Hi Jagrit @cometolearn , I wish you and all valuepickr forum’s readers and investors a very happy new year. May our learning never stop…
I plan to share my updates on quarterly basis. However, I shall share my thought process and recent additions. Some of my recent investments are nervous investments. I have penned my thoughts below:
Prologue
Most of my investing from 2019 to H1-2023 is based on sectoral trends (financialisation, localisation, technology adoption etc.) validated/supported by management guidance and reasonability of valuations. The pricing and competition was not much of a factor in these businesses either due to uniqueness of the businesses or large opportunity sizes. I feel lucky that I have been successful, thanks to roaring bull market where everything I do seems right and getting validated in a short time.
I understand that as an investor I need to evolve. However, I am getting somewhat nervous as the recent businesses which have come on my radar are driven by China pricing and competition. All of these businesses look fantastic based on historcial financials and I am hoping that margins mean revert and asset turnovers on new capex is maintained at historical level. Nervouseness is also driven by the fact that these businesses are mostly not-undervalued on the face of it.
The few businesses which have came on my radar recently are Clean Science, Tatva Chintan, Neogen Chemical, Deepak Fertilizers and Ami Organics. Though few of these I have been tracking for past several months now I got really interested and already own these (in 1-5% range of allocation).
Financials of Clean Science are just exceptional so I thought of screening similar businesses. Only 10 non-finance companies met the criteria. This led me to research some more interesting companies – Suven Pharma and 3B Blackbio.
Screener criteria and outcome:
Source: screener.in
Another question I face is how many stocks should I own. I am already closing in on 30 from 22 last month.
I sold Paytm - it was a very painful decision and I feel I shall regret it. I shall revisit it in couple of quarters based on concalls and company guidance. I exited Nasdaq fund also. I sold some REITs also. I sold REITs as post state election I became more bullish on equity and deployed that money to stocks.
Other than chemicals and pharma - I recently added Welspun Living. Management guiding for 15000+ crores revenue in 2-3 years and marginal margin improvement. Anticipated FTA signing with UK and rest of Europe shall be a big kicker (but that is long term trigger). Stock is available below 20PE and above 165 it shall break 2.5 years range.
Some closing thoughts on 2023 and 2024: I built up postions by end of 2023 where I am nervous and in addition I am not betting where it is clear cut case to invest in 2024. Its easiest to be in HDFC and Kotak but dil hai ki mid and smallcap me hi fasa hai. FIIs shall comeback and obvious choice for them is to buy India proxy and largecaps. India proxy is financials (banks mostly), also their prices continue to remain where they were 2-3 years back. So value, liquidity (fund flow of FIIs) and dumb ETF money shall all favour large cap banks. Still I have not bet on it yet, I dont have an answer for it, may be I change my mind. Lets see…
Disclaimer: I am not a financial advisor and nor a SEBI registered Analyst. The content shared here is only for learning purpose. All the names mentioned here are for example purpose. I may buy more, exit or partly sell the stock/bonds without any prior intimation.
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