First of all, we have to express our gratitude to Raamdeo Agrawal and his ace team of selfless researchers at Motilal Oswal for the hard work that they have done to hand over winning stocks to us on a platter.
The best part is that these wizards have mastered the art of combining theory with practical examples. So, each report of theirs has a detailed explanation of esoteric issues of investment theory together with specific stock recommendations that exemplify the theory.
The 18th Wealth Creation Study of 2013 homed in on “most consistent wealth creation stocks”. It recommended five stocks which scored well on parameters such as ROE, PAT growth, P/E, competitive moat, ethical & efficient management. The five stocks are Symphony, Bajaj Finserv, Bajaj Corp, Zydus Wellness and Cairn India. Barring Cairn India, the stock selection has yielded humongous returns with one of them, Symphony Ltd, turning out to be a super-duper multi-bagger.
The 19th Wealth Creation Study introduced us to the theory of “100-Baggers”. Here also, the wizards of Motilal Oswal were not content to explain the theory in the abstract. Instead, they hand-picked seven stocks which have the best potential to become 100-baggers in the foreseeable future.
The seven potential 100-bagger stocks are Tata Elxsi, Granules India, Aarti Drugs, Atul Auto, Shilpa Medicare, Suven Lifesciences and DCB Bank.
When I last checked the performance of these stocks, the results were astounding with one of them, Tata Elxsi, having already become a multi-bagger and the others galloping to reach that position.
Now, Motilal Oswal has turned its attention to companies that are transitioning from “good” to “great”. The report analyzes companies like Britannia, Eicher Motors, HDFC Bank, Amara Raja, Emami etc to explore whether there is a common factor responsible for the stupendous success that these companies have seen in the past. It is suggested that there is a “timeless, universal framework that can be applied by any organization” to determine whether it is ready to make the transition.
The report points out that companies which have turned from “good” to “great” in the past have exhibited specific criteria such as industry attractiveness, disciplined management, disciplined thought, disciplined action, expected results etc.
After an in-depth explanation of various concepts, the report screens numerous companies by quantitative filters. Thereafter, it sieves through a list of 60 companies with a fine comb to check whether they have all the attributes necessary to make the transition from “good” to “great”.
At the end of the laborious exercise, the report identifies eleven stocks as qualifying for making the transition. Of the eleven, four stocks are recommended as “top static value picks” while seven stocks are recommended as “top dynamic value picks”.
Now, we have to wait with bated breath to see how long it takes these companies to make the transition from “good” to “great” and fill the coffers of their shareholders with mega bucks!