PORTFOLIO UPDATE!!
1] VGUARD
The results were quite disappointing and the stock has shown similar movements. Thanks to my lower average price I am able to exit at 20% ROI, in just 6 months. The business is good but I feel some other momentum sectors and some deeply beaten down stocks can give better returns going forward.
2] HDFC AMC
For last several quarters, FII holding in this stock was in a downward trajectory but this Sep quarter there is a 5% spike in shareholding. This has been accompanied by a good retracement from the trend bottom of 1700 and is currently near 2100. The stock is beaten down but is currently trading higher than the 50EMA and 20EMA, the latter is about to cross the former indicating positive momentum. It is also performing a double bottom and a breakout is what it needs to go even higher. The stock has discounted the competition from the ETF space and is moving ahead. The business is strong. There are some negative factors like reduction in expense ratio but I have observed them going higher each quarter. So going ahead we can see stabilization and growth in earnings given the strong momentum of SIP investments by domestic investors. They are the sole reason for the behind the outperformance of Indian markets since last year.
It is trading at 32 PE while the 5yr AVG is 42PE. Now one can argue, what if the earnings fall which will decrease the EPS and increase the PE? Well in that case the PAT has been stable and there is consistent growth in topline. Considering a modest 10% growth in earnings this year, takes the estimated PAT to 1450, valuing the share at 40PE, the price per share according to me is 2730. At current price, it is good value buy.
This is currently a swing trade. I have not yet decided if I want to include this in my longterm portfolio.
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