Hitesh portfolio

@Ankur_Lakhia

I dont track interglobe too closely. But I think the whole aviation sector as a whole lacks pricing power unless all of them gang up and start raising prices. So passing on crude price increases to customers remains difficult. However this situation could change as there are very few players and a huge market to address. As of now I dont feel too excited by the sector.

Hello Sir…
Do you have any idea about Nitin Spinners??

Hello Hiteshji,

Can you please let me know your views on Aurobindo Pharma and overall US generic market.

@Kashyap Not much idea about nitin spinners.

@sagarbhadury Not much idea about aurobindo.

1 Like

Dear Hiteshbhai- Any views on HDFC Life.Do you track it

1 Like

Dear Sir,

Are you still tracking Shilpa Medicare?

Hi Hitesh,

Would like to know your views on buying shares while its prices increases.

Amount to be invested : 100,000
Objective: deploy all money while stock rises 33% from my initial purchase price

Stock Price Invested/Purchase
Abc 100 10,000
Abc 110 30,000
Abc 120 50,000
Abc 130 10,000

This makes 100% allocation while stock is increasing

Could you please let me know your thoughts on this

  • Should i deploy cash in 3 steps only
  • Should i deploy cash 10%, 40%, 30%, 10% kind off or 15%, 60%, 15%, or say 33%, 33%, 33%

Just thinking what would be good enough or general strategy

Thanks a lot for your guidence

Regards,
Milind

1 Like

@malthankar

regarding buying on the way up, its a strategy recommended and well explained by Jesse Livermore in his wonderful book. His strategy of first testing with a small lot size and then adding to his bets as the price moves in his favour has been quite well elucidated in his book reminescences of a stock operator.

Personally I have been buying usually in single lots or at most 2-3 lots in similar price range in the company I am interested in. If its something I want to buy with high level of conviction for long term then I dont mind averaging on the up.

I have been doing that in a couple of companies in my portfolio after the story has improved over time and I have continued to develop more conviction.

9 Likes

I was just wondering whether the SEBI revised guidelines for the mutual fund industry is partly responsible for the decline in prices of mid and small caps. The guidelines were responsible for a lot of so-called large cap funds selling of their mid and small caps - in order to abide by the regulations. Am I being naive? My portfolio is rather skewed towards the mid and small caps and these last few months have been character-building!

Hiteshji, I concur with your analysis. I had a decent holding which i averaged out and sold at about 120 last year. The issue is the constant deal flow the group needs to grow. They are still looking at acquisitions instead of focusing on organic growth. When the share price fell below Rs 100 a lot of friends called to say its a screaming buy etc. I did my bit to explain the price was still very expensive and it could come down : the demerger will see a significant price correction as the profit bearing asset is being hived off. The company is in a better financial position (leverage)as compared to same promoter group strides, hence between the two, it possibly has a better longer term outlook.

“The only company in the sector which seems to be holding up till now is Edelweiss which is around 310. But I dont like the structure it is forming too.”

Hitesh bhai, you wrote above lines about 8 days back and, as on clue, Edelweiss has now started correcting. Could you please elaborate what structure you are talking about? Are you seeing formation of head & shoulder pattern on long term chart?

@Ankur_Lakhia Edelweiss chart was showing a formation of a possible wave 5 in elliot wave counts which are notoriously inaccurate. Hence it was only a feel I got that the chart pattern did not look too encouraging. But even among this meltdown it is one of the few stocks which has held firm in a sea of red.

1 Like

Thats a lovely book…!! I read it while learning wyckoff methods and it was a lovely experience

Hi Hitesh Ji,
I have been holding PNB housing Finance since IPO and I have a question regarding PNB Housing & HFC’s in general. In one of the answers you had mentioned that “HFC rally might have run it’s course as per the price pattern”. It was the similar price pattern that you had observed during that end of the Pharma bull run. But, in HFC not all the stocks are correcting, If we see Gruh it’s going from strength to strength and trading at P/B of >20 and even HDFC is also trading at good valuation. If the growth of the HFC is over, can the sector leader command these kind of valuation, Gruh is trading at valuations which no other financial company is trading. But, we have not seen any signs of valuation compression in Gruh/HDFC.

