Posts tagged Value Pickr
Agro Tech Foods – A small cap MNC foods FMCG (02-12-2015)
Disclosure: Have been investing since last 2 years and continue to add on dips.
Company: This was an subsidiary later acquired by Conagra Foods USA. They hold close to 51% in the company.
Products:
Crystal edible oil (Non strategic brand and company intends to phase out slowly)
Sundrop edible oil
Act 2 popcorn
Sundrop peanut butter
Act 2 snacks
- Positive Triggers and opportunities:
Premium edible oil is duopoly between Sundrop and Saffola
Premiumization and shift away from local brand edible oils
Health consciousness for better quality edible oil
Opportunities in new products like snacks and peanut butter
Huge brand portfolio with parent company
Risks:
Conagra not doing well and some restructuring going on
All conagra brands may not find favour with Indian taste
Financials: One can look at details on www.atfoods.com .
At current price it trades at PE of 38 and MCap of 1400 cr
Price to Sales : 2 times
Topline and bottomline have been erratic due to change in product profile, new product launches, Ad expenses, tax rate changes etc.
Opportunity:
Compare Unilever/P&G parent Mcap to Conagra: Approx 8-12 times
Compare Agrotech Mcap to HUL: 100 times
This is not for folks who are capable of chasing 25%+ opportunities every year.(I know there many on this forum) It is more for laid back investors who lack capability of analyzing Q financials threadbare( like me ) and who don't mind lower returns during the journey as long as they can hold it for a decade for decent returns.
Any thoughts
TAKE SOLUTIONS LTD- will you take it? (02-12-2015)
The section "Delivering More Effective Clinical Trials" is very good and particularly related to the kind of work Take does. Take's management had explained the same thing in an interview (probably the youtube link that I shared above). Now after hearing the rationale from a second source I could relate to it better.
In the last conference call management gave this overview of their business. Ambit research has put that matrix nicely here.
Out of the above 3,
- Consulting : 20% contribution to revenue and has highest margins. Competitors in this space is Deloitte...
- Technology - 30% contribution and medium margins. I think this is implementation activity for products from Oracle like Argus Competitors in this space are TCS/Infyetc ? Business is not that sticky.
- Functional Services - 50% revenue contribution. Medium margins. Competitors are Octagon research , ISI, Medidata
Trending Sectors for 2016? (02-12-2015)
i feel home loan cos will do well in mid 2017 due to delayed trickle down of lower rate structure.
Saksoft Ltd – Value buy in an exploding mobile and tablet market (02-12-2015)
Hi Dhanvarsha,
Thank you for your observations. Even I am not sure why operating margins are low (I mentioned tht in my note). Regarding stock running up in last 7 sessions, it has nt much relevance to its business since even at this price the stock is available at reasonable PE of 10 times FY 2016.
Trending Sectors for 2016? (02-12-2015)
Though the index has gone down by 15% in 2015 but there are few sectors which did very well.
Picking up average of top performing 4-6 microcap and small cap in each sectors of the I get returns which look roughly like this. It’s true each sector will have winners and losers but I kind of follow this instead of traditional index because as a value picker you are supposed to spot atleast some of these.
Sugar = 70%(only due to a recent surge in October)
LVC&HVC = 70%
Glass = 90%
Packaging = 90%
Aquaculture= 100%
Cable= 100%
Shipping = 100%
Dyes & Pigments = 130%
Ceramic/Marble/Granite/Sanitare= 140%
Telecom Infrastructure = 150%
Jewelley = 160%
IT Hardware = 170%
Textile/cotton spinning= 200%
Breweries = 200 %
Plastic = 200 %
Rice = 200%
Pharma = 400%
Few disappointing sectors of 2015 in-spite of doing well in 2014:
Courier ang logistics
Auto Ancillaries
Castings & Forgings
2-weelers
HomeLoan
Cement
Construction
Paints & Varnishes
agrochemical
Few sectors I feel are likely to do well in 2016:
agrochemical
construction
cement
HomeLoan
LVC&HVC
Saksoft Ltd – Value buy in an exploding mobile and tablet market (02-12-2015)
this stock run up too fast in last 7 trading session its all time low is 26 and operating margin is not promising compare to other company trading at very rich valuation i am tracking this co
Socially Responsible Investing? (02-12-2015)
Dear Nishant,
This will be a long post so please bear with me.
I saw your VP intro. and my situation is similar to yours. I manage the family portfolio: this means that I have to act with great responsibility to ensure that the capital is protected.
I actually apply the 'inner scorecard' and the indicated rules to decide what NOT TO BUY.
