My Portfolio_Homemaker


(Marathondreams) #110

small correction. 15% CAGR for 10 years would 4x and not 6x…


(Ediacaran97) #111

Dumboinvestor, can you explain the near stagnant or abysmal returns generated by a Hawkins, ColPal, Crisil- excellent ROE/Roce, in oligopolist sectors, but poor revenue generation last 5 years. Slow growth is reflected in their share price appreciation in last 5 years.


(dumboinvestor) #112

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(Ediacaran97) #113

“Beware the fury of a patient man”


(dumboinvestor) #114

@Ediacaran97 but I think colgate will give you 10% cagr for the next decade. Patanjali who came and blitzed the market could not eat into their market share… inflation is at 6% colgate can increase prices by 3-4% if not more every year. toothpase market is growing by 5-7%. Colgate has 50% market share it will capture half of that, that itself is 8-11%. Add to this dividends that you are getting , 2% at cmp.
Total returns will be 10-13%. Simple. And you will get this for a long time and then a decent terminal value as well, since the space has low disruption and high visibilty. A de-rating could occur to 20x. Alternatively they bring in more products and go in for aquisitions or grow their mouthwash aggressively. alternatively dividends would also increase slightly over time. So you can account for that and end up making 10-12% cagr,

Very simple. When to buy? look at the median PE and take a call. But over such a long holding period the pe entry wont matter. Earnings only drive stock prices for the most part 99% of the time.


(Manish Vachhani) #117

@dumboinvestor, there had been many complaints in the past regarding use of poor language, indiscipline. We have deleted many of such posts(88 in count) and you had been warned about the same. Looking at the continued indiscipline, your membership is suspended for three months. This is a warning to all the members who have been indulging in non civil behaviour that such things will not be tolerated.


(pradip) #118

Thanks for sharing the video. Its quite nice! :slight_smile:

If I be bit more explicit about the concern I shared on lack of sufficient public information, there are essentially three kinds of reports on any listed company-

1.Reports published by the company (annual reports, quarterly reports, investor presentation etc.)

2.Reports published by the brokerage firms, independent analysts etc.

3.Conference call report - This is very important in my understanding because lot of times you would see the management being questioned on significant matters and they then divulge important details (for e.g. RJ questioning Titan management in concals!)

If you would notice, in a few instances in the past (Satyam, Vakrangee, Manpasand etc.) the management might not be truthful always to the investors. So, reports in #2 and #3 category above, help investors analyse things better.


(Virendra) #119

Precisely only 2 things to be done as an investor.

  1. make a list of good companies - strong business models, clean balance sheets, able and honest managements, big opportunity (the criteria can be decided based on what you are comfortable with from the host of financial metrics at our disposal);
  2. And figure out the price you’d be willing to pay and then wait for the right valuation/price you’d be willing to pay (You did quote Sanjay Bakshi in one of your post - The post was titled’ “Pay up, but don’t overpay for quality.” I guess deciding the comfortable buy price is key).

I think just combining the two, you’ll be surprised by the results.


#120

Horlicks sale is nearing and Nestle, HUL are front runners. Anywhere between 3bn$-4bn$ valuation of Horlicks. Now MCap of GSK Con is 30000 Cr= 4 Bn$. So I am not able to figure out impact of the sale on GSK share price.

  1. Sale of iconic brand Horlicks is a negative
  2. Cash gain of 4Bn$ is a massive positive.

Finance , M&A experts in VP- pls throw light on this. Thanks !


(Virendra) #121

Don’t really track either of these companies, but based on the media coverage, effectively all of GSK business in India is coming from the unit being sold (of which Horlicks is a big part).

GSK in India will continue to focus on Pharma (though it doesn’t make up a big part of the business right now), if i understand right. However, given the parent GSK’s strong pharma line-up, GSK India should do well in pharma. However, given that Indian pharmas are basically generics plays while GSK is mostly ‘innovative’ medicines, what role GSK India will play going ahead needs more clarity.

Effectiveky, any deal value above market cap will be good for GSK investors (as an arbitrage play). Else, Without much visility of what’s to come, taking a longer term view would be hazy. Someone with more knowledge could add to this. For me, at this point in time, arbitrage play is all i’d see.

Discl: Not invested. Take my opinion with a ‘bagful of salt’ given my shallow ‘Pharma’ knowledge :smiley:


(Investor_No_1) #122

They already have a seperate pharma company listed. Does GSK consumer have any element of pharma?


(Investor_No_1) #123

I have burnt my fingers couple of times in merger/demergers…even corporates do not understand this much we are very small :slight_smile:
I am thinking, I would invest in Glaxo consumer if I think the remaining brands can play a big role or I know their vision about their cash.


#124

No doubt these brand sale out mergers are complex. My thought is like this. We all know its best to sell something at peak, isn’t it. Given long term outlook of malted drinks will decline as it has already, in developed countries, exiting Horlicks for 3-4 bn $ is great…that’s why I bought Gsk shares.

But what will happen to the cash, whether other remaining products will do well or Gsk Novartis will introduce newer products etc is unclear.

That’s the issue with minority shareholders. So far the share price has gained, slowly and steadily… But might exit if it falls or I fail to develop conviction. So 50:50


(simplyraghav) #125

Getting all the cash, that too equal to current market cap, is a huge plus on the balance sheet, however, I would try to look for GSk’s future capex plans in India. Are they going to invest in branding of their upcoming products or some R&D or M&A ? Depends upon their future guidance. Someone great said, the more cash builds, the more pressure there is to piss it away…


(Amit Jain) #126

Gsk is trading at pe 35.
Other Pharma stocks in the range of 25 PE.

Is not like GSK is going to get into something new and and outperform the competition anytime soon. It will take time. That’s why it makes no sense to pay twice as much.


(Investor_No_1) #127

That’s exactly what we should know in order to invest long term. If not accurately, at least company’s vision in India should be known post this deal. Anyone having this info pls share. One more thing…Horlicks is not just a malt drink…it is an iconic brand…its a distribution network…and much more… it shows that company is not willing to transform and work with that brand anymore in India because its flagship product of malt drink is not growing as expected… not sure what is the vision for India for the rest brands, future brands and cash is…


#128

(Virendra) #129

My bad. Missed that. So, that brings in even more uncertainty as to what the leftover GSK consumer will do.


(Investor_No_1) #130

Its allright. With MNCs it gets very confusing in what areas they are in India. I knew this as Glaxo had been in my radar since many years, my bad that when I made up my mind to buy it, it made up its mind to sell Horlicks :slight_smile: It will still remain in my radar as to what is its vision now for India


#131

Please Reconfirm PE. Its 35 to 37…where did you find 53??