Posts in category Value Pickr
MTAR Technologies – A wager on innovation meeting economies of scale (15-02-2024)
Is it available online yet?
Cant find on their site also!
Ujjivan Financial – Small Finance Bank (15-02-2024)
When it was listed the BVPS was ~18 IIRC. At the price you mentioned, the PB was ~3x.
Before the market realised that UFSL should get a hold co. discount, the market used to value it at a higher PB multiple as well. Then the weakness of the business model came to light once with DEMON and then COVID.
During COVID, the PB compressed dramatically as the market overvalued risk and 1 yr fwd PB was less than 1x. Those who understood the quantum of risk materializing and the discrepancy in the market’s valuation reaped the rewards of the subsequent rerating.
Now, one must run a reverse DCF with growth, ROE, and COE parameters to judge a fair multiple. Full cycle credit costs and resultant average multi-year ROE is needed as inputs. Since the loan book itself is changing it is very difficult to accurately estimate this.
As I have discussed here before, a broad range of fair PB for a financial company growth at 20+% and 15-18% ROE is 2-2.5x. During periods of fear, the market will overvalue risk and PB can go below 1x during euphoric times when risk is undervalued the market can even assign a PB of 3-4x.
One must recognize where we are in the business, valuation and market cycle and try to play it accordingly without getting affected by the stories floating in the market. Going against the crowd is tough intellectually and emotionally.
If we buy or sell at the wrong time one of the outcomes is as you mentioned, the other can be of a famous Pune-based PMS which exited at a big loss at the bottom in Apr-22 and missed a subsequent 4x opportunity.
My portfolio updates and investment journey (15-02-2024)
If you can share, what are some bonds that you have purchased that have a higher yield (10-12%)? I have always been concerned that interest payments may be delayed on these higher yield bonds (for whatever reasons) even if I am not looking to sell. In your experience, have you ever faced that issue or is that not a risk to worry about?
Buy Unlisted Shares (15-02-2024)
Can’t open the link. Can you mention the content?
The Anti-Portfolio (15-02-2024)
Absolutely, am still learning this and realize that it can be tricky since it requires much more deep technical/industry knowledge, in contrast the Reversion to mean strategy is easy to follow.
Had a few shares which i was contemplating selling due to the rise, but looking at the new areas you listed above, looks like there is growth still. Thanks!
The Anti-Portfolio (15-02-2024)
Yes, I anticipate strong growth so historical average can be a misleading statistic sometimes.
PFC is getting into infra finance, power is growing, power now needs double the normal investment trend since renewable, mostly solar, only works in sunshine hours, so thermal, nuclear etc need same amount of backup capacity. In addition, you need pumped storage or batteries for some balancing.
Phantom Digital Effects Limited (15-02-2024)
He resigned on 29 Dec 23 and now relieved from his duty post 45 days. So its not as abrupt or unplanned as it seems. It is only disclosed now…
PSP Projects – Construction Company (15-02-2024)
PSP PROJECTS got project worth of 630.29 Crores (excluding taxes) for Construction of Gati Shakti Vishwavidhyalaya at Vadodara for Rail Vikas Nigam Limited in Govt. Category. The project is to be completed within 30 months.
CARE Ratings Limited (15-02-2024)
I disagree.
Care has been gaining markets share in BL continuously.
Past 2 quarter Rating Div growth has been better for CARE
Amt rated in Rs Trillion