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Daljeet Kohli deserves to be complimented for his brilliant stock-picking and timing. On 14th May 2014, Daljeet, with his usual soft-spoken confidence, recommended a buy on Prism Cement Ltd, when it was quoting at Rs. 50. He promised a price target of Rs. 60 for the stock.
Unfortunately, because the target price was modest and cement stocks were out of fashion, a lot of investors (including me) did not act on the recommendation.
That was a terrible tactical error because today, just 45 days later, Prism Cement is at Rs. 75, giving a fabulous gain of 40%.
Thereafter, on 9th June 2014, Prashant Jain, stock wizard with HDFC Mutual Fund, stormed the Prism Cement counter, and scooped up a massive chunk of 1.21 crore shares at Rs. 71.50 each.
This sent alarm bells ringing all around that something great is happening at Prism Cement.
This has now been confirmed by Daljeet’s “initiating coverage” report. In a detailed exposition, Daljeet and Santosh have explored the innards of Prism Cement and explained why it is still a great buy. The best part is that the dynamic duo have predicted a price target of Rs. 117 for the stock, which is a whopping 58% upside from the CMP.
Let’s look at their core reasoning:
“Since our Idea note dated May 5, 2014 (at then CMP of Rs 50), Prism Cements stock has delivered 48% absolute return. Demand revival leading to higher capacity utilization levels in FY15-16E (across all business segments) when coupled with cost saving initiatives/ operational efficiencies across all business segments, would translate to ~Rs 1.8 bn of cost savings. Accordingly, we expect EBITDA margins to improve from ~2.7% (in FY14) to ~9.7% (in FY16E). Using sum-of-the-parts based valuation methodology we arrived at revised PT of Rs 117. Given the 58% upside we maintain BUY on the stock.”
Daljeet also gave a brief talk when he summed up the three triggers for Prism Cement.
Now, the important aspect that you have to pay attention to is that cement stocks, which are highly cyclical and commoditized and which were so far shunned by investors, have suddenly became the rage amongst savvy investors.
Rakesh Jhunjhunwala showed the path when he gobbled up a massive 17.10L shares of Orient Cement in May 2014. Parag Parikh of PPFAS, who is one of the most level-headed and conservative investors you will ever find, put his money on The Ramco Cement. Both of these savvy investors are sitting on a huge pile of gains at present.
And now, Daljeet Kohli and Prashant Jain have put the spotlight on Prism Cement.
Speaking for myself, I am ruing having lost out on the first 40% gain in Prism. I am not inclined to miss out on the second mega-gain which Daljeet has promised. So, I have grabbed a nice little chunk of the stock and am game for more on every dip. What I am eagerly waiting for is to see how soon Daljeet’s target price is met. Any guesses?
Not all recommendations of Daljeet Kohli are working…let’s take recent most example of Nesco…even after a month it is still standing at same price on which Daljeet recommended…same applies to HSIL..stock is still lagging on almost no gain …while bulls are pushing away other stock to higher levels…
Wish you would have let us know when he recommended at 50. It’s not about missing 1st leg of rally but missing compounding effect.
Can you also report when the recommendation of these wizards went negative. I only see report which says x% as increased .
Arjun,don’t be deterred by the previous posts.You are doing good work & providing some entertainment with it too.With the markets looking strong,people want stock picks on their platter.
I also feel that Arjun is doing a great job. Remember that this is a free service and it takes a great deal of consistent effort, to research, keep track and keep posting. As far as Nesco and HSL, here is what I had observed.
On Nesco, the stock corrected from about 1200 odd to 1000 odd. I picked it up after seeing in this site at around 1060. Since then, it has inched up to 1150 odd and again corrected back to 1070 odd. It is a high beta stock and hence there is no point in cribbing.
On HSL, the stock moved from 200 odd to 260 odd in no time. Since then, it is showing a bit of tiredness and retreated a bit but these are normal for any share.
The one suggestion I have for Arjun is – this blog is all about buying. more buying. When do we really exit? I think it is perhaps an young man’s world with an infinite time horizon and hence exit is rarely discussed here. It is all about yet another stock find and yet another boom. Maybe, I am a lot older and hence always think about exit especially after seeing so many ups and downs in our market. I am just unable to trust this market for that ever elusive double rainbow. Also, every new find requires more infusion of capital but as they always say – this is all about a reco. Do your diligence and own up your own decisions.
Arjun, I don’t want to discourage you as well, and yes, I have bought into several stocks that you posted, but I’m negative about this stock. There are some stocks that are owned by a management that is just not interested in passing the profits on to the shareholders, and this company is in that category. I think everyone on this blog knows how any management can reduce the dividend payout by increasing expenses. The management of the company lives the high life on these expenses/losses.
1) I always wait for arjun’s articles
2) they are very well written & experience is almost similar to reading a very short but interesting story
3) specially wait for those where he says ‘speaking for myself’ (a suggestion- why don’t u write an article sharing your portfolio)
4) I agree with one of the previous commenter that u should also share info on when u decide to exit from a stock
Lastly please keep posting as their are many like me who don’t comment but are regular reader of your articles (which are simply superb!)