Secular growth stocks with 5+ year horizon suitable for 10%+ of PF

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by jarmoney, Apr 13, 2015.

  1. Anil

    Anil New Member

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    Kindly tell about indo count industries. I think it may be another multibagger stock.
     
  2. Meenakshi Razdan

    Meenakshi Razdan Administrator Staff Member Moderator

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    Well, Indo Count has been an incredible achiever. It has given a return of 3769% in 2 years. In the last one year, it has given a 550% return. The stock is still a small cap!

    Edelweiss have recommended Indo Count in their latest Model Portfolio. Have you had a look at that? Their reasoning is as follows:

    Indo Count Industries Ltd (CMP: INR 569; Mkt Cap: INR 2,246 crs)

    Business Overview
    - Third largest exporter of Home Textiles (bed linen); 20% market share
    -Exports constitute 85% of revenue (70% to US)
    -Marquee global clients - Walmart,, House of Fraser, JC Penney, BBB (top 2 supplier)
    -Opportunity Size: -
    -Global Home Textile Market is currently valued at USD 86bn (2015) and is expected
    to grow to USD 96bn by 2017.
    -India’s Home Textiles exports stood at USD 1.4bn in 2013 and is expected to grow
    to USD6.8bn by 2020 i.e. FY13-20 CAGR of 12%
    -India is 46.5% of the US Cotton Bed Sheets/Pillow imports (Imports USD 1.56bn)
    -Bed Sheet segment alone is estimated to be USD 4.5bn in the USA market
    -Newer segments such as Fashion Bedding, Utility Bedding and Institutional bedding
    together account for USD 9.5bn.
    -These three segments are currently dominated by China (85-90% of total USA
    imports in these three segments). Any shift in the market share from China to India
    would offer huge growth potential for Indian Home Textile players

    Investment Hypothesis

    - Competitve advantage over competitors due to cotton surplus status, favorable
    cost dynamics, skilled labour advantage and supportive government policies &
    subsidies.

    -Shift in Home Textiles market from China to India due to wage inflation and Yuan
    appreciation in China.

    -Shift in Product mix towards high margin Home Textiles business (20% margins)
    from low margin Spinning business (5-7% margins).

    -Foray into newer geographies and also newer segments with a total market size of
    USD 9bn such as Fashion, Utility and Institutional Bedding

    -Fashion and Utility segments would utilize the same retail distribution channel as
    Sheets allowing for distribution synergies.

    -China dominates 85-90% of these three segments. Any minor shift in market share
    to boost Indo Count’s revenues.

    -Asset light business model leading to Superior return ratios.

    Risks

    Raw material volatility
    Losing Suppliers


    Mr. Prakash Diwan of Altamount Capital has recommended the stock (again) today (link).
     
    w4wealth, MurliPM and stockjeet18 like this.
  3. Anil

    Anil New Member

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    Thanks for detailing and very fine analysis of the stock.
     
  4. Sridhar Shankar

    Sridhar Shankar New Member

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    I would like add my humble picking, (pls do your own research before taking any action)

    1. Gulf oil corp....recently dermerged gulf oil lub and listed. GOC has SEZ in bangalore on airport road ready to rent out, nearly 650 acres of land in Kukatpally in hyderabad and explosives business plus mining services business....debt free...all this at a mouthwatering valuation of just 700 crs odd...quality management of Hinduja...this can be a multibagger from a 5 year perspective.
     
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  5. jeett

    jeett Member

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    My top 10 stocks are as summarized below:

    1. Ajanta Pharma - long way to go. First mover advantage

    2. Torrent Pharma - very agressive and innovative management

    3. Alembic Pharma - Old Pharma giant wakes up finally.

    4. Britannia - Biscuits have become more crunchier.

    5. Timken - Bearings starts rolling very fast - company is expanding into new areas.

    6. Kitex Garments -

    7. Mayur Uniquoters - expanding into new areas.

    8. Gruh Finance - Niche player in the Housing finance space.

    9. Havells - Slyvania will soon light up your portfolio.

    10. Yes Bank - Will soon reach 4 digit mark...Post QIB it will run much faster and will be part of top 3 Pvt Banks.
     
  6. Rajesh

    Rajesh Member

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    Nice selection of stocks. I am not sure with the growth prospects of Havells as it is stagnant now. Also I don't know about Timken prospects. Can you throw some light here on these two.
     
