INVITATION TO CONSTRUCT A FORUM PORTFOLIO

INVITATION FOR CONSTRUCTING A FORUM PORTFOLIO : I have always believed that more money is being made by the “market gurus” in recent past purely on account of our herd mentally. One gets a headline either on this or any one of the hundreds of stock forums that Guru1 has bought into a particular share. Every retail investor would flock to buy it leading to upper circuits for few days. Well, the price has justified the Guru’s purchase. But does anyone go through the fundamentals. Not too many. Further, these Gurus get easy access to the managements. The developing stories are known to them much earlier than the general investors. Based on these, positions would be built. And then the prices would shoot up once the story became public, increasing their aura. Unfortunately, these games were being played in small caps, mid caps with low liquidity. Once the slide came it was sharp and uncontrollable as everybody including the gurus wanted to somehow get out. Everybody suffered in the process. Some depended more on their own understanding or on reports that talked about PE, PEG, ROC first and price later, probably suffered slightly less.

Having posted major part of my portfolio in Nov 2015 on this forum, which performed well for next 6 months, I wrote the following on 15th June 2016.

“ Well this ( i.e. Reposting of previous post) is not to claim any extraordinary expertise but to prove the point that members on this forum are quite competent to discover nuggets in the market full of nonsense where big investors are more often than not fooling the gullible investors by rigging share prices of worthless scrips. Suggest all members to come out and advise their value picks. I am sure together we can build portfolios that will out perform any benchmark. Out of above scrips I believe all 4 chemical cos. Akshar(267)/Asahi(203)/ Bodal(107)/ Atul(1985) still have lot to offer. TVS Srichakra has under-performed but is a great scrip. Available at PE of about 9, I don't think 1 can go wrong as it has very low debt, adding capacity on regular basis and an OEM supplier to an exploding 2 wheeler market.”


There was no response by any regular member on this invitation. This proved one point to me that although on this forum there was lot more talk about fundamentals, participants were still more keen to follow the “news” about Guru shares than really spend their own time and energy to figure out what is best for them.


I AGAIN INVITE ALL OF YOU TO ACTIVELY LOOK INTO YOUR OWN PORTFOLIOS AND LIST OF PROSPECTS and let everyone know why the same should be bought. Request some of the stalwarts of the forum Kharb/ Shakti Khanduri / RMS Challa / Srouta Mukherjee with large following to help in this. To start with I will be posting details of my portfolio in next few days. All comments are welcome. .,


THOMAS COOK – CMP – 265: Been in this for almost 4 years. Have written about it on this forum earlier also. A highly diversified conglomerate in Tourism, Forex and Hospitality business. Promoted by a well established MNC owned by an NRI. It has an asset light business model. Have spent lot of money on no. of acquisition ( 80 odd subsidiaries) which will add to earnings in next couple of years. Restructuring announced which will transfer Quess shares to its own shareholders. For every 100 shares of TC one would get 18.89 shares of Quess. At current prices, TC will be in hand @ 75. TC is almost debt free. As it has already capitalized its gains in Quess ( almost 6000 crs) its Book Value has improved to Rs. 235/-. Tourism is expected to grow steadily with improvement of disposable incomes in coming years. Promoters hold 67%, Institutions and MFs 20.2%, Individuals – 12.8%. Thus low floating stock. One can expect a 20% gain in next 6 months and much more if held for 3 to 5 years.

 

Terrific idea. I am not a stalwart here, but looking forward to this thread.

 

Very good informative article. Whether RD is announced for the allotment of shares of Quess. I have checked the BSE website, it seems that still the RD is not announced.

 

Sorry but what's RD?

 

@ fundoo Its a good post. I am worried whether is there any value on this overheated market? For whatever value suggestions that wud be given ..hopefully by wise members..shud be picked up during corrections? Or would it be like timing the market which is a bad word..

 

It is Record Date for the allotment of shares

 

@Sreekanth Reddy And @Mr. Joshi : The allotment of shares by Quess to shareholders of TC is a long drawn process. It may take upto 9 months to a year to complete this exercise. Hence no record date so far and not likely in next 3 months. TC results are out for the quarter. Although nothing spectacular, they are there for the first time without Quess. Consolidated EPS is about 2. It could be slightly higher but for introduction of Indian Accounting Standards leading deferment of revenues from Sterling. These revenue will accrue from next quarter without corresponding increase in expenses. Leading to further improvement of EPS. Debt is down to 100 crs. and the Co. will be fully Debt Free at the end of FY19. Its forward tour bookings are up 34% in first quarter which sounds pretty good. A 15% to 20% revenue growth could be a norm for coming years. Without debt and an asset light business model, the CAGR of PAT could be much higher.

 

VISAKA INDUSTRIES LTD. - CMP 590 : My Second Portfolio holding. Quarterly results for June 2018 are fabulous. Quarterly EPS of 19. Full year EPS for FY19 expected at 60+. Available at a PE of ~9.5. Will post some details in a day or two.

 

That was a very informative and exhaustive information. Thanks once again.

 

VISAKA INDUSTRIES - CMP - 602 : Additional details. Engaged in manufacture of Asbestos roofing ( 90% of sales in rural area) and interior construction materials – V Panels (Sold entirely in urban areas). Doubling Capacity of V Panels. Expanded capacity to start Commercial Production in Sep 18. Launching first time in India solar panel fused roofing sheets shortly. Eliminates need for steel structure for installing solar panel on rooftop. Commercial production to commence in Sep 18. Expansion funded from internal accruals.

Pan India manufacturing. 12 plants. 2nd largest player in India in Asbestos Cement sector.
Also manufactures blended yarn. 25% export 75% domestic sales.

Market Cap ~ 950. FY18 sales 956 crs. Available at Sales/Market Cap of ~1.
High ROCE ~ 20%, ROE ~ 16% and ROA ~ 10%.
Low PE ~ 12 on trailing 12 months basis. PE ~ 10 on FY19E EPS of 60+. EPS growth 55% in FY18 and estimated at 45% in FY19. PEG of 0.25.
Has achieved a CAGR of 45%+ in PAT in last 3 years. A trend likely to be maintained at least in FY19 and FY20.
Small Equity ~ 16 Low Debt/Equity ~ 0.63. Constant High promoter Shareholding at 41%. No pledge.

These nos. do not taken into account benefits of capacity expansion and new product launch.

I believe all this can easily get it a very conservative PE of 15 leading to a 50% increase in next 1 year.

 

Fundoo thanks.. I am not studying like you but do appreciate your efforts.. Pls keep it up..nice work.. hope other stalwarts on forum also contribute and share their knowledge and picks..will try some copy paste.

 

VISAKA INDUSTRIES - GREAT FUTURE : - Any body seriously interested in investment should spare some time and listen to the interview of Mr. Vepa Vallinath whole time director and CFO of the co. on this link :