Commodity and Cyclical Plays


(Jiten Parmar) #349

Results are very good. Moreover, see the guidance for Q4 and FY19. Am very happy the way the steel cycle has played out. Cheers to all riding this cycle.

One more instance, that if done right, cyclical investing can pay rich dividends.


(phreak) #350

LME Lead which is at 6 year highs seems to have made a fresh 52 wk high and looks to be heading for a breakout.


(yudiagg) #351

Should be positive for Gravita India.


(Mayank Narula) #352

Hi Jiten, thanks for the wonderful thread. Really informative for newbies like me. :slight_smile:

Would like to have your input on Prakash industries and sunflag iron. I entered into Prakash just now at 220. I know this is pretty late in the cycle (compared to other members here), however I am pretty encouraged by company’s commentary and valuations are still not far fetched with mcap/sales ratio of 1.

Also regarding reliance capital, just from an indication point of view, what should be the fair value of stock considering that market is now re-rating ADAG companies.

Thanks,
Mayank


(princepv) #353

Hi Mehnaz, could you please update on the copper chart, The prices seem to have peaked, or is it temporary breather. your update would help


(krrish seth) #354

jitenbhai

As the relcap is high beta scrip, it always react more than the overall mkt.

Now as mkt is coming down rapidly, what should be the strategy going forward


(Jiten Parmar) #355

I have added more in last couple of days.


(khushi) #356

Hindustan Copper and Jindal Power & Steel have corrected a bit and personally feel like those who missed to enter earlier can enter now.

Hindustan Copper has been trading in a narrow range between 88 to 105, but this range is also around 10-12 % swing.

Views of Senior members invited.

Disc : Personally have added small qnty again today.


(raviimandi) #357

which one you added in correction @jitenp?


(Hashims) #358

Can we expect similar performance or better from Godawari Power & Ispat Q3 results to be announced on 22 Jan 2018?


(Hashims) #360

Thanks Prakash:grinning
Q3 Results attachment.
b8d365d7-d064-4ebe-9cf1-ac1d34d12b5cgodawari.pdf (2.9 MB)


(Jiten Parmar) #361

Investing is about looking in front and driving, not at rear view mirror always. An occasional check there is ok, but mostly u must look in the front.

-Jiten Parmar

Very apt for cyclical investing in particular.


(ramanakasireddy) #362

Sir
Hote/Hospitality stocks are touching 52 w highs any view on that sector ???


(Satya Prakash) #363

I want to slowly understand things that work in cyclical nature. But the stocks mentioned are Uflex and Cosmo Films which does not look like a pure cyclical play! Commodity kind of stocks generally goes cyclical way!
Ok, checked few pages of the presentation and it looks like the one I want to know more about. It is about commodity kind of subjects. So, Presentation is worth studying.


(Satya Prakash) #364

Hi,

Why Packaging firm is in cyclical? They serve evergreen FMCG then business is there always. Should be little and normal ups and down? Or it is FMCG that does cyclical and Packaging firm is an indirect play so you have bought!

Thanks & Regards,
Satya


(Mridul) #365

Cosmo like companies are highly dependent on crude cycle. Margins working capital get impacted big time with crude swings. Moreover, this segment is highly effected by supply demand scenario. Margins in all commodity companies fall with supply gut. Currently all packaging companies have undergone huge capex in BOPP segment. if you go through Cosmo mgmt’s commentary, you can feel the pain, as specialty few years back has become commodity now.


(Kumar Saurabh) #366

There could be two way of cyclic effect ,one as highlighted by @Mridul , COGS level cyclic behavior where company is not able to pass the benefit . The second could be demand supply equation of product or service being sold. Usually, in commodity industry where barrier to entry is low and things are going great , everyone expands capacity to meet rising demand which leads to sometimes overcapacity in a stable demand (like fmcg), sometimes overcapacity in falling demand (like infra). Based on extent of mismatches related to COGS,demand , supply and companies/sectors bargaining power, the strength ,weakness n longivity of cyclic industries may differ . This has been my limited understanding .


(Jiten Parmar) #367

Correct. It very much depends on supply/demand. And there is oversupply currently. so, margins are impacted. Impact on Uflex is lower as it also has packaging. And it’s the largest packaging company in India.So margins are much less cyclical.


(Raj A A) #368

You’ll Want to Read This Living Legend’s Thoughts On Copper


(Manohar T. Patil) #369

Nalco shareholding pattern on moneycontrol shows following figures indicating - over 100% increase in mutual fund holding of Nalco in last quarter ending Dec’17 over previous quarter.

Holding of Mutual Funds in quarter ending Sep’17 - 56,189,634
Holding of Mutual Funds in quarter ending Dec’17 - 118,304,918

http://www.moneycontrol.com/mf/user_scheme/mfholddetail_sec.php?sc_did=NAC#NAC