HFC as a sector grown well in last few years. Now with the valuation correcting to decent level in the last 8 months, With real estate growth revival after a long time and with all the benefits that government is providing do you see any major negatives for the sector.

Regarding PNB housing, In Housing Probably they have best management after HDFC and very good business model and ever improving C/I & RoA ratios. Apart from their Parent & PE firm stake sale do you see any major negatives.

I know that the current midcap/smallcap carnage will give good no. of options for any investor. I thought of getting your opinion on this.

Thanks in Advance.

3 Likes

HFC companies have been discussed ad nauseum. Nothing new to add here. Outlook wise it seems growth looks assured but still most companies in the sector barring gruh have lost more than 50% in market cap over the past year. There could be a bounce sooner or later but I dont expect blockbuster returns from this sector. As said earlier once a sector loses its sheen it takes a pretty long time for it to make a comeback.

Meanwhile in the same financial space in the subsector catering to vehicle finance and rural finance some stocks like shriram transport, sundaram finance, magma, bajaj finance (not strictly vehicle finance but it is in a class of its own) are making fresh 52 week/all time highs. These are the stocks worth studying if one wants to pursue financial space.

disc: bought magma fincorp recently due to improved performance in asset quality and the new management team seeming to be doing the right things.

15 Likes

Hi Hitesh,

I was just going through some technical charts say… Head and shoulder or cup handle or higher top higher bottom kind off as suggested in above post.

Just wondering, how do you avoid false indication? (on top of fundamental analysis)

  1. Do you see yearly chart or two year chart and look for pattern that forms in 6 months kind of rather than looking into one month period.
  2. While looking into charts, do you avoid sudden up spike or down spike prices to get correct picture of chart or say only 95 percentile of closing price avoiding 5% which are sudden spike or down
  3. Which charts should i look if want to identify stocks long term trend or say… after how much price increase from the bottom of stock suggests that it is now on uptrend.
  4. when we say 50 DMA or 200 DMA is support level, do you keep like stock may form 5% less then 200 DMA and when it going up from there and crosses 200 DMA again you start thinking about entering into stock
  5. Do you follow strict stop loss for fundamentally good long term stock too…

Thanks a lot

Regards,
Milind

1 Like

@malthankar

I usually look out for charts on longer term time frame. Usually weekly or monthly charts where targets could be achieved in few months to an year or two.

If u want to avoid being swayed by whipsaws its better to look at line charts which give closing prices on any time frame. That takes out whipsaws and gives a clearer picture.

Ideal stocks to look for in long term uptrend are stocks which clearly are in uptrend with lower top lower bottom formation or which have broken out from 52 week or all time high after proper base formation. Most of these would be above 200 day moving average which is an important parameter.

Following stop loss in fundamentally good stocks depends upon the conviction I have in that company If I understand the company quite well and am confident about that company I dont bother with stop losses. In all other situations I usually sell when I see the pattern doesnt seem to be working after giving it enough time or if it starts going down a lot after my buying.

10 Likes

Hi Hitesh,

What is your view on PI Industries? Management has been saying they see global demand is opening up again for a while now. After every quarterly result (which tends to be a bit of disappointment), analyst reports from well known houses come out indicating it is a steady compounder going forward and any selling in the market seems to be fairly quickly absorbed. Valuation it isn’t exactly cheap at 30 PE, but if the business cycle turns positive for next 3-4 years could see operating leverage kicking in.

Thanks in advance.

@newrb I havent tracked PI Inds for a while now. But according to information provided by agrochem companies in their concalls, the global inventory for agrochem seems to be coming down and most of the company managements seem to be bullish in the next few quarters.

3 Likes

Hi Hitesh, Thank you for taking the time to answer queries. I wanted to pick your brains on purely the technical aspects of Avanti.

I was going through the weekly charts and noticed that It has fallen from highs of 3000 on low (ish) volume but the pull back from 1250 levels have been on HUGE volumes (highest in the last 3 years). What do you make of it?

Also, if possible, would love to see your EW chart count of Avanti. Thanks!
Regards,
Niranjan

2 Likes