quality is good no doubt. I think like me the rest of market is waiting for results and the USFDA ruling on Lupin. In my opinion valuations will limit upside if either two factors are not positive. Keeping fingers crossed.
You are doing a great job in helping out the poor clay-minded like us....Please keep up the good work.....
And your recapping of all the stocks with reasoning helps us a lot....
Please advise us of any other links in this forum that we people should look at...
Thanks a lot
Buy and Hold - Blue Chips never go out of fashion : Ruma Dubey
Thank you. I am just a humble retail investor sharing my ideas and experience. I really cannot say which post is helpful. As you see there are 100s threads with 1000s of posts. You may read the articles which discuss individual/hot stocks.
My suggestion to you would be to not follow anyone blindly but do your own analysis and use your judgement when buying a stock. It has been my repeated experience that whenever I have used my own analysis and judgement to buy a stock I have done well. Whenever I have let the opinion and judgments of other to influence my investment decisions it has not worked well.
good performance by your stock picks.congrts
Mr. SP Tulsian said that his preference will be more for Karnataka Bank followed by Lakshmi Vilas Bank and third Federal Bank because there is no point in just revolving around this Axis Bank and ICICI Bank from here on because one has to leave and look to the other banks also available in the private sector space.
In Karnataka Bank, You have a price to book of 0.6, EPS of Rs 20, net NPA at 2.4-2.5 percent.
Lakshmi Vilas Bank is the only bank which has been continuously showing the improvement in the asset quality with fall in the net NPA over Q1, Q2 and Q3.
On a price to book, Federal Bank looks a little expensive, maybe closer to at about 0.9 times. When the Q3 commentary came from the management, they say that probably we have seen the worst of the quarter this time and Q4 will be seeing the better kind of things, indications coming in and there also, net NPA at 2.5.
Mr. Tulsian also has a positive stance on Indusind Bank, Yes Bank and Kotak Bank.
Read more at: http://www.moneycontrol.com/news/ma...p-tulsian_6418541.html?utm_source=ref_article
Lupin looks to strengthen brand, specialty biz in US
Read more at: http://www.moneycontrol.com/news/business/lupin-looks-to-strengthen-brand-specialty-bizus_6476741.html
My new stock pick is Kansai Nerolac Paints. It is yet another Japanese MNC subsidiary of Kansai Paints (which is among the top 10 paint companies in the world). It is the third largest paint manufacturer in India by sales behind Asian Paints and Berger Paints. Though Kansai is a distant third in the decorative (house) paints business it has the largest share in industrial paints (auto, white goods etc) segment which should do well given the industrial recovery.
And Kansai is now making a strong effort to gain market share in the decorative (home) paints category. It has widened its portfolio and made greater efforts in sales and distribution. It introduced "Little master" to compete with Asian Paints' Tractor emulsions in the economical paints category. It also introduced "Solider" brand to target the micro rural market with towns and villages having population of less than 20k. In the next 12 months this paint will have a pan India launch with very localized distribution approach. It has increased its distribution network from 12000 to 15000. And in the coming months it also plans to increase its capacity by 20%.
It has got Shahrukh Khan to endorse its brands (though this is not so good strategy given what happened with ICICI Bank and DHFL) but the company's efforts are certainly very intensive and its ad spend indicate that is making a earnest efforts to regster itself in the minds of consumers.
On the operational front the company is also doing well. It should a volumes jump and rise in operating profits. It sold a piece of land in Chennai (for 550 crores) probably indicating that the company with not do any more production there. Hence for this year the net profit was almost 2.5 times the profit of last year. Soft commodity prices (especially crude) should help the company maintain high margins and the revival in industrial demand and increased market share in decorative paints should help drive sales volumes in the future.
Kansai has extremely strong management (its a erstwhile Tata group company now having a Japanese promoter). The promoters also increased their stake in the company by 2 % indicating their confidence in the India operations.
Kansai is not a cheap stock by absolute numbers trading at almost 30 times FY 17 earnings. Yet it trades a discount to Asian Paints and Berger Paints. Given the operational strength of the company, its efforts to gain market share in the high margin decorative paints category coupled with its leadership in industrial category, soft raw material prices and extremely strong management it is definitely a contender to outperform its peers. the sale of land in Chennai and the gains of 500 crore plus leading to 2.5 times increase in profits is an important gain for the company which has tremendously improved the outlook for the future.
An ad for the company. The concept of this ad is interesting. It shows that dress and degrees do not matter. You can be from California and have a degree from Harvard (for e.g) and be a faculty member in Chennai and not command respect. Yet if you have a degree from Harvard and have the right paint in your house (heart) and are willing to be addressed by playful names by your friends (Ghanshu or Jolu) you can still earn the love and respect from your friends.
jordaar bholu ji...
btw my picks for long term (i am having all in my portfolio)
1) City union bank well placed bank in SME sector with managable NPA
2) Bajaj Finserv It can be a multibagger stock in near future
3) Aditya Birla fashions so many brands under one umbrella and very good & solid managment can lead this company to new height
4) MCX This can be given to your coming generations...Huge untapped commodities trading market in india
5) Swaraj Engines and UPL : Can be played for 2-3 years as govt is giving thrust on rural sector
6) Sudarshan Chemical: Waiting to see upside in this stock
7) Heritage Foods Largest holding of my portfolio...very positive for this company..eagerly waiting to see upcoming results..very much hope from this company..
8) Ibulls Housing: Housing for all is not possible without finance...core portfolio stock...
