Daljeet Kohli’s stock recommendations give hefty gains of 79% and 27% in few months
Normally, I am eager to report on Daljeet’s stock recommendations because we have benefitted enormously from his earlier tips.
However, from some reason, when he recommended a buy of Sunteck Realty and SP Apparels, I cold-shouldered him and did not even bother to open the research reports.
This has turned out to be a terrible tactical error because both stocks have taken off like rockets and showered hefty gains within a short period of a couple of months.
Sunteck Realty – gain of 79% in 7 months
On 6th September 2016 when Sunteck Realty was languishing at Rs. 228, Daljeet recommended a buy on the basis that the company has “Strong visibility of future cash flows coupled with low debt and robust execution would lead to substantial value creation, initiate with BUY”.
He amplified this further:
“We recently met the management of Sunteck Realty Ltd (SRL) to understand its business and the way forward for the Company. SRL is a Mumbai focused developer having quality land banks with clean and clear titles, and premium positioning of its projects in every micro market that it caters. SRL has a project portfolio of ~23 msf spread across 25 projects, with ~7 msf BUA under execution by end FY17. With marquee portfolio positioned at the top end of each micro market, SRL has a strong visibility of future cash flows. With low debt and robust execution, SRL can achieve substantial value creation in the medium term. We remain positive on SRL’s future prospects and initiate coverage on SRL with a ‘Buy’ rating and a FY18E TP of Rs 358.”
The recommendation was brilliant though Daljeet was conservative with his price target.
Today, barely seven months later, Sunteck Realty is standing tall at Rs. 410 which means that Daljeet has pocketed gains of 79%.
SP Apparels – gain of 27% in 5 months
On 8th November 2016, Daljeet recommended a buy of SP Apparels on the basis that “Company is at inflection point with newer capacities and margin expansion resulting into better return ratios”.
He explained further that:
“SP Apparels Ltd, Coimbatore based company, is second largest manufacturer and exporter of knitted garments for infants and children’s in India. It is one of the leading suppliers for few of the international brands like TESCO, ASDA Stores (Walmart organisation), Primark, Mothercare & DUNNES etc. Also, they are licensed manufacturer and retailer of menswear garment in India under “Crocodile” brand and the business is done in subsidiary company – Crocodile Product Private Limited (CPPL). Company did revenue of Rs 5328.25 mn in FY16, of which 86.13% was exports from children’s wear with volume of 39.1 mn pieces.”
This recommendation has also turned out well because the stock has moved from Rs. 326 to Rs. 413, putting gains of 27% on the table in just five months.
Daljeet’s target price of Rs. 463 for SP Apparels means that more gains are expected from the stock.
Mohnish Pabrai buys stake in Sunteck Realty
Now, the big news is that The Pabrai Investment Fund II LP, Mohnish’s investment company, has bought 10,74,221 shares of Sunteck Realty as of 31st March 2017.
@MohnishPabrai checks into Suntek Realty with 1.7% stake as per BSE filing
— Darshan Mehta (@darshanetnow) April 13, 2017
This is Mohnish’s second foray into the realty sector. He has also bought a big chunk of Kolte-Patil Developers.
The entire investment rationale of Sunteck Realty has been explained by Nigel D’Souza in a simple and concise format.
Ashish Kacholia increases stake in SP Apparels
Ashish Kacholia has been aggressively increasing his holding in SP Apparels.
He started his innings in September 2016 with 6,11,856 shares.
By December 2016, his holding had swelled to 9,25,000 shares.
As of 31st March 2017, the holding stands at 11,25,000 shares, comprising a whopping 4.47% of the equity capital.
It is obvious that Ashish Kacholia is expecting to reap multibagger gains from SP Apparels.
SP Apparels has a target price of Rs. 545: Systematix
Systematix has opined that SP Apparels will prosper on the logic that “Its retail business under the ‘Crocodile’ brand is expected to grow 2x, backed by an increased focus on the retail segment and aggressive stores expansion across India”.
Systematix has predicted a target price of Rs 545 for SP Apparels which means that gains of 32% are due from the stock.
Conclusion
There is no reason for us to despair having missed out on Daljeet’s recommendations to buy Sunteck Realty and SP Apparels. The endorsement of the recommendations by Mohnish Pabrai and Ashish Kacholia makes it clear that a lot of gains are still in store for us to feast on if we move fast!
These compnies belong to two important sectors ,Realty and Textiles.DNA of Realty sector is Corruption, and after emergence of strong media ,active judiciary and alternate politics of anti corruption, big ticket corruption is stagnating and even money generated is being not invested in Realty due to ovet vigilant IT deptt.So realty sector will under perform for long period inspite of noise by stucked big investers for last three years.What ever growth will be there ,will be from salary and small business class.Housing Finance compnies and paint compnies (as consumption in old houses also )are better choice ,although no doubt few compnies in worst sector can also make money,but small investers should leave those to experts.Similary Textile sector is very difficult sector ,where majorty of compnies dont make money but just survive In textiles sector better choices are proven efficient leaders like Vardhman textiles, ,Arvind ,RSWM ,although few temprary fire works by small time operters can not be ruled out .
I agree with your comments. Makes sense to me.
Kharb Ji, your point makes sense but at this time all these stocks are not in buying comfort. RR would be on higher side…
@admin – not able to download the reports. Are the links working for anybody?
What is the error showing? Try the direct links:
Sunteck Realty
SP Apparels
Realty companies evaluation based on land bank however clear titles it may be is very dangerous. Too many variables (economy, interest rates, RERA, Budget, Municipality, State rules, commodity prices etc..) makes the sales potential. Not for very long term definitely.
Apparels is too much export oriented play and subject to international cotton prices and competition. Again not for very long term investment.