Background Note:- As a brokerage client of Sharekhan, I received an invite to this free
webinar, meant for HNIs(OK I’m not one yet but am getting there!). Unlike a
sales pitch type webinar, this was actually quite informative. Unfortunately,
the Q&A session was disconnected in between but seeing the type of
questions posted online, it does not seem a great loss. Anyways, without much
ado, I present below my notes from that session. All views expressed are NOT
mine.
Suhas started off with saying that he had invested in
midcaps between 2001 and 2004 where not much movement in the stocks but now
they are multi baggers. He said that investors should not come to the markets
with the aim to earn just 12%-13%, but to MULTIPLY your assets which is possible only
with patience. This was a theme he often repeated.
He then
gave a list of stocks he was bullish on.
·
Aban Offshore, Camlin Fine
Chemicals.
·
SELAN EXPLORATION-because they are expanding
production amid higher oil prices
·
Bajaj Finance-30% CAGR qoq and NBFC license chance
·
Bajaj Finserv-holding company of Bajaj finance
story+ Bajaj Allianz valuation.
·
BEML among best capital stocks, railway/defence
budget story-also substantially corrected from 2009 peak
·
SPIC-really valuable as management invested HUGE
money near CMP of Rs 22 Asahi-debt reduce from 2800 crores to now 500/600
crores
·
IL&FS transport maintained margins despite the hard
envt, and were now among the Big 4/5 in the industry for bidding in projects.
Due to overcompetition, the ROE had fallen to 13% (less than capital cost) but
in recent projects it has returned to normal.
·
Asahi-smallcap chemicals-supplies to paint
industries throught world-stake by Clariant and Dow-so small free float and
great prospects
·
Godrej Properties-very CLEAN property stock and good
corporate governance unlike rest of sector. So if you want to participate in
the boom-they have their own boom, and management does not want to grow too
fast-transparency is not an issue as such
His advice
on investing is
·
Growth
Story intact? No management scam? Then consider investing
·
Even
in this crash, the story does not end-one can exit laggard and enter stocks
·
What
he likes
o
Scalable business model
o
Good management who is approachable? In large cap, only conf
call/analyst meet is possible while small Cos meet you one on one.
o
Macro Theme issues(size of oppurtunity) like
Asahi-where product lines being closed in EU, so now more orders will go to
them.
o
Invest
in what you understand.
o
Policy boost expectation-for example SPIC. Over participated
is Tata Chemicals etc. SPIC type of stock at Rs 20 better chance of going To Rs
80/100
o
Companies
with large competitive advantage-IL&FS
is 2nd largest after IRB and compared to L&T Infra etc. Last 2
yrs road construction boom so ROE had fallen to 13% matching interest cost! But
recent tenders has seen eroded competition.
On risk mitigation, his advice was
o
Stay
invested even with disappointments
o
Average
down
o
Spread
investments
§ Sectors
§ Themes
§ Multi baggers
o
Long
time holding
o
Volatility
is OK.
·
What to expect in terms of return?
o
Unlocking
of value may take time-you may not always enter at the right time.
o
Sharekhan thinks that Lower trading volumes may lead to drop in share price, but
that does not reflect on fundamentals
o
Not
all companies will increase at same time
o
3-4yrs
horizon advised
o
Be
patient-if done homework-grow with the promoter who has invested 80% of his net
worth into the company
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