Hitesh portfolio


(Hitesh Patel) #2957

@RAYMOND, I dont track Bhel and so no idea about its prospects.

@newone, Not much idea about HDFC AMC IPO as well.

@Rits, I have enlisted multibase, tci, etc in another thread as companies to watch out. But the way there is divergence in the markets in terms of selling in small-midcaps and strength in select large caps, one needs to be patient in buying or atleast have a staggered approach to buying. I hadnt expected this kind of divergence in market movement, and hence feel it might make sense to be patient in buying as well.

Markets have hit new highs but market breadth has been pathetic. So either fancied large caps could correct and take the whole market down in an ugly downmove or small-midcaps can stage a comeback and have a semblance of a rally. Difficult call to make out so currently I am in a watchful mode and see how things unfold.


(Devaki Nandan Tripathy) #2958

In case of small caps, we need to believe we are in bear market and invest accordingly without rushing in unless and until proven otherwise by the market.


(Investor2025) #2959

Sir

Please share ur views on repro india… …
You have started the thread of repro india so u might have indepth analysis on that…


(Ramesh Patel) #2960

Hitesh bhai, would like to know your view about 02 textile stocks viz. Garware Wall Ropes and Himatsingka Seide. The past performance of former one promises good future ahead and later one has corrected a lot and apart from reasonably good performance has got good capex lined up. Pl. share your views if tracking.

Your response to a query regarding support zones was quite interesting and I would like to request you to suggest a good book on technical analysis for newbies for TA like me !!

Thanks & Regards.


(Hitesh Patel) #2961

I dont track any of the textile stocks you mention.

For technical analysis you can read Technical analysis of stock trends by edward and macgee.


(KKP_Investor) #2962

Hiteshbhai, can you share some stock ideas that you have added recently or are close to your purchase price since I am assuming that these would be great fundamental picks as well as solid technically also. I am building a model portfolio and none of your recommendations would be construed as a Buy Signal, but just for adding to the model portfolio, for the obvious reasons (not mentioning here).

Thanks.

KKP


(UTPAL2002) #2963

Hiteshbhai,

can you please share some idea on differentiating Good company from Great company with some names and parameters to differentiate? if u have shared your views help me with link to that post
Utpal


(Hitesh Patel) #2964

@UTPAL2002

Great companies are companies which have proven themselves over the past many years. This is mainly due to their ability to negotiate different variables they encounter in their businesses. The business is inherently so strong that it can weather temporary storms. This in numbers is often depicted by consistent topline and bottomline growths, high rates of return, low or no incremental capital to grow (asset light business model) great managements and excellent balance sheets. In some cases the business model is often self reinforcing and the business seems to be keep chugging along on auto mode. The companies in this list usually include companies with strong brands or network effects and are usually sector leaders. They dont have to depend upon fortunes of other companies or sectors to grow.

Good companies are companies which dont possess all of the above characteristics. They often fall short in one or the other parameters. These companies often show good growth during favourable environments and tend to struggle when they face strong challenges. A lot of processor companies fall in this category. One cannot visualise a very long runway associated with great companies in these good companies.

This is how I classify some companies I encounter as it makes buy/sell decisions a little bit easy. Some companies even though fundamentals are good dont fall into either of the two categories and will have to be viewed differently.


(Hitesh Patel) #2965

@kkpatel1924, I have already discussed some of the companies I find attractive in this and other thread on midcap carnage. I still cant find companies which are screaming buys.


(Sagar Bhadury) #2966

@hitesh2710 Hiteshji, How do you look at TBZ now. Seems like people have lost confidence in the jewelry stocks after Nirav Modi scam…


(Sandokan) #2967

@sagarbhadury

With my extremely limited knowledge, and having a very cursory look at the figures, I must say that TBZ does not present a picture which would give me a reason to invest in it. There is a lot of inconsistency in their results, and if we exclude the PAT for three years, viz 2012, 2013 & 2014, there is nothing to attract me to this stock. The revenues have been stagnant, which to me , indicates that there has been no expansion of business for the past 7 years. Without looking at the volumes, I would hazard a guess that this stock is now out of favour and unless something drastic happens to jolt this business out of its current stupor, it will be either rangebound or continue to fall.

The above is my own opinion and is based on what little I could learn from this forum as per my ability. I would love to be corrected or guided. I am still learning and hope to present a better argued scenario someday on a couple of stocks I am looking at.

Thanks and Regards


(KKP_Investor) #2968

Thank you Hiteshbhai. Appreciate it.

KKP


(sincyvarghese) #2969

I know this question was not addressed to me but I thought I will give my two cents. When TBZ came out with its IPO I was holding Titan. I think jewellery was the flavour of that season. I knew TBZ is a 100+ year old group and I wondered why they needed the IPO money. Expansion in itself was not a good explanation to me. They had ample time during the license permit raj to expand without much competition. To me it looked like they wanted to ride the jewellery wave (share prices) of the times. Despite that I saw the stock booming and took a small position which I liquidated either at a small loss or at a small profit. The reason for selling was different but I thank God I sold out.

My thinking goes like this while making investments. Where is the incremental value coming from? In the jewellery industry there is no money to be made from selling gold (or silver or any other commodity). They could squeeze out some profits on gold itself if they have an international supply chain system, say like Walmart. Otherwise they are susceptible to the vagaries of the commodity markets.

So the place to add value is through great designs, extremely efficient manufacturing and innovative technology. Titan is in that category because it is a fairly new company and they have these things in their DNA. TBZ I never thought had that in their DNA. I believe in Indian context jewellery companies should remain private like Kalyan. They may have good cash flow but their revenues and profits swing to extremes. Even if the financials are somehow steady these companies will never give steady double digit growth. One major reason is making charges are generally a percentage of the commodity price unlike say HUL where the profits go up when commodity prices go down. So never looked at any jewellery companies for investment since.


(Hari Gopal) #2970

@hitesh2710 : Insightful post on great and good cos for laymen like me.

Do you or any esteemed members here have any insight on the business of IT telecom hardware company by name Tejas Networks (TEJASNET) . They seem to have started out in 2000 and have weathered & survived two downturns already – tech downturn in 2001- 2003 and the 2008 meltdown followed by telecom scam years. Looks like they have recovered and are showing decent profits in last 2-3 years; but revenues seem cyclical. The management seems to good and transparent at first glance to my amateur eyes. Any opinions? TIA.

Hari


(Investor_No_1) #2971

Hiteshji, can u pls let me know what you mean by processor companies, thanks


(Investor2025) #2972

Any reason for avoiding my question 3 times?
Taking lightly but surprised little bit!!


(Hitesh Patel) #2973

I dont answer stock specific queries of stocks I dont follow. If I dont answer you can assume I dont have much idea or am no longer following the company


(Hitesh Patel) #2974

Examples of processor companies are mayur uniquoters, ccl products, apl apollo tubes etc.

These companies convert raw material into finished product for their clients. Usually on a cost plus basis.


(Sagar Bhadury) #2975

I think , you need to see the approach management has taken through the franchise route , I expect the return ratios to improve going further. Also Unorganized to organized play after GST is inevitable , its just matter of time.

When it comes to margins , yes gold ornaments have less margin than their diamond counterparts . So product mix will be the key to maintain good margins.


(Sandokan) #2976

Yes, that is a valid point. I will certainly have a relook. I do hope that the prospects through the franchise route are strong enough to support higher growth margins than seen till now.

Thanks and Regards