If you are lucky enough to find a stock backed by Rahul Saraogi of Atyant Capital and Ashish Kacholia, you must dive in first, grab the stock with both hands and ask questions later.
Why? Because such a stock will reflect the perfect balance between “deep value” and “high growth”.
Rahul Saraogi is a self-professed “deep value” investor. He has made it public that he doesn’t touch a stock if it is not quoting at a steep discount to its “intrinsic” value. For Saraogi to be interested in a stock, it must be so cheap that there is a potential for ‘asymmetry‘ gains i.e. hefty and disproportionate gains. Saraogi also puts a stock through a rigorous screening process. Apart from all the traditional aspects, he even looks at things that a lot of us take for granted, such as corporate governance.
Ashish Kacholia, on the other hand, is not so fussed about the niceties. He places emphasis on the ‘growth’ aspects of the stock. He loves powerhouse companies that are already cruising effortlessly on the super-highway of growth. Kacholia is also not particularly concerned about the present valuations so long as he is satisfied that the potential for hefty gains in the foreseeable future exists.
So, when both stalwarts put a buy on a stock, you can rest assured that not only is the company offering “deep value” but it is also poised for explosive growth.
Navin Flourine is a textbook example of such a stock.
In my piece of 15th January 2015, I diligently reported that Atyant Capital holds 315,988 shares in Navin Fluorine and that Ashish Kacholia holds 1,12,407 shares. On that date, the stock was at Rs. 650. (As of 30.06.2015, Atyant Capital holds 298,088 shares and Ashish Kacholia holds 242,218 shares.)
By March 2015, the stock had moved to Rs. 831 and I sent another alert.
You will be astonished to learn that today, about six months since my first alert, Navin Flourine is at Rs.1298, giving impressive gains of nearly 100%.
We shouldn’t be missing out on such mind-boggling gains which are being handed over on a platter.
Navin Flourine reported bumper results. In Q1FY16, the net profit more than doubled at Rs 18.15 crore as compared to the profit of Rs 8.50 crore on a YOY basis. The net sales increased by 15% to Rs 150 crore as against Rs 130 crore on a YOY basis. The EBITDA margin also improved to 17% against 9.42% in the same quarter last year.
|Navin Flourine Quarterly Results|
|Particulars (Rs cr)||Jun 2015||Jun 2014||%Chg|
So, the basic premise on which the stalwarts invested in the stock, namely that the company would show good results, has come true. The fact that the stalwarts continue to remain invested in Navin Flourine suggests that the company is on the right path and that the valuations are still reasonable.