The PE of Bhansali is 7.58. The ROE is 42, but the ROCE is still more impressive at 56.8. These have often made my mouth water. It is often talked of highly, but seems to stagnate. Yesterday saw a video of Ashish Chugh where he was recommending buying beaten down stocks if you want a multibagger. But he also said that sometimes a stock may lay dormant for four five years and then come to life. My doubt is because of the shares like Bhansali. The fundamentals appear ok, but it is refusing to come to life. An investor would really feel silly if he remains invested for for years and then finds that his investment was dud. Any advice?
My way usually is to combine momentum and value picking. When, for example, everybody was talking of API, and I was late to enter it, I went looking for cheaper stocks in that genre. This landed me with Laurus. Similarly among the pharma stocks, I found Caplin. In logistics I have found Tiger.
Sometimes it clicks, at other times it doesn’t. Quite often I have lost confidence in myself and sold early. And the stocks, waiting for that moment, shoot up immediately.
Flaw in my scheme is that in depending on PE/RE/ROCE, I am accounting for its past earnings. The right way would be to find stocks which would have great future earning.
Now, here is a question: how do we find a stock’s 2024 earnings (“its 2024 earning is discounted at 25x”)? Is it a guess or we can base it on some definite data? Is it the past CAGR?
I feel like I have been promoted to a senior class without having mastered the syllabus of the junior class sufficiently.
Need advice.
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