Mudar Pathreya is a well-known veteran and specialist in picking micro-cap and small-cap stocks. We have so far not paid attention to his stock picks because of our perception that such stocks lack in corporate governance standards and are of alleged “low quality”.
However, after the clarion call by Shankar Sharma that micro and small-cap stocks have the potential to give multi-bagger returns, it is incumbent upon us to pay due attention to Mudar Pathreya’s stock recommendations.
Track Record Of Mudar Pathreya’s Recent Stock Recommendations:
Let’s take a quick look at the recent stock recommendations of Mudar Pathreya and see how well they have performed:
| Date of reco | Name of stock | Price on date of reco (Rs) | CMP (Rs) | Gain/ Loss (%) |
| 16.11.2015 | PTC India Financial Services | 42 | 40 | (4) |
| 16.11.2015 | TAKE Solutions | 192 | 182 | (5) |
| 16.11.2015 | HEG Limited | 162 | 188 | 17 |
| 29.11.2015 | Cosmo Films | 275 | 322 | 17 |
| 14.12.2015 | APL Apollo Tubes | 680 | 937 | 38 |
| 27.12.2015 | Jubilant Life Sciences | 415 | 335 | (19) |
| 27.12.2015 | SpiceJet | 69 | 68 | (2) |
| 27.12.2015 | Dish TV | 98 | 103 | 5 |
| 27.12.2015 | Navin Flourine | 1888 | 2334 | 24 |
| 27.12.2015 | Indo Count Industries | 1063 | 894 | (16) |
| 25.01.2016 | Mercator | 22 | 45 | 107 |
| 22.02.2016 | DLF | 89 | 162 | 82 |
| 06.03.2016 | GHCL | 108 | 227 | 109 |
| 03.04.2016 | Uniply | 149 | 173 | 15 |
| 17.04.2016 | Maithan Alloys | 150 | 399 | 165 |
| 06.05.2016 | GPT Infra | 224 | 234 | 4 |
| 15.05.2016 | JK Tyre | 83 | 90 | 8 |
| 13.06.2016 | Tata Metaliks | 365 | 428 | 17 |
As one can see, a few stocks have given sensational returns in a short period of time. Maithan Alloys, which was recommended on 17th April 2016, has given a spectacular gain of 165 in just three months. Similarly, Mercator and GHCL have given gains in excess of 100% in just a few months.
It is also notable that out of 18 stocks, only five have given negative returns and that too of small amounts.
Four Dark Horse Stock Picks:
Now let’s look at the four dark horse stocks recommended by Mudar Pathreya on 30th May 2016:
| Dark Horse stock | Price on date of reco (Rs) | CMP (Rs) | Gain/ Loss (%) |
| Pasupati Acrylon | 22 | 27 | 21 |
| Saksoft | 226 | 242 | 7 |
| JHS Svendgaard | 33 | 38 | 16 |
| Freshtrop Fruit | 105 | 92 | (13) |
Mudar Pathreya has provided a detailed explanation on why he regards the aforesaid four stocks as “dark horses”.
As one can see, even in the short period that has elapsed since the recommendations, three stocks have notched up positive gains and only one has given negative returns.
While Failure Of A Micro-Cap Stock Can Mean Loss Of 100% Of The Capital, Its Success Can Mean Infinite Gain:
It is well known that micro-cap stocks have a high success and high failure rate.
This is best exemplified by the two stocks recommended by Mudar Pathreya six years ago, namely, Somany Cermaics and MSP Steel. Mudar’s logic for both stocks was very convincing. However, while Somany Ceramics has become a ferocious 24x Multi-Bagger in the six years that have elapsed, MSP Steel has lost 68% of its value.
However, this also exemplifies another point that the risk-reward ratio is in favour of such investments because while the loss is capped at 100%, there is no upper limit to the gains. One can make an infinite amount of gains, if the stock becomes a success.
Basket Approach Required:
So, if one has a basket of micro-cap stocks which are judicially selected and if one has the temperament to bear a 100% loss in a few stocks, the investment exercise can become very worthwhile!
Well, I’m not very impressed with the performance of Mudar’s stock picks! I seem to be doing better with my micro cap picks! Out of the mentioned stock list I am currently invested in Dish TV, PTC India Financial Services and Freshtrop Fruits. A few of the micro caps that I bought over the past year and which have given me stellar/very good returns are Store One Retail, Vidhi Dyestuff, Ruchira Papers, KRBL, Indian Toners & Developers, Gokaldas Exports, Chemfab Alkalis, Next Media Works, Poddar Pigments, Star Paper Mills, Ram Ratna Wires & TV18 Broadcast. Subex is the other turnaround story that I am betting on. I totally agree that Loss can only be 100% whilst gains can be infinite!
Dear Vinaykumarji,
Out of your above list, I am having KRBL, Chemfab Alkalies, Vidhi Dyestuff and Camphor and Aliied……..are these stocks capable to be a multibaggers ?
Pasupati Acrylon looks very very interesting. Could be a dark horse. If June quarterly results are good stock could double in no time. Company has reduced debt. OPM has jumped significantly. Downside is that promoters have pledged 26% of their holding.
Post debt payment, plede shares would be released. Awaiting for the results
i think the blog is running short of analysts.
so new faces roped in
i was reader of this gentleman in early90s
i donot find him in et
Have been reading Mudar since 1990s -He recommended Cheminor Drugs way ahead of others. Sad to see he still (in 2016) recommends microcaps by promoters with no track record like his old pick GoodValue Marketing. Mudar should come out of finding “microcap multi-bagger” mindset.
I too used to read stock analysis of this gentlemen during 90s and have lost huge amounts in following his recos.
To be specific he was good fan of Viraj Alloys and Shah Alloys during those days and wrote analysing articles on them. I got lured without my own analysis and badly burnt my fingers as these companies are in deep sea now. (Viraj is virtually non-existant ! Vanished with my money !!!) Guys…just take his reccos with a pinch of salt, do your own analysis and then only take a plunge !
This were his recos on May31, 2016. But it’s published only after 2 months? Why ?
After reviewing each of his stocks my view is that Mudar’s findings are not actually recommendations but just ‘his thoughts’. His writings are peppered with a lot of style but are cursory with little substance. At best they can be looked at as pointers for further research and analysis before actually taking a plunge investing in any of his ideas. Having said this my view is that Pasupati Acrylon and Saksoft could indeed be dark horses!
#Nivezareview ::
Most of the stocks in the list are fundamentally stable and are decently valued as well. Picking the stock at cheap levels is highly important. Betting on Micro caps only could be invitation to losses as well. As far as long term vision is concerned, I prefer to go with fundamentally stable stocks where down side protection is more. Even though I don’t find any immediate trigger to the stock, it is ok but buying any stock at higher levels should be avoided. In the list, Take Solutions and Tata Metaliks were better among.
Stock Market tips
JHS Svendgaard is also being talked about a lot these days.
Any follower – any news on this?
Can anybody is here focus on technical / fundamental analysis on KRBL ltd with short to midterm target ?
The crux of investment is to study the B/S of the company. B/S tells abt the health of the co. Even a micro stocks with well managed co can be a potential multi bagger, One of the stock with good B.S which I have invested is Alufluride. I invested in Jan 15 at Rs.14. CMP is Rs58… As the co has decent B/S and very low PE when I invested..Strong B.S is the crux. Now why one lost money in MSP steel.. Very poor B/S with high D/E ratio.. IF you read the results… The co had operating profit but ended in loss due to huge interest burdern.During the downturn in the industry, interest factor kills you and that what happens with MSP..
A stock worth paying attention to is bse listed solitaire machine tools ltd.