Bhavin Shah Stock Picks Give 19% Return In 2013

In the beginning of 2013, Bhavin Shah identified five top-quality stocks and promised that they would deliver out-size gains. Two of the stocks have lived up to the promise and delivered out-size gains while three have disappointed

Bhavin Shah of Equirus Securities ended 2012 on a high note with his stock picks giving incredible gains of 77%. His stock picks for 2013 have given an average return of 19%, the performance marred by three of the 5 stocks.

Stock	CMP on 01.01.2013	CMP on 06.12.2013	Gain (%)
Amaraja Raja Batteries	245	345	41
Torrent Power	196	129	(34)
Petronet LNG	158	133	(16)
Persistent Systems	517	850	64
Sadbhav Engineering	137	87	(36)
Simple Average Return			19

Amara Raja Batteries is Bhavin Shah’s all-time favourite stock. It found a place in the 2012 stock picks and delivered excellent returns of 147% in that year. It has continued its strong showing in 2013 as well with a return of 41%.

Torrent Power has been a wild roller coaster ride. When Bhavin Shah recommended it, the stock had already been bludgeoned out of shape owing to the non-availability of gas on which it is heavily dependent.

After Bhavin Shah put his Buy stamp on the stock, it slid further and touched a low of Rs. 67 in August 2013. Then, in October 2013, there was a judgement from the Gujarat regulatory agency that allowed for a pass-through of the variance in the fuel supply. The stock surged to nearly Rs. 100+. Bhavin Shah came out strongly and urged investors to buy, promising that despite the run up, there were more gains in the offing. He was right because since then the Torrent Power stock has surged to Rs. 129, giving a 29% return. However, on a YOY basis, the stock is down nearly 34%.

Petronet LNG, the state-run importer of liquefied natural gas, was also a disappointment because its operational performance in the second quarter (July-September) was a disappointment. The stock is down 16% since the time Bhavin Shah recommended it.

However, Persistent Systems made up for the disappointments of the other stocks with spectacular gains of 64%. Persistent Systems has embraced new technologies of cloud computing and has based its business model around these new technologies. That seems to have paid off big time for it.

Sadbhav Engineering, which specializes in Build Operate & Transfer (BOT) projects, was a pick based on the expected uplift in infra stocks. However, the call was probably a bit early and the stock has lost 36% since then.

Interestingly, Supreme Industries, Bhavin Shah’s stock pick of 2012 (which was not repeated in 2013) continued its strong performance. In 2012, Supreme Industries had thrilled investors with a 64% return. In 2013 also, the stock has given a 49% return. Bhavin Shah must be regretting not sticking with Supreme Industries.