Your picks looks quite logical. Be reminded that majority of the PSU’s have only destroyed wealth in the past although they have high moat or monopoly sometimes. Also, with these companies there is always an issue that govt will suck their cash away by giving some foolish reasons or doing any foolish things (e.g. amalgamation, acquiring debt laden company at higher valuation etc.)
I think in terms of corporate governance PSU’s are very risky. Key points to think of:
– Promoter is not steady (read govt. changes every 5 years or even sooner!!)
– Cash is sucked given high govt deficits
– Employees have no incentive to work efficiently (they never get fired or promoted to higher level if they underperform or overperform respectively)
| Subscribe To Our Free Newsletter |