9) Vivimed labs: Already given @150 %return to me...still holding in portfolio
10) Persistenet System
11) TV Today network
At present i am having these 12 stocks in my portfolio.
Following Stocks i dont have in my portfolio but want to add..please share your view
1) Vinati Organics High RoE, HIgh RoCE, almost zero debt company, Margins improving...can be a great bet
2) Bharat Forge Defence play
3) Ramco Cement ya phir Orient Cement (Ya phir aur koi cement stock)
4) Lincoln Pharma
5) HCC/ simplex infra/ JMC project/IRB/KNR (which one to buy in infra space)
Please share your views about these stocks...
I cannot comment on all these stocks but selectively comment on the few I know about and have researched. These have been covered here as well.
City Union Bank is good stock and should provide safe and steady returns. It is unlikely to be a great market out performer (unless it is taken over by some other bank) but at the same time it would protect your capital and give decent returns.
Ramco Cements is likely to be market out performer and is a very good portfolio stock. It has all the makings of good wealth creator though you have to be patient (as one has to be with quality stocks).
Orient Cements is not in the same league as Ramco because Ramco has more capacity, stronger brand recall, wider reach and probably better management quality than Orient. However Orient has strong presence in Telengana/AP which is likely to see great expansion in demand. Also its plants are strategically well located in terms of raw materials and transport logistics. Also valuations are reasonable.
I have covered the three stocks I have reviewed personally. I really can not comment on stocks I have not reviewed. Since you are first one to ask I can review a few stocks for you (maximum five). Sorry cannot review more. Let me know if you want me to do that and stocks you want to be reviwed. Also you have to give me some time. At least 3-4 days.
i appreciate your time..
If you have enough time then please review following stocks:
Heritage Foods, TV Today networks and Vinati Organics
Thanks in advance,...
Heritage Foods looks for new set of investors and strategic partners
Message posted by RAMA MURTHY SASTRY CHALLA on 22nd February 2016.
There is no need of thanks Sandeep Ji. I can review all these stocks but it would take too much time. I would want to give you a fair and insightful opinion. Since I asked for 5 and you gave 3 I would add MCX, Bajaj Finserv, and Heritage as you have placed great faith in these stocks. Lets hope this exercise would be helpful to other retail investors who are willing to invest in these stocks. Looking forward to this exercise.
Good venture will benefit all investors.
I am reviewing MCX first. Multi Commodity Exchange has had a controversial history which I am not discussing because it hardly matters now. The company is completely out of the woods with its erstwhile promoter Jignesh Shah and FTIL having completely sold their shareholding. FTIL and MCX have also renegotiated their contracts for support services (the previous contracts were seen to be favoring FTIL), and most importantly MCX has been freed of all liabilities in the 5600 crore scam that hit investors. It means MCX has emerged completely unscathed from the controversy.
What are the strengths of the company:
1. Only listed exchange in the country out of two exchanges which offer commodities trading in the country. The other being NCDEX.
2. Exchange business can be a very high margin , and high cash flow generating business. Once you get the infrastructure in place the business can increase manifold as trading volumes.
3. The commodities trading market is still in a very nascent stage in the country. Literally the sky is the limit in terms of business potential. MCX already has the trading platform and management in place.
4. Following the exit of Jignesh Shah and FTIL very strong investors like Kotak Mahindra Bank, Rakesh Jhunjhunwala, and various others have invested in the company.
5. Extremely strong balance sheet with over 1k core in cash reserves, for a market cap of just over 4k crores.
1. Trades at very high valuations. Trailing PE is 70. Cannot predict future earnings.
2. Following the crisis trading volumes have dried up as indicated by revenue and profit figures.
3. NCDEX has emerged as strong competitor to the exchange. It is also backed by several high profile investors. Also NSE and BSE have been trying to get permission to set up commodities exchanges. So far they have failed but if either of them manages to get the permission they will emerge as very serious competitors given their infrastructure, membership base and financial strength.
4. The commodities trading market is still in a nascent stage in the country. Though this offers great potential for the future it also presents a challenge in terms of infrastructure development and regulatory framework. The NSEL crisis was due to these two factors. So far not much progress has been made on this front. The SEBI has been appointed as the regulator for commodity exchanges which in my opinion not the most effective regulation. A separate regulator maybe required . Also there are simply just not enough warehouses, storage facilities to support an expansion in trading volumes. Without adequate infrastructure and regulation trading in commodities would just turn out to be pure speculation, something which resulted in the NSEL crisis.
5. Unlike western and developed countries the physical commodities market is still heavily regulated or maybe over regulated in our country due to socio-political factors. Commodity prices, particularly prices of agri-commodities and crude are very sensitive to social and political factors and have repeatedly forced govt. intervention. In such a scenario commodities trading will always be exposed to disruption due to political risks and social unrest.
Hence to sum up you can see that MCX has several positives at the company and industry level. Yet there are many potential challenges and risks as well. These challenges may not disrupt or directly affect the company per se but they can certainly limit its potential growth. And some them are quite real and have a high chance of occurring as well. Also the stock is really expensive. Following the revamp of the company the price of the stock has been range bound at around the 1000 level.
I really cannot say if MCX is the stock worth passing to the next generation. Though there is great potential in the business model of the company there is a lack of clarity on several issues regarding commodities trading, inadequate regulation and infrastructure. Potential entry of strong and resourceful competitors makes the future hard to predict. There is no listed peer to facilitate any comparison. In my opinion you should continue to hold the stock but keep a track of developments at the industry level.
Good clear and detail writ up with pro and cons will help investors take correct decisions.
Separate names with a comma.