Yes, I agree investing at these levels is not as easy as investing an year
ago. However I still hold my position in MOSL.
Given the cyclical nature of the business which is correlated to market
performance I think most money would only be made by those who would be
able to exit it at the bull cycle tops (easier said than done!). Therefore
I view my current position as a trade than a very long term investment. I
am hoping that with the bull market in place the P/E will be intact
(neither increase nor decrease) till the bull cycle top comes and money can
be made by increase in earnings .
Say nifty compounds at 15% for the next 3 years it is possible for the
company to grow earnings at 25% with help of some operating leverage.
Comparison to peers is a little difficult as all the NBFC’s have a a
unique business model and risk profiles. I don’t see many AMC + Broking +
PE fund + Housing finances.
*Fundamentals: * Overall I think the company is executing the plan well
and is positioning themselves to become a large finance institution. Below
are a few thoughts:
Broking: Held their market shares and customers in spite the presence of
low cost brokerages. Not many new entrants now in this field.
AMC: Growing at a rapid pace approx. 10cr per day inflows in focus 35
fund. However the competition is increasing from new funds being launched.
Trying to enhance brand to stay competitive.Regularly see this ad on
*PE fund: * A lot of wealth creation is being captured by PE funds in
general. Lofty exits in IPO is commonplace.
*Housing finance: * Business is growing at a reasonable speed. LTV < 60%
and avg. ticket size of 9 lakhs gives me some comfort about underwriting.
Investments: Their investments in their own MF are doing well and they
are booking profits from it.
P.S: I am new to markets and there maybe many things I am missing. Please
do your due diligence before investing.