The best part of Prof. Sanjay Bakshi’s role as a teacher is that he is unable to keep anything a secret. Instead, he is eager to share all his learning and knowledge with his students and with anyone else who is willing to listen.
If we listen carefully to the Prof’s talks and also read his various writings, it is possible to decode the technique that he has successfully used to consistently find winning stocks like Kitex Garments, Relaxo, Ashiana, etc etc.
In his latest talk to the students of IIM Ranchi, Prof. Bakshi has given practical examples from stocks like Pidilite, Astral, Ashiana Housing, Relaxo etc to reveal the “secret sauce” that has enabled each of these stocks to give stupendous returns to shareholders.
He summed up his entire advice in pithy words (@1.03.30):
“In the end, it boils down to this .. time is the friend of the wonderful business and enemy of the mediocre .. the simple equation is that if you combine compound interest with longevity and at a reasonable price, you have the secret sauce of making money out of securities … All the stories about brands, low cost advantages, competitive advantage, entry barriers, etc … converge to this simple equation that there is a business that enjoys a high return on capital and that it will continue to enjoy that high return for several years to come … you just have to sit back and let the business compound for a long, long time.”
The Prof repeated the golden words for emphasis: “Reasonable valuation, compound interest and longevity produces wealth.”
In addition to the lecture, the Prof has also revealed a letter that he wrote to an admirer, which also contains important pointers to the Prof’s technique. The Prof has pointed out that he only looks at stocks with a high ROE and nil/ low debt. He also indicates that he is very disciplined about the price that he is willing to pay. If the stock is quoting at a high P/E, the Prof assumes that the P/E will contract to (a maximum of) 20 within a period of (a maximum of) 10 years and then decide whether it is worth his while to buy the stock at the high P/E.
So, now the million dollar question is which are the stocks that satisfy Prof. Sanjay Bakshi’s parameters of high ROE, longevity and reasonable valuations? If you have any ideas, please do share it!
Atul Ltd RoE 25 Debt/Equity 0.32
VST Tillers Roe 29 Debt/Equity 0
Zensar Roe 29 Debt/Equity 0.1
Greenply Roe 22 Debt/Equity 0.8
Swaraj Roe 33 Debt/Equity 0
HMVL Roe 20 Debt/Equity 0.03
Ratnamani Metals RoE 20 Debt/Equity 0.1
Technokraft Ind Roe 16 Debt/Equity 0.16
Ifgl RoE 23 Debt/Equity 0.3
PC Jewellers Roe 23 Debt/Equity 0.6
Alkyl amines Roe 34 Debt/Equity 0.9
Balkrishna Ind Roe 29 Debt/Equity 1.24
@vinmara..what it imply..
Vinamra,
What it implies, do we need to take any action :), please specify.
these are some companies that satisfy dr bakshi criteria
@Vinamra, v gud
jacobvacha@gmail.com
regards
jacob mathew
Trigyn technology 42roe/0debt Gujrat foils17roe/2.3debt
jammu and kashmir bank
1. Can some please help me learn how to calculate in detail and what should i interpret from the result.
2. Also please give some examples for both value stock and non value stock to understand the difference.
3. Also how the data is collected ?
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Shriram City Union…
Asian Granito India Ltd
GIC Housing Finance Ltd.
LIC Housing Finance…
Dewan Housing Finance…
Indiabulls Housing…
Navin Fluorine Intl…
Shilpa Medicare Ltd
P I Industries Ltd
Ajanta Pharma Ltd
Poly Medicure Ltd.
Granules India Ltd.
Kaveri Seed Company…
Aarti Drugs Ltd.
Suven Life Sciences Ltd.
DCB Bank Ltd
Tata Elxsi Limited
Atul Auto Ltd
Astral Poly Technik…
Ashiana Housing Ltd.
Oriental Carbon and…
Mps Ltd
Can Fin Homes Ltd
Lumax Auto Technologies…
Premco Global Ltd
Dynemic Products Ltd.
Freshtrop Fruits Ltd
Kovai Medical Center…
Thomas Cook India Ltd
Vaibhav Global Ltd
Delta Corp Ltd
V-Guard Industries Ltd.
Greenply Industries Ltd.
Mayur Uniquoters Limited
What is going on here ? Every one is coming up with a list of stocks
Guys! Please guide me by suggesting top 5 stocks for 2 yrs perspective….
expand your horizon to 3 years because market still near all time highs..and invest in infosys, axis bank, icici bank, divis lab, and acc/ambuja…you can certainly expect 15-25% returns (all stocks held by me so views may be biased)
Guys what is your opinion on Bodal Chemical(BSE: 524370 | NSE: BODALCHEM)?
Bodalchem
Debt to equity: 4.98
Promoters have pledged >73% shares.
Stay away.