Excellent stock picks but conservative targets
Karvy’s hallmark is that they are very conservative with their stock selection and the price targets.
They do not settle for anything less that the highest quality stocks quoting at the cheapest possible valuations.
However, the downside is that the price targets predicted for the stock are very conservative and unrealistic.
Hester Biosciences is a text book example of this.
Karvy recommended a buy of Hester Biosciences when the stock was at Rs. 1,162 and forecast a target price of Rs. 1,417 for it.
Even I, despite my rudimentary knowledge about stocks, knew that the target price was laughable. After all, the stock had recently been complimented for its operational prowess by none other than Billionaire Bill Gates.
Such stocks can never be leashed to petty price targets but must be left free to soar the skies.
We can see that Hester Biosciences is already ruling at Rs. 1,805 and is looking very strong indeed.
According to knowledgeable sources, Lasa Supregenerics, Hester’s arch rival in the animal vaccines field, is also a good stock to buy.
We will have to keep a close eye on Lasa Supregenerics and tuck into it at the opportune moment.
Model portfolio of the best 10 mid-cap stocks to buy for 2018
Now, let us turn to the important task of seeing what multibagger stocks Karvy has recommended for us to buy in 2018.
|TATASPONGE||Metal & Mining||939||1140||21|
|*As on Dec 22, 2017, Time frame 9 – 12 Months|
Natco Pharma – large cash flows and profits will gush in from new products
We can get an idea of Natco Pharma’s multibagger potential from the fact that even during the present time when the entire Pharma sector is in the doldrums, the stock is up a magnificent 68% on a YoY basis.
Natco boasts of having Billionaire Dilip Sanghavi, the visionary founder of Sun Pharma, as a major shareholder.
According to Karvy, Natco Pharma is an ideal buy because two of its new products, namely, gCopaxone and gTamiflu, are likely to generate large cash flows owing to the patents having expired.
Two other products named gFosrenol and gDoxil are also likely to generate substantial profits.
Visaka Industries – Dolly Khanna’s fav infra stock
When I reported in July 2017 that Dolly Khanna and Anil Kumar Goel have cornered large chunks of Visaka Industries, the stock was ruling at Rs. 508.
Presently, the stock is commanding a valuation of Rs. 756.
In fact, such is the demand for Visaka Industries from investors that the BSE mandarins got alarmed and demanded an explanation as to the reasons for the steep price surge.
Karvy has provided a masterful explanation as to why we have to buy Visaka Industries and join the distinguished company of Dolly Khanna and Anil Kumar Goel.
It is worth recalling that Vijay Kedia and Porinju Veliyath have recommended a buy of Everest Industries, Visaka Industries’ arch rival.
In fact, Vijay Kedia has recommended Everest Industries as his best pick for 2018.
Everest Industries has also surged like a rocket since Porinju first recommended it and posted YoY gains of 189%.
Hyderabad Industries alias HIL is yet another stock which is a worthy contender for our money in the roofing/ housing space.
HIL has recently announced a new roofing product which is “asbestos free”.
HIL commences the production of it's new product – non asbestos based roofing solution. This is a good trigger. Next will be commencement of pipes production. Company also keen on acquisitions. If that happens, stock will re-rate. https://t.co/k9KSwfU1sI
— Ashish Khokha (@ashishkhokha) December 22, 2017
Ramco Industries, which was also recommended by Porinju Veliyath, is also a fail-safe candidate from the same sector.
Tata Sponge – blue chip credentials
Daljeet Kohli first recommended Tata Sponge on the logic that its “strong balance sheet, debt‐free status, and increasing protectionism from government on imported steel” makes it the ideal portfolio stock.
He was right because the stock has surged from Rs. 590 to Rs. 1,015.
However, given that the entire steel sector is surging, Tata Sponge is the ideal stock to back owing to its blue chip credentials, according to Karvy.
Mubina Kapasi, the charming journalist with ETNow, has provided a cogent explanation as to why steel stocks are surging and how long they will continue to do so.
Watch @MubinaKapasi tell you what's the buzz in the #steel sector as the commodity charts a #rebound story! pic.twitter.com/Dw738IAOwb
— ET NOW (@ETNOWlive) January 5, 2018
KRBL – Robust demand for branded basmati rice
KRBL has the privilege of being recommended by Ambit Capital as part of their “hidden gems” recommendations.
However, we have put our money on LT Foods alias Daawat, KRBL’s smaller rival.
This is because LT Foods/ Daawat is the favourite of Dolly Khanna and Porinju Veliyath.
We saw a few days ago how several large mutual funds and FIIs stormed into the stock.
This is the clearest possible indicator that LT Foods/ Daawat is walking on the multibagger path.
The other mid-cap stocks recommended by Karvy are also of high-quality and quoting at reasonable valuations. We can buy them with confidence and expected to be rewarded handsomely in due course of time!
I had already suggested Lincoln Pharma as a great value buy on Aug 20 2017 and once again on Sep 05 2017 at Rs.155 levels. Now its at Rs.237 on 9th Jan 2018. Delivered 53 percent return in 5 months. Still lots of upside remaining as revenues are going to increase this year due to new medicines launched in Africa and awaiting USFDA approval and RBI license for starting NBFC also. See my previous post on Lincoln Pharma below in Comments section http://rakesh-jhunjhunwala.in/100-bagger-pharma-stock-is-on-cusp-of-new-growth-story-experts/