Porinju’s investment philosophy is to find stocks of low profile companies which are in the doldrums owing to temporary problems. Such stocks are available at a throwaway price. The downside is limited and the margin of safety is high.
Porinju buys a truckload of such stocks and waits patiently.
A slight uptick in the fortunes of the company can send the stock surging up, giving Porinju manifold returns.
Porinju is conscious of the fact that this strategy does not always work out because some stocks will remain perpetually in the doldrums. However, if you buy a proper basket of such stocks, the performers will usually outnumber the non-performers and give a decent return, is his belief.
Jubilant Industries fits in nicely into Porinju’s scheme of things. It reported dismal Q4FY15 results and its stock price tanked like a ton of bricks.
|Jubilant Industries Quarterly Results|
|Particulars (Rs cr)||Mar 2015||Mar 2014||%Chg|
Porinju waited for the selling to abate before launching an aggressive no-holds-barred buying action. In one swift move, Porinju scooped up a truckload of 60000 shares at Rs. 100.96 each, laying down an investment of Rs. 60.57 lakh. The stock went spiraling up and tripped the UC of 20%.
Jubilant Industries, though a micro-cap with a market capitalisation of only Rs. 140 crore, is quite a well known player in the agro and polymer products segment. It is also quite diversified. Its product portfolio includes a wide range of Crop Nutrition, Crop Growth and Crop protection products and Performance Polymers products comprising consumer products like Adhesives, Wood Finishes; Food Polymers and Latex such as Vinyl Pyridine, SBR and NBR latex. It also operates five hyper markets in Bangalore and IMFL bottling plant at Nira.
Now, we have to wait and watch how long it takes Jubilant Industries to turn profitable and fill Porinju’s coffers with gold.