My learning and portfolio review - Saurabh


(saurabhricha) #1

Hi All

This is my first thread on this wonderful forum. I would like to brief about my investment journey and would like all the members to review my existing portfolio.

Introduction

I am in my early thirties and mostly worked in software product development organizations. Even though opened demat and trading account in 2007 with my first job, but did not invest much due to lack of money.

Father is actively involved in stock markets, has a very good knack of picking good quality stocks but generally sells too early leaving a chance of creating wealth.

Taking lessons, I have started with long term investing from last 3 years.

2009-2012

Nothing much to talk about, was complete rookie in stock markets. Investing meant CNBC, moneycontrol, etc. and used to buy shares which were traded in the range of 50-60 rs. Luckily, did not lose money and did not make anything as well.

2013-2014

A big sin but started with 100% allocation only in one stock.

Bought Yes Bank @ 300 and sold with around 20% profit in 1 year.

2014 Onwards

Started reading about long term investing. Followed some quality blogs and came across valuepickr somewhere in 2015 end. Read one up on wall street, pat dorsey - 5 rules of successful stock investing and current reading Basant Maheshwari’s book.

Got lucky and first stock I bought was Can Fin Homes around 400. Sold the entire quantity around 2000 with 5x returns in 2 years.

Current Portfolio

CMI @ 125, CMP - 216 (15% Allocation)

Government initiative on railways. Infrastructure development in coming years to aid speciality cables company.

Cosmo Films @ 428, CMP - 432 (23% Allocation)

Packaging industry and a leading player in that. Low PE ratio.

Hudco @ 73, CMP - 69 (17% Allocation)

Betting on urban infrastructure push by the government, smart city projects, etc.

Minda Corporation @ 100, CMP - 118 (9% Allocation)

Good sales and profits in last 5 years, less D/E ratio and good ROE.

Nandan Denim @ 95, CMP - 151 (4% Allocation)

2nd largest denim manufacturer in India, good promoter holding. Good profit growth, improved ROE and ROCE for last 5 years. Capacity expansion to contribute to both top line and bottom line growth in future.

Suven Life Sciences @ 190, CMP - 172 (25% Allocation)

I consider this as a very big opportunity cost as holding this for last 3 years. Got good chances to sell during run up but did not sell considering good future growth. Currently pharma sector is down, so that makes it a laggard in the last 3 years bull market.

Suzlon Energy @ 21, CMP - 18.5 (7% Allocation)

Holding a small quantity considering the turn around bet and reduced debt as well as good performance in the last 2 quarters.

Cash Position

My cash position is currently equal to the amount I have invested in the equity portfolio. Waiting to invest as and when market corrects. This gives me a cushion on the downside and even I can average down in case of high conviction bets.

Tracking list
Century ply, kajaria, Asian paints, britannia, IndusInd.

Kindly provide your valuable suggestions on the current portfolio and future actions.


(saurabhricha) #2

Any comments / feedback, anyone ?


#3

Just my 2c. Cosmo films - although they seem to be moving up the value chain off late, their return metrics are not great, BOPP is still a cap intensive, commodity kind of business. You may want relook at your allocation here.
Suven - again I feel the allocation is quite high at 25%. The income from their alzheimer’s molecule is a high impact but low probability kind of bet. As an investor we want the number of steps required for a business to succeed to be lower/more predictable. I am not aware of their growth plans for the crams division.
Again this is only to give you a different perspective…good luck!


(saurabhricha) #4

@vinkash : Thanks for your inputs.

I am aware that the allocation is high in Cosmo films currently. It would be automatically reduced since I have close to 1.2x of cash which I am planning to deploy in case of new stock opportunities and some market correction.

I sold my entire holding in Nandan denim since it was very less quantity (4% allocation). Sold it at around 60% profit from the purchase price.

Also trimmed my position in Suven and sold 1/3rd of the shares today.


(saurabhricha) #5

From the time of first posting, the portfolio value has been increased to 1.5x as compared to July 2017. This is more to do with fresh deployment rather than gains on the existing folio.

The cash position is still equal to the current portfolio value. Following are the new additions in the portfolio:

1. Aditya Birla Money @ 80
Futuristic investment, equity and wealth management domain. Part of Aditya Birla group and subsidiary of ABCL.

2. Himadri Speciality Chemical @ 85
Leaders in coal tar pitch, betting on advance carbon material used for Li-ion batteries. Electric vehicles focus of the government.

3. Sintex Plastics @ 105
Demerger from capital intensive sintex industries, infrastructure push by the government, GST to add to bottom line.

All of the above are well researched stock on VP forum except AB Money.