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  7. Samar

    Samar New Member

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  8. good stocks

    good stocks Active Member

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    Dear Samar, I think Sunil Hitech could do 270 ---350 from 210 levels now in a year or so
     
  9. satyak

    satyak New Member

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    Dolly's stocks has stopped working now. Example : Asian Granito and ifb agro. I lost at both. May be she is still holding with patience and earn someday. But RS software also appreciated and gone down latter. So, I don't believe in 5 year story. Hawkins has made people rich but I don't think it can do same wonder now.
     
  10. midnight

    midnight New Member

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    Hawkins - I know everyone hates it these days but the main problem was the price not the company
    Astra Microwave - Defense, decent valuations, clean BS, good track record
    Ambika Cotton - that man Sanjay Bakshi's idea
    Amrutanjan - hoping valuations get better before I buy
     
  11. Elric

    Elric New Member

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    • Maruti Suzuki.
    • Should continue to command 27-30 PE on 1 year forward earnings if markets stay reasonably bullish.
    • If it delivers a 17-20 lakh unit volume, it might hit a 170-180 EPS range over the next 12 months.
    • Will continue to attract first time car buyers, small city/town buyers due to easy availability of service, may find reasonable success in the sedan segment making it an attractive medium to long term story.
    • Is a boring large cap but continues to reward investors.


    Disclaimer: This is not a recommendation. Do your own research, I invariably would have a vested interest in anything I say.
     
  12. Satishkumar DK

    Satishkumar DK New Member

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    Hi, My top 10 Favourites for Long term are below: Any suggestions, please mention.

    1. Atul Auto
    2. Canfin homes
    3. DCB Bank
    4. Fluidomat
    5. Godrej Properties
    6.Kesar Terminals
    7. MCX
    8. Selan Exploration
    9. TVtoday
    10. VST Tillers & Tractors
     
  13. anitaacs

    anitaacs New Member

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    Pokarna is a great value pick. Expected EPS of 100 which could grow at a cagr of 20% for next 5 years .... stock trading just at 1100 while others like kajaria , somany cera, etc are having a PE of 25-30
     
  14. saurabh kurichh

    saurabh kurichh New Member

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    I think REC and PFC cud be the good ones to watch out for . Available at 1 time book and a PE less than 5. For anything to happen power is a must .REC lends 98% to states, which can never go bankrupt . so expecting a decent return in these two.

    Moat based company with steady fundamentals would be powergrid
     
  15. stockguru

    stockguru Active Member

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    @saurabh kurichh You also have to take in health of power distributors in mind. Quite few power distributors are deep in debt. Any sort of restructuring or wavier of loans might have negative effects on these companies.
     
  16. saurabh kurichh

    saurabh kurichh New Member

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    hello stock guru , Thanks for replying . Thats the only negative thing i too have on my mind. Though previous recommendations by different committes have not favoured a waive off so keeping my fingers crossed. POWERGRID also has a moat of fixed return of 14 % and a very high entry barrier too.

    i prefer to choose sectors rather than stocks and then pick the best 5 of those or monopoly stocks. Something like COAL INDIA , CASTROL, NESTLE , PIDILITE, BHARTI IDEA , ENTIRE CEMENT PACK. cud be good according to me
     
  17. saurabh kurichh

    saurabh kurichh New Member

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    oops forgot to mention HPCL BPCL to the list :D
     
  18. stockguru

    stockguru Active Member

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    @saurabh kurichh I don't disagree with your idea or your thought process infact monopolies and high entry barriers stocks are always good especially when you get them at bargain prices.
    Just with powergrid and pfc, I thought one needs to keep in mind the conditions of power distribution companies in mind. Most of these distributions are deep in debt and all are owned or managed by their respective states.I think some of these do have a very high level of debts and some portion of restructing or waiver is inevitable in some cases. In the past too goverment has asked companies like ONGC or Oil India to share a part of subsidy which the government used to give before diesel deregulation, so it is not entirely a new thing. An investor should always prepare for the worst and hope for the best. So although different committees are not recommending a waiver, you as an investor should be prepared that this kind of situation can arise and hence either buy it at a cost wherein you have factored this situation or avoid the company altogether.
     
  19. saurabh kurichh

    saurabh kurichh New Member

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    Thanks a lot for ur words. What abt the other stocks mentioned ?
     
  20. stockguru

    stockguru Active Member

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    Well the companies you mentioned are good quality. A few like Nestle or Bharti or Idea maybe having their own set of peculiar problems in short or medium term but when the horizon is of 5 years, I would suggest that one should revisit the stock and do an analysis atleast once a year to see that company is on track with the goals that the investor might have kept in mind.
     
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