My portfolio: inviting comments


(chets) #1

Hello all,

I am a middle aged software professional who is extremely new to the stock markets. Currently along with learning the basics of investing, I am also concentrating on creating a long term portfolio in the stock market. I am going to invest in a staggered approach every month in the following stocks (some of them have been picked after going through existing threads in this forum). The purpose of starting this thread is to have fellow boarders chip in with their views and suggestions. Hence kindly guide :

  1. Hdfc ( Long term holding in finance, rock solid stable)
  2. Hdfc bank (Best Bank as per me…will provide stable returns over the next many years)
  3. Bajaj finance (great growth story so far…expecting NBFC business to give good returns in next few years)
  4. Piramal enterprises (excellent leadership and value unlocking due to demerger)
  5. Balmer Lawrie (defensive bet with good dividend payout)
  6. Transpek (budding multibagger?)
  7. Wim plast (fundamentally good, banking on plastic industry growth)
  8. Jagran prakashan (based on Hitesh sir’s analysis that company may demerge the radio business)
  9. TCS (my preferred IT stock)
  10. Larsen and toubro (infra bet)
  11. Rotating short term capital (currently invested in geecee ventures)

All stocks except the last one are for long term. The last entry is short term rotating capital in some opportunistic quick gain stock. I have tried to fit in large, small and midcaps to get a balance of growth and stability.

As I have mentioned, since I am extremely new to markets, there may be obvious errors in my choices which I am looking forward to correct based on fellow boarders suggestions.

-Chets


(pankajs) #2

Please provide your investment rational for each pick. Why do you think they are good long-term bets?

E.g. Transpeck

The other thing is what is your overall expectation from you portfolio? That is important because say you expect to make 15% compounded over the next 10 years. Does each of your pick fit that bill individually? So can TCS, LT deliver that?


(chets) #3

Thank you @pankajs for your quick reply.

Since I am new to stock markets, I have chosen the following stocks which are industry leaders in their sectors. These cater to sectors which are essential in a growing