Manappuram Finance


(phreak) #441

Big breakout on the daily charts. If it manages to remain at these levels tomorrow, it will confirm a breakout on the weekly as well.


#442

If you are not running a PMS or MF scheme, you are answerable to yourself. Too much of good thing is actually good at times. At one time I had only two stocks Page and Hawkins. Page was 60% and it went up 6x and in hindsight I was a fool to exit completely at 14k. I had a process to determine sale and Page was a perfect fit at that time. My basic model showed me <20% CAGR for 3 yrs but the market is supreme. My learning is if something is doing well, let’s don’t disturb. I will never give 60% allocation to manappuram due to its multiple risks to its biz model. I will tolerate upto 40% only in the condition that earnings are catching up adequately.

Disc: 17% allocation


(Chirag) #443

Irrespective of how good the company is or how well it is expected to do; 37% in one company is not a good position to hold.


(KalyanKool) #444

I believe a concrete statement that 37% is not a good position to hold irrespective how good a company is not appropriate. It’s quite subjective. Buffet once said:

"Charlie and I operated mostly with five positions. If I were running 50, 100, 200 million, I would have 80 per cent in five positions, with 25 per cent for the largest. In 1964, I found a position I was willing to go heavier into, up to 40 per cent. I told investors they could pull their money out. None did. The position was American Express after the Salad Oil Scandal. In 1951, I put the bulk of my net worth into GEICO. Later in 1998, LTCM was in trouble. With the spread between the on-the-run versus off-the-run 30-year treasury bonds, I would have been willing to put 75 per cent of my portfolio into it. There were various times I would have gone up to 75 per cent, even in the past few years. If it’s your game and you really know your business, you can load up.”


(Chirag) #445

I do agree it is subjective. If one is at peace and is able to sleep well while holding such a position the it is absolutely okay.

Fact that @maheshkumar made a post here despite of sitting on a good profit means that he is not very comfortable with the position (I could be wrong, if he can clarify, and will stand corrected).

If I have 37% money in one company, I will have to make sure that out of all my time spent on stock research I have spent 37% time on that company to keep a strong conviction.

As for WB quote, most people are not WB. What worked for him may not work for us.

(In 2014, I had a concentrated portfolio of 3 stocks and while I made a lot of money, I was definitely restless during that time.)


(KalyanKool) #446

Yes of course, all are not WB and may be no one can. And that is the reason I say it’s quite subjective and a concrete statement isn’t appropriate(not saying it’s incorrect). It’s just an example that I have quoted there in support of my statement, I’m not being specific here. May be that’s a view point derived from your personal experience, and it need not be same for everyone in the same way as you said what worked for WB might not work for everyone.


(maheshkumar) #447

Thanks a lot to all my friends for ur valuable opinion

I am jittery because I don’t know the fair value of manappuram
WB is genius and he knew in and out about the company but I have very limited knowledge and that too I am not sure that knowledge is correct or not
Initially my rationale was price to earning of 10 in demonetisation setting where they had major hit
Now there is price jump but on other side promoter bought recently it means they are optimistic about the coming quarters and finding it cheap, that’s why they bought
Now my views are getting biased because of position size
In September I had 99% in manappuram and then I got scared and I diversified it to 9-10 stocks
Now 37% is less than 99% still I am unsettled and anxious


(Vikrant Yadav) #448

I personally don’t let price gyrations affect the sell decision. I would sell when -

  1. Fundamentals of the business have deteriorated.
  2. Thesis which led to buy decision is not valid anymore.
  3. There is an alternate investment opportunity with ‘much - much’ better potential return than the existing position (especially when investor has limited investable surplus)

Disclosure: Manappuram is 45% of my stock portfolio. No intention to sell.


(kashif kidwai) #449

I agree with @Vikrantydv and @KalyanKool on this. A stock shouldnt be sold just because the price has gone up.

Specifically for this case, in my opinion this is just the beginning. Manappuram is an excellent business franchise which has been plagued by temporary problems such as demonetisation and GST. There are multiple triggers in place for this business - a depressed valuation is just one of them. The growth prospects of gold loan business are bright as well. Even if the price of gold remains stable at these levels, organized players can take market share away from unorganized sector which still accounts for majority of the market. And if the price of gold starts going up, Manappuram will benefit disproportionately.

Although you have to build your own conviction, but if I was you I would not sell.

Disc: Invested and adding more.


(manivannan.g) #450

The recent breakout was on a speculation. So hold tight, there’s no reason to sell (as per me).

mangement response:
http://www.bseindia.com/xml-data/corpfiling/AttachLive/88060c38-e312-4c71-846e-3351e754e221.pdf

Disc: Invested


(amitjain2711) #451

I think the management has quickly clarified as the promoter has been buying from the market and maybe even looking to add more.


(maheshkumar) #452

Manappuram -cheapest NBFC stock
Nilkamal–cheapest in the plastics sector
Quick heal–Make in India’ and ‘Digitisation/ Internet Boom’.
Rk forgings–Best Play on CV Uptick
Jsw-Betting on Power Sector Revival


(maheshkumar) #453

On asking why promotes are buying aggressively from open market

CEO and MD Mr nandkumar explained:

They are confident about the future prospects of the company and they are niche player in gold finance

In q3 they are reporting growth in AUM

Next 2 quarters will be better

Gold Npa is now nil

Microfinance turning around

Vehicle finance and housing no problem

So all 4 sectors turning positive

This month I was thinking about selling some part as it was
more than 35% of my portfolio

Now I think I should hold manappuram for at least next 2 quarters and then trim the position When it touches 50% of my portfolio in next 2 quarters


(Mridul) #454

Manappuram Finance’s long term weekly chart (10 year)


#455

Sorry, what does this chart mean? a 10 Yr breakout? what are the implications if yes?


(prash.peru) #456

It’s basically a breakout of the stock’s price from a flat trading range (this makes better sense from a one-year perspective, during which period the stock has been trading roughly between 90 and 110). The breakout is probably a sign that the market is ready to bid up the stock higher (towards its fair value).


(Lakshmi Narayana) #457

KPMG report predicts that value of organised gold loan market in India will grow to Rs 310100 crore by 2020 at a three year compounded annual growth rate (CAGR) of 13.7 per cent.


(KalyanKool) #458

Shareholding pattern is out a while back and DSP Black Rock Micro Cap fund has increased stake from 1.38 to 2.22. Dolly Khanna’s stake remains unchanged.


#459

AIM/Hedge funds have increased stake, Quinag increased and no. of shareholders declined by 3k. All point to further positive consolidation.


(Janarthanan Natarajan) #460

Board meeting on 23rd to discuss investment proposals. Al though the disclosure doesn’t explicitly clarify on the term ‘investment proposals’. I am assuming it is related to someone buying a stake or taking over the company. Also the board meeting is happening in Mumbai rather than Kerala.

http://www.bseindia.com/xml-data/corpfiling/AttachLive/341b44bb-23de-46b5-8128-89a9e2d21c24.pdf