Parag Parikh, the veteran value investor, is an authority on “behavioral finance”. Using his expert knowledge of the subject with a strict discipline to stick to the beaten path and a dash of common sense, Parag Parikh is able to consistently find stocks that offer a high margin of safety coupled with the prospects of a reasonable gain.
On an earlier occasion, Parag Parikh has revealed secrets to finding winning stocks.
Three recent examples of Parag Parikh’s stock picks exemplify this brilliant strategy.
In March 2014, Parag Parikh homed in on two stocks that were in slumber but appeared to have potential: MT Educare and The Ramco Cements. He bought a chunk of 2,49,990 shares of MT Educare and 60,000 shares of The Ramco Cements.
Parag Parikh’s timing was perfect and both investments have turned out exceedingly well. Assuming that both purchases were on 15th March 2014, MT Educare is up a whopping 54% while The Ramco Cements has kept pace with a 50% surge.
In May 2014, Parag Parikh decided that Navneet Education deserved closer study and so he picked up 15,412 shares. Another stock that met with approval from Parag Parikh’s discerning eye is the banking behemoth ICICI Bank Ltd, which got 132,651 of its shares scooped up.
Interestingly, with this move, Parag Parikh has proved that he is not partial to small and mid-caps and is also willing to look at large-cap behemoths where the situation justifies it.
These investments have also turned out well. Assuming the purchases were on 15th May 2014, Navneet Education is up 48% while ICICI Bank is up 6%.
Now, all eyes are on Parag Parikh’s latest mega stock pick, Google ‘C’ Class shares. As I reported earlier, the PPFAS Mutal Fund holds a mammoth quantity of 10,920 Google ‘C’ Class shares worth Rs. 38 crore. Parag Parikh has also come out with all guns blazing in favour of the stock saying it has a “very strong moat /competitive advantage”. He has also argued that the stock is “undervalued” and has potential to give hefty profits.
Interestingly, Google has dethroned all of the other (Indian and foreign) stocks in the portfolio and has emerged as the single largest holding of the PPFAS Fund with an 8.21% allocation.
Whether Google lives up to the faith that Parag Parikh has reposed in it remains to be seen. Watch this space!