Typically, Many of us will have some standard AVOIDs like Not buying badly run companies, companies producing "me too products" with low pricing power, low promoter holding, low integrity management etc. etc.
To list Specific dislikes based on my individual values and experiences:
- Tobacco - zero positive and poses active and passive danger to our lives.
When I earned the confidence of the family to start managing the portfolio in 2011 the first decision I executed was to liquidate ITC (about 30% of the portfolio) which was a several decades holding.
I looked back often at the decision and often agonised if it was right to liquidate a hallmark holding which had the potential to continue to offer growth for years ahead - purely due to my personal bias.
However, I was fortunate to bounce this situation off one of the eminent Indian sages of value investing and came away with the conclusion that I was right to exit the holding.
As long as I am able to beat inflation while ensuring that there is optimal margin of safety for my holdings, I have the full right to invest in companies that I believe check the right boxes.
- Avanti Feeds - is also an avoid due to a personal bias. We suffered a bad business consequence during the avian flu crisis, many of our customers were poultry feed manufacturers. We all accepted mortality and annual flu outbreaks as "part of the game", but everyone was grossly unprepared for the severity with which the last crisis struck. Several of our customers were bankrupt, we lost all our profits earned over a decade and closed operations. A major disease outbreak is a possibility for the shrimp industry and hence Avanti is a definite avoid for me.
As far as companies that pass the "avoid" criteria and ultimately make it to my "BUY" List- I have a varied basket:
A. Companies I can consider excellent and am happy to continue to hold as a core long term holding (assuming something does not radically change and secular earnings growth of 20% p.a. are achieved / a better long term secular growth story does not appear), they are:
Page Industries, Eicher Motors, Gruh Finance, HDFC Bank.
Pharmaceutical Companies such as Shilpa Medicare, Torrent Pharma, Alembic Pharma, Granules Ltd. all hold promise and if they continue to deliver year on year I am happy to continue to hold them. (I take this opportunity to acknowledge the assistance of @hitesh2710 for his kind and patient assistance to a number forum members queries on the pharma sector)
I believe quality Midcaps like Navin Fluorine resembles PI industries 5 to 6 years ago. There is a recent HDFC Securities report which you can refer to - elaborating the tailwinds. Good management and execution capability now it remains to be seen if they can deliver in the coming years.
Niche KPO company EClerx has been a holding for sometime, and will continue to be as long as earnings growth is decent. Tata Elxsi also is a holding and seems to have earnings momentum.
There are other speciality chemical companies, which are also discussed on this forum which are pretty interesting.
I have bought companies like RBL Bank and Pru ICICI insurance early and offmarket, and believe that such companies have the potential to offer secular growth in the medium to long term.
I also buy turnaround stories (E.G. Dharamsi Morarji) though I may switch out of turnarounds faster - if they achieve what I consider as fair valuation - or if a better turnaround presents itself.
In an ideal world (time permitting) I would have liked to do more active scuttlebutt, meet emerging companies and try and buy them really young, but I have professional commitments and enjoy my work - so I am happy to apply whatever time at hand - and be a hobby investor.
My ability to grow as an investor is entirely owed to the ability of great individuals to put on paper / internet / forums like ValuePikr their learnings, experiences and thoughts - which help me evolve. My gratitude to all.
The word "inner scorecard" is inspired by writings on this philosophy. Here is text of a mail Prof. Bakshi sent to his students on Inner Scorecard v/s Outer Scorecard:
https://www.evernote.com/shard/s41/sh/299cb3b1-85ec-4744-8c55-075ad8f9f1e1/c2f2e8fc0726b8f9
Wish you all the best and much success with your investment journey.
Very Best regards,
Aniket.
Disc: Stocks discussed hereabove (other than the avoids) are held by me in my Portfolio. These are NOT buy recommendations. Please do your own homework.
If you CAN’T BOTHER to research/present a BALANCED view with decent RISK assessment, you have NO RIGHTS to start a thread on that business (02-12-2015)
I think admins have a thankless and complex job - on one hand they do not wish to monitor content - but on other hand they have to "protect" small investors so they must monitor content.From point of view of those who post there are a few who may not directly "gain " from posting or sharing their insights and may get pissed off when they are asked to share their photo ( in rare cases ) or castigated in open forum etc.After some stage of wealth creation there are many who prefer the comfort of anonymity but would like to post or participate once in a while at their comfort.Not everyone has this "altruistic " mindset - some believe who is this small investor out of the 11000 registered is he so naive that he will buy just based on a post in an anonymous forum .
Overall my conclusion - no conclusions - let things evolve.Too much school master approach will dissuade useful posters.Too much latitude will make this another TED .