Kumar Portfolio


(axiskumar) #1

Suggestions are invited for my portpolio

1–Goodricke—365—10%-----Tea prices will increase–Good Operating Mrgins
2–Cosmo Films—374–3%-----Volume increase and capex ended…Industry Tailwind
3–Pokarna---------261–13%------Expert in Brent technology and Good mgmt.
4–PFS--------------43—10%------Bet on Thermal and Wind—But i lost confidence…Planning to sell to book the loss
5–MCX----------730—5%-----------New market entrants on various commidties
6----Prakash----211–5%---------Betting on Steel prices and demerging
7------RHFL—78—2%-------Betted on Housing finance oppty…But feeling like entered in wrong HFC.


(axiskumar) #2

86 people visted…no reply even from one person


(Rahul) #3

you can exit RHFL and enter GICHFL.


(shreys) #4

In my opinion, you should reconsider your stock picks. I personally would refrain from investing in commodity stocks like Goodricke and Prakash Industries. The underlying commodity may be in an upswing but it’s crucial to exit at the right time. I don’t possess the ability to do that. Hence, I try to minimise my exposure to commodities.
Also, you might want to reconsider your increased exposure to Pokarna. Their recent performance financially hasn’t been very comforting. If you feel confident with your picks do continue.
And, regarding Cosmo Films, don’t stay invested just because it’s available at a throwaway earnings multiple. I’m not aware of the commoditization of Cosmo Films’ products. But, most commodity stocks are available at low multiples at their peak earnings potential. It’s only downhill from there.


(axiskumar) #5

Thank you Shreys…But I stuck in all stcoks with 30 % loss…Huge loss


(Anil.Bajpai8819) #6

You need to provide detailed rationale on why you bought each of these stocks. Else members will find it difficult to understand why you bought. So cant give suggestions.


(axiskumar) #7

Hi Anil,

For each stock i mentioned liner why I bought these…truly based on those lines…i purchased these…


(Kumar Saurabh) #8

What I see is most of your companies are in cyclic businesses and have lesser pricing power. Such companies must be purchased with high caution and higher margin of safety. Ask yourself if these companies 1. Had pricing power based on last 10 years of data 2. Have any barrier to entry , uniqueness 3. Are you betting on their cycles with some strong logical judgement because for sure they are not linear performing business segments 4. How you have done their valuation and ensured your margin of safety for inherent higher risk is intact
Friend, I would humbly request you to reevaluate overall investment philosophy. Not against the companies, money can be made in various ways and one should be master of his game . Usually what I have seen is to make money in such companies, it needs at least one bull n bear cycle of business with detailed tracking n study. My views are reflection of my own experience and perspectives differ but this is what I could suggest.


(axiskumar) #9

Thank you Saurabh…Infact valuable input…how can I do valuation before purchasing…

Please advise.


(shreys) #10

Dear @axiskumar,
I understand how difficult it must be to book losses. There is significant erosion in your capital. But, if you don’t take corrective steps now the results will be disastrous. Most of your investments are in cyclicals, commodities. They are difficult to tame. In my opinion, you should restrict your investments to decent large caps. In my opinion, most small caps, microcaps and nano caps are available at painfully expensive valuations. Until you equip yourself with the relevant skills to assess the fair value of an investment opportunity restrict your investments to renowned companies or consider mutual funds.
Just my thoughts. Consider and do what you deem is best.


(axiskumar) #11

Thank you Planning to exit PFS with huge Loss almost 50 %

But thinking to book the loss…( Hard earned money after paying 100 % taxes on salary)…little diffcult…but planning to book the loss.

Thanks,


(shreys) #12

If you please wait for advice from some other boarders. Maybe they have better advice for you.
Finally, it’s your decision.


(Saji John) #13

It is indeed difficult to book losses. I went through similar feeling in my earlier phase of investing. What gave me some comfort while booking losses was the possibility of tax benefit. Now is the year-end, you may be able to reduce your taxable short-term/long-term gain. Another thing that is going in favor to you is that the market valuations are better now than two months back. I suppose the 2017/18 accounts closed on 28th March. So this may not work for you this year.


(Susindar) #14

Have you invested only 48% of your portfolio at this moment and sitting in 52% cash? If yes, you are in a good position to use the current opportunity the market is presenting.

I see you have not gone beyond 13% in a single stock so there is no concentration risk at the moment. Like other boarders mentioned, it is good to stay away from cyclicals unless you are an expert in timing your entry as it requires a contrarian approach. I generally stay away from cyclicals.

I find RHFL to be a good pick especially at the current market price. If pokarna can deliver on branding it’s products, it could be a good pick as well.

I would stay away from PFS as it has huge NPAs and no end in sight for its problems. I do not follow other stocks in your portfolio. It is important to sit tight as well once you buy right. So try to build your conviction with further research and if you cannot, get out of such stocks.


(1.5cr) #15

Goodricke are an interesting story. They have a solid branded tea business and have recently aquired brands from philips godfrey. This would increase share of branded tea business which is an fmcg product. Tea prices are due to increase. But the branded tea story is interesting…


(Utsab) #16

Steel sector might be down this year. Also with the introduction of tariffs in US the steel price might be subdued.


(Bhavesh) #17

I am negative on PFS and RHFL. PFS has too many bad loans to deal with. Management not focussed on growing shareholders funds (no incentives) as it is a quasi-PSU.
RHFL- Even i held it and sold off very fast as i found the company has no structural advantage in this business of Home financing. Although it can continue to grow very fast, NPA problems will be visble gradually given relatively fresh books I feel. Also, there are many better plays to play housing boom. But at Rs60, I can only see upsides, although would not hold it beoynd 100.


(Sameer Wakude) #18

Hi,
Most of the companies in your portfolio look to be of cyclical nature. I would suggest you take a top down approach in forming the portfolio. For this write down the objectives of the portfolio (or filters if you may call them):
e.g.
Objectives of my portfolio:

  1. Diversified Portfolio of 15-20 stocks
  2. EPS growth > 25%
  3. Non-PSU companies
  4. Competative management
  5. Non cylical
  6. Dividend Yield > 0%
  7. Cheaper Valuations (e.g. PEG < 1)
  8. Industry with Tailwinds
  9. Leaders in the space (Top 3 in that industry)
  10. No individual stock above 10%
  11. No Industry above 40%
  12. Non-Regulated Industry
    This would give you a lot of clarity on the picks.
    Once you filter on the pics, you may end up with like 50 scripts.
    Once you have that, you research on each of the company, Read their Annual reports, Investor presentations, Broker reports, Check ratios on sites (Marketsmojo, Marketsmith, Valueresearch, screener).
    Write your thesis in few lines, write negative and positive of each of the company. Invest in steps.

All the best !!! :slight_smile: