This is true at multiple small profits can lead to disproportionate compounding profits, but the problem lies in probability. One will have to be right in large number of trades within a short duration for this to work. The capital will reduce even on break even on trade due to tax and charges.
If the profit target is 10 to 20%, stop loss would be 5% to 10% for a 2:1 risk reward ratio. A stock can fall 10% on any day with unknown reasons. This volatility will ensure that stop loss hits frequently.
For buy and hold investor, few trades with large target is required and time duration for the target to be achieved is also long. This has higher probability of achievement.
Posts tagged Value Pickr
Long term investment strategy (Buy, hold but don’t forget) (25-11-2023)
Is Buy and Forget a Myth? (25-11-2023)
Thanks. It is such stories that keep inspiring our dreams. And selling for down payment for your home? What else does one invest in stocks for? Congrats.
Is Buy and Forget a Myth? (25-11-2023)
I firmly believe in buy, hold and forget it for atleast the investment horizon period. If my assessment is reasonably foolproof and if I have conviction in the story, I will not sell unless I need cash. Short term fluctuations actually don’t bother me. Some stocks of my portfolio (over 10 years) has proved to be multibaggers for me. I bought GAEL in 20, it’s now 360. I bought Berger Paints in 62, it’s now 574. I bought CCL at 56 and it’s now 629. Bought Can Fin at 20 and sold it at 2800 as I needed cash for down payment of my home. There are few more like these. My view is that you need to find cheaper values stocks, believe in story and then (almost) forget about it.
Pragnesh’s portfolio (25-11-2023)
Why do you prefer institutional holding to be less than 10%?
Amara Raja Energy & Mobility Limited: Powering Ahead (25-11-2023)
1.On 26.09.2022 announcement on sister concern and merger: Mangal industries Limited (MIL) is manufacturing of plastic components for battery such as containers, jars, covers, small plastic parts, handle etc. The transaction near to completion stage (Consider 15 -18 months from Oct 2022) and advantage of the transaction overall improvement on EBITDA by 0.75% -1%.
Current EBITDA – 12% -13%
- AREL has acquired engineering design firm Design Alpha (DFM Softech Pvt Ltd) , is a service provider and well recognized by the DSIR and focusing on developing & designing engg solutions and technologies to solve the complex challenges.
So apart from Li business… we are looking for another development on business, management guidance and more on execution timeline.
Long term investment strategy (Buy, hold but don’t forget) (25-11-2023)
Let’s look at it from the perspective of those who don’t buy and hold too often.
1.1×1.1×1.1 = 1.331 (33% returns)
This means if you can get three trades of 10% each in 365 days (whole year). You will get a 33% return on your capital. It’s easy to find 10% trades than 100%. You can easily find 10% trades with the help of technical or fundamental approaches.
Six 10% gains compounded will yield almost double the total return of one 40% winner.
The amount of turnover is directly related to the average gains and losses and your batting average. If you’re turning your portfolio over very rapidly, you can have smaller gains and losses and a lower win/loss ratio than if you’re turning it over less.
This is the same concept as a retailer who sells a low-priced or low-margin product versus another who sells a higher ticket item with less inventory turnover. The lower-priced merchandise may produce more profit than the higher-priced goods if the retailer can make up for the profit difference through higher sales volume.
Jyothy Labs ~ Post acquisition of Henkel India (25-11-2023)
Interesting to see that M. R. Deepthi, the sister of MD M R Jyothy has resigned from the director board. I hope all is well with JLL !
Is Buy and Forget a Myth? (25-11-2023)
Most people sell the stocks that have risen while they are unable to sell the losers.
My besetting sin is entirely different. I research a stock and buy it, but quite often I lose faith in it if it falls or even when it meanders along. I start questioning my judgment. One example is West Coast Paper, which to me appears one of the cheapest stocks. When it did not do much, I started asking myself, “Are the days of paper over?”. I may look back at my decision in future and regret.
Similarly, I bought SKM Egg Products recently, as it seemed to me quite cheap in FMCG sector. Then the promoter sold some equity. And alongwith some other investors on Moneycontrol, I also wondered, “Should I keep a stock if the promoter himself is selling?” Within 20 days the stock rose by 20%.
Similarly, some months back I had scoured the list of shares at their 52 week low, and found PCBL. I bought it. Later I bought some for my daughter too. I again lost faith in my research because while the tyre shares were rising, it was not. So I sold it. Luckily I don’t tinker with my daughter’s portfolio. So, now it is 278 from 169.
My selling C G Power which I had bought cheap will rile me for a long time.
So, what lesson do we draw?
Unfortunately, I am unable to draw any lesson because one buys other shares and in a bull market the portfolio easily does well.
I keep reading about investors keeping their faith in a stock which keeps falling and then is stagnant for several years. My doubt is, need we wait for the Pardesi to return, like the heroines of the old films did, till our hair is gray? If the stock is down, shouldn’t we take another look at the company? Why wait at the platform when faster trains one could board keep going by? May be, I can enter the stock again later, when it inspires more confidence?
The meme is a light reflection on the fact that we really don’t reflect on our strategy till we are doing well.
Beta Drugs Limited (25-11-2023)
H1FY24 DETAILED NOTES: • Sales for HY24 increased by 26% to Rs. to Rs 141.3 crores from Rs 112.4 crores yoy. EBITDA margins stood at 23.64%. Net profit increased by 26%
DOMESTIC OWN BRAND – 24 % growth
International API Business business – 11.8 % growth
API Business – 2 % growth
CDMO – 34.3% growth
• GUIDANCE FOR SECOND HALF: Management expects revenues for FY24 at Rs 290+ crores aided by strong momentum across all its four segments; EBITDA margins are expected to improve further.
• Beta was among the first few companies to launch Nilotinib in September 2023 and is on track to commercialize two NDDS products in Dec 2023.
• Fastest growing domestic oncology formulations company – 43.7% Revenue CAGR of branded formulations (FY21-23) – Will be the youngest Company to cross INR 100cr in oncology branded formulations revenue.
• Launch of 4 new brands – Developed 4 new API – Filed more than 30 dossiers in semi regulated and emerging markets.
• 68 products 118 SKUs – 28 New products in the pipeline – 15 NDDS formulations to be launched in the next 2 years.
Working on NDDS like nano-particles, suspensions & dry syrups – Working on off-patented products like NIB’s & PARP Inhibitors
• Domestic Formulations: Our products are cost effective due backward integration. It is helping us to get entry in a greater number of Govt & corporate hospitals.
Strengthening our product basket. It will help to get more business from each doctor.
• International Business:
o Total dossiers to be filed in various geographies – 397
o Expected to start commercialization in Brazil by FY26
o Expected to start commercialization in Russia, Belarus and Kazakhstan by FY26
o Plans to expand in regulated markets with EUGMP audit expected in Mar-24
• API Expansion Plan: • Foraying into the European market • In FY’25 planning to file 5 CEPs • Focus on export in the nonregulated, semi-regulated, and regulated market
• Plan to establish new manufacturing facility of Cosmetic-Dermatology products in next 2 years
CONCALL:
• Sales target set for FY24 was 280cr. Will do 290cr+.
• EBITDA margins are expected to improve further by Beta’s strong R&D pipeline with differentiated offerings including NDDS, FTL, and FFTL pipeline, which will help drive strong growth over the many years to come.
• Branded formulations:
o Added 5 new corporate hospitals in India – Presence in 85-90% of corporate hospitals in India.
o Plans to increase presence in Tier II – III cities – Appointing 10-15 sales people – Government District hospitals are also providing Cancer medicines, so plan to increase presence there in tier II-III cities.
• Exports:
o Signed agreements with more than 20 partners around the world
o In 2-3 years, Exports will be a major driver for the company – 2-3 years because currently registrations and filings going on. We have our major objective to file more than 200 dossiers in the coming 2 to 3 years.
o CIS Markets and Euro-Asia Audit: Euro-Asia audit will be happening in the last 10 days of December. The Euro Asia will open upfront in the entire CIS countries. We have already tied up with 2 Russian partners to register 5 products there. The same understanding is being developed in Azerbaijan and Kazakhstan as well. After this audit, we have already got the pre-audit done and there were no major or critical observations observed during the pre-audit. So, we expect the audit to go smoothly. And we will get the certification after 3-4 months of the audit. This will again open up a new front in the CIS market as well.
o We are putting our efforts in countries like even Syria, Iraq, Iran, and Algeria also.
• API:
o We are in a position to launch two more products next month, by December end, for which we are proud to say the API has been developed in-house. The total process to develop these APIs is very tough, but with all our expertise in place and being doing all these things since the last many couple of years, we are able to crack all this in the stipulated time.
o This year, we have also added one more line in the form of Kilo lab. There are many products in API which are produced in small quantities. For that, we have added one more line with a small glass reactor.
o We aim to export our API to the coming semi-regulated or unregulated markets. We have already started conversations. We have shared our prices, we shared our CS, we have shared our samples with many countries. We expect API to give a good boom in the coming months
• CDMO: We have added 1 new injectable facility with 2 new lyophilizers for having an additional extra business for the CDMO side. This will certainly reduce the timeline of the deliveries we have been telling them in the past we’ve been committing.
The new launches, which every company takes time, might be delayed by 2 to 3 months. Our focus is to give those products topmost priority. Any product which is becoming off-patent, we offer to our CDMO partners and we offer to our own domestic market as well.
• 450-500cr revenue can be achieved with current capacity.
• Dermatology:
o Today we have around 14 products. We tend to increase this product line to 35 to 40.
o This year was very great in dermatology as we are the first company in India who has signed an exclusive contract for India and Nepal markets with some Italian partners, which will be the first-time product launch in India. This has a unique combo which will be focusing only on the top 500 cosmetologists.
o We have further planned to open up our new cosmetology and dermatology plant in the next 1-1/2 years. The land and everything has been identified. The only thing is the execution has to take place. The total amount of CAPEX we look forward to invest in derma plant is close to around Rs. 30 odd crores. The main objective of derma is to do Rs. 50-crore sales in the next 3 to 4 years in own brands.
o There will be no B2B brand, all will be B2C, and this will be promoted only ethically through the doctors. Today, we have around 110-120 medical advisers on the panel. We tend to increase it to multiple folds in the coming year
o Rs. 20 crores to Rs. 25 odd crores, we will be matching the same EBITDA margins as what we are doing at the company level.
• Tech development agreement details: Transferring tech for certain countries and getting royalties and providing them APIs – There have been agreements signed with 2 companies in the CIS countries. The tech fees have already been discussed and the agreement is already signed. Maybe in another 2 months down the line, we will be having our first transfer for the tech development. Once those products are registered, after completing the tech transfer, certainly the agreement is there for a minimum of 5 years to supply the API to them as an exclusive supplier.
• Will migrate between March-May 24 to main board
• Continuous product launches planned in NDDS- Two products will be launched this month by November end or maybe maximum by December 15th. Then, there are eight more products which are under pipeline. So, the approval process is difficult. But we have already started that. Maybe the bioequivalence and everything will take its own time. So, if we see the launches of these particular further 8 products, 2 products will be launched by March, then 2 products will be launched by June or July, and then 2 or 3 products will be launched by December end.
• We will be launching 4 new products by March and 2 new NDDS which will be the first time in India. On track to commercialize 2 NDDS products which will be launched in December 2023. The second half in terms of own brands seems to be more promising with all the new launches.
• 2 NDDS Products: The market size of both these 2 products is very large. The only thing is, we have kept in mind the targeted segment. Right now, the targeted segment in this particular category has no access to a delivery system like what we have developed for these 2 products. Let’s see how it shapes up. But as far as our revenue is concerned, we are definitely expecting huge volumes and we are definitely expecting a huge market size and a transformation from those old novel products to these NDDS formulations from the doctors.
• Particular focus on expanding human resource and manpower capabilities in all different areas to support growth.
• First is that whichever product is becoming off-patent, we have started working on those products to launch those products and we are the first one to launch in India after becoming off-patent. Second is the new products which are not available in the market, like what we did with azacitidine – injection it was available, we converted into oral. Then there was one product, enzalutamide, which was coming as a strength of 40 mg. Since the patient has to consume 4 tablets, we made it 160 mg.