Hi Valuepickr. Got a little inactive on the thread because I started my first job in July. It is a very interesting experience getting a monthly pay after spending a lot of time as a student. Suddenly your portfolio becomes larger every single month 
. I’ve been saving almost all of it, to put it back in the markets. But haven’t deployed much yet because I’m afraid the market is in the top quartile of valuations.
To follow up on market breadth, I’ve been using The Wrap by @Tar . A really helpful resource. Not only for the market breadth but also for the corporate announcements. I make it a point to read it religiously every weekend. I also try to track bulk deals at days end. These two have been largely the sources of my new ideas.
In this post I’ll just lead you through a few of the new ideas I’ve discovered and invested recently. Before going into this, I just want to remind you that I’m only about 30% invested currently. The market valuations don’t give me a lot of confidence.
The first idea I’ve invested into is Styrenix Performance. It came into my radar when one of the investors I track in Bulk Deals, Suresh Kumar Agarwal invested into the company. One of the triggers I could immediately identify related to the company was the fact that its directly related to the auto sector. With some pickup being in the segment, I felt the investment started to make sense because of the low PE the company trades at and its cyclical nature. @Worldlywiseinvestors has drilled into our heads as SOIC tribe members that sector/factor moves contribute 60% of the upmove in a stock. This is frequently the first factor I look at when investing in companies.
Another good thing I saw with Styrenix was a corporate rejig, whereby the old promoter had returned to the company and had announced an ambitious capex. Corporate Rejigs, End Sector momentum, Capex all individually are very strong triggers for a company, here I saw all of them happening at once in a company, where an investor I respect had entered already. This was an amazing thing to look at.
The second stock idea I invested in is Arvind Fashion. I had read about the company about a year back when I got to know that the retailer in India for several fancy brands was selling at 1 P/S. The fact that Ashish Dhawan, Ashish Kacholia and Akash Bhansali had invested in the company already gave me the confidence for it being a sensible value stock. But then the underperformance made me realise there had to be trigger that could act as catalyst to capturing the value.
So I didn’t take a position in the company a year back. But when recently I was going through The Wrap, and I read about Arvind selling its Sephora business to Reliance, I realised the debt could come down from it. The fact that they had sold the company at a very cheap price, sounded even better to me (you want the richest person in the country to feel like you didn’t fleece them), this prompted me to invest in the business, in the past two weeks it has shown a good performance, but I feel at 1.25 P/S it is still undervalued. The catalyst here will be long term actions of the management, I’m still not sure if they can engineer the turnaround, which reflects in the kind of allocation I’ve made to the idea.
Would love to know your thoughts on the process here, or some extra points of research you can point me towards with respect to these companies.
Look forward to interacting regularly on this platform.
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