Commodity and Cyclical Plays


(Jiten Parmar) #1

Hi friends,

Here's a small presentation on my experiences in commodity and cyclical plays. Plz feel free to discuss.

-Jiten Parmarcomm.pdf (145.5 KB)


(Nangalia5) #2

Sir can you explain with an example any previous position you have taken or done with this kind of method.


(Jiten Parmar) #3

It's there on last page. With examples.

For eg. Paper - I have exited majority positions. Star Paper - 6x, Kuantum - 6x, Cosboard - 2x, BILT - No gain. West Coast 2.5x

Also Sugar, where I exited 50% of my positions with varying returns of 5x in Ugar, 7 x in Dwarikesh, Rajshree - 3x.

-Jiten Parmar


(reliableraj) #4

Sugar and Paper stock near last stop, as I feel as well. So which of other cyclicals are worth considering now, as per you?


(hazariwalapu) #5

Dear Jiten,

Good presentation. As what i have seen that when their margins are at 5-6 yrs low will be the best time to enter as no body is looking at these stocks and cycle will be at the lower end as so many distress players will be moving out, so picking up any company that can survive well for next 2 yrs can be the best bat.

Please give your comment as i have not played any cyclical stock so far but looking at it for future position. please correct me if i am wrong.

Thanks

Prashant


(Sarabjeet Singh) #6

Several websites which provide the price info on commodities ask for subscription .... can we list down a few reliable websites which we can rely on to track the commodity price.

Also based on your experience can we get some idea around past commodity cycles length ... for e.g. Sugar 4--5 years .... etc


(Jiten Parmar) #7

My recent basket (last 6 months) has been in Fert and Agri.

Also, would like to add to cement basket at opportune time.

-Jiten Parmar


(Jiten Parmar) #8

It can vary. Past is just an indication. We can't be fixated to past cycle length. Indications on ground, etc more important.


(chirag jain) #9

Nice presentation.

How do you look the cement sector per se especially in the south India.

As Telengana and Andhrapradesh are showing good signs in despatches.

Would like to know how do you study commodity cycles.


(Jiten Parmar) #10

As far as cement is concerned, I believe we should look at limestone reserves also. If a company has it, it's always better. AP/Telangana cement companies, I like. Deccan Cem, NCL, I hold.

I am betting on big infra push by government and also big action in low income housing. Also, consolidation is one theme which may play out. So, look at companies which have low or manageable debt and low EV/tonne valuations.

-Jiten Parmar


(Hadeeh) #11

Informative presentation. Thanks a lot. I am new to the stock market, still learning.

I was planning to invest in some poly film firms, e.g. Cosmos which I have been tracking for a while. Is the poly cycle ending or ended. Is it wise to invest in it. Appreciate your feedback.

Best


(Jiten Parmar) #12

We are in mid of cycle, I believe. Peak can take some time, but as capacity utilization starts improving, so will the fortunes of the industry.

Disc : Hold Cosmo as largest position, all FOC.


(Jiten Parmar) #13

The agri/fertilizer basket has performed quiet well. Off late, added some integrated steel players to the metals/mining basket.


(parthibansubramanian) #14

Because of demonetization I believe the packaging business will improve.. on top of it, people are aligning towards branded names in fmcg.. so I believe this will collectively help the packaging companies to improve their capacity utilization and therefore the margin..

Cement and construction companies that take orders from government will have a huge growth potential until the next election... the central government is changing gears, which I believe is a huge positive.

The railways which is being discussed now and then, will somehow come into mainstream in the near future,, so I believe this sector is also worth watching... but I think his is a long term story..


(Tekumani) #15

One can use the CANSLIM principle, 52 weeks high ... I noticed

Sugar stocks in last November 2015.. every day hitting new high , i bought, i got 20x returns..

now daily rubber stocks are hitting all time high, macros also important ... CANSLIM makes you rich.


(Jiten Parmar) #16

There are multiple ways to make money. Be comfortable with the one that works for you. I like to buy at beaten down valuations and when out of favor and in the deep end of the cycle. Has worked for me very well.


(Jiten Parmar) #17

Cosmo Films and Uflex, I hold.


(ramanakasireddy) #18

very good analysis of cyclicals jitenp
very helpful like novice investore like me
is there any approximation cycle period for each cylical industry
for example sugars 7-8 years downtrend and years of super uptrend


(amit agrawal) #19

I believe two things are very important for cyclicals

  • Underlying cause of uptrend
  • capacity buildup.

For this sugar cycle, both are supportive so far


(Jiten Parmar) #20

It is never fixed. Rather than time, one must look at factors, which are explained in the ppt. For example, sugar downcycle can vary from 4 to 8 years.