Exactly a year ago, I diligently reported on Motilal Oswal’s 18th Wealth Creation Study. I pointed out that the Study has given a detailed explanation on how to find multi-bagger stocks. A ready-made check list of factors to be borne in mind while picking stocks was also given.
More importantly, the wizards at Motilal Oswal (Raamdeo Agrawal and his team) also gave us a readymade list of five stocks. Each of the stocks scored well on parameters such as ROE, PAT growth, P/E, competitive moat, ethical & efficient management. A detailed explanation was also given on why the stocks deserved to be a core part of our portfolios.
You will be astonished to know that four of those five stocks have outperformed by a handsome margin.
Symphony took everyone by surprise by giving a mind-blowing 377% return. Bajaj Finserv is second with 85%. Bajaj Corp is third with 68% and Zydus is fourth with 44%. Cairn lost 25% due to the melt-down in crude oil prices. The average return, assuming we had invested an equal amount in each of the five stocks, is a fabulous 110%.
| YOY Returns Of Stocks Chosen In 18th Motilal Oswal Wealth Creation Study | |||
| Symphony | 414 | 1975 | 377% |
| Bajaj Finserv | 699 | 1294 | 85% |
| Bajaj Corp | 204 | 343 | 68% |
| Zydus Wellness | 538 | 780 | 44% |
| Cairn India | 317 | 240 | (25)% |
| Average returns | 110% | ||
Anyway, now the important point is that we need to treat the Motilal Oswal Wealth Creation Study Reports with more respect than we have been according them. These reports are prepared by wizards like Raamdeo Agrawal with a lot of experience and knowledge and after a lot of in-depth study and we should not take them for granted.
The latest 19th Wealth Creation Study report, shortlists seven small cap stocks as potential 100-baggers. I have analyzed four of these stocks, Atul Auto, Suven Life Sciences, Shilpa Medicare and Granules India in some detail.
I suggest that each of us should carefully study these stocks and fully understand their positive and risk factors. Thereafter, we have to take an independent and informed decision in the matter. We should buy the stock only if we have the conviction to hold the stock for at least five years and have the stomach to bear volatility in performance and price. We should also remember that if the stock picks don’t work out for any reason whatsoever, we have to take self-responsibility and not blame anyone else.
The average is skewed because of Symphony. Also, Judging them with one year of performance is not good, they need to judged in a longer time horizon on 5-10 years.
By the way anybody whose portfolio has moved less than 100% in last year has underperformed.
Correct one! Anyone whose portfolio has moved less than 100% in last year has underperformed. Stocks compared to last year and that is also by experienced investor is not good but just OK when it has given 100% in this market.
I don’t know why n how the writer of this article forgot to mention Page Industries which was the major part of the discussion in the panel by Kenneth Andrade