Porinju’s philosophy that one should invest in “cheap” stocks of so-called “low quality” promoters makes him the favourite punching bag for purists who believe that investing in high-quality blue chip stocks is the only way to grow rich. The purists spare no effort to slam Porinju and his investment philosophy every time he dares to air them.
However, the fact of the matter is that while Porinju is raking in mega multibagger gains from his low quality stocks, the purists are barely eking out a living from their blue chip stocks.
Porinju’s latest stock pick in Vadilal Industries. In an interview to Bloomberg on 20th March 2015, Porinju urged investors to take a look at this micro-cap stock. Porinju’s logic was that Vadilal Industries is one of the largest players in then organized ice cream business and it has a well-known brand. “It can become a company with a market cap of 600-700 crore” in the next few years, Porinju said with immense confidence in his voice.
“Maybe they are not great managements, they are not high quality companies, but if you make a portfolio of such 10 or 12 stocks, they are going to outperform any Nifty, Sensex or Page Industries or Sun Pharmas in this Country over a period of time” Porinju added with the air of a prophet.
Well, we have to compliment Porinju for his brilliant analysis. On that fateful day when he made the recommendation, Vadilal Industries was quoting at Rs. 240. Today, barely 100 days later, Vadilal Industries stands firm at Rs. 762. This means that Porinju and his vast legion of followers have taken home incredible gains of 210%.
Now, the best part is that despite the humongous gains, Vadilal Industries is still a micro-cap with a market capitalisation of only Rs. 546 crore.
Does it have the wherewithal to give investors more gains even from this stage is the question on every investors’ mind!