I find it interesting to debate between PSU vs Private. Previously, I was never a buyer of PSU stocks until 2021-22.
But I realised, there is something all of a sudden why Many fundamental long term investors ( buy and hold) veterans like Ramesh Damani are buying in to PSU stocks heavily…Those investors must have seen some changes in working of PSU’s. A couple of years back cochin shipyard was trading at 6 P/E trailing …but today it is trading at 55…so also Mazgaon Dock , garden reach ship builders , BEL Ircon , …IREDA., REC , PFC . These trade higher not without a reason if one sees quarterly performance of last 1 year to 18 months … they have done exceedingly well.
So , if these PSU’s could do it , why not others?
Everytime , there is a OFs, the stock falls by 5-6 % only to recover back by 10% .In spite of several OFS , still these stocks have Given 4X -5X returns. There is nothing wrong in OFS. At least the govt declares/ hints at OFS well in advance.
Pvt sectors do carry out bulk deal without any prior notice and investors get trapped. Promoters sell their stake or pledge their shares without any notice .There are income tax raid , GST raid, CFO resigns and the pvt corporate stocks crash and dint recover so easily. Many Pvt corporates make profit but don’t distribute dividend at all.
So both PSU vs pvt have their ownpros and cons and one has to see risk adjusted return and time horizon and take a call that he is comfortable with.
CEO changing every 5 years is good in my view . New people take over with a new perspective. Any professionally managed company would always change their CEO every 5-6 years. It is only the family owned companies Reliance , Adani who don’t change their CEO’s - because they themselves or their children or brother sister would be kept as CEO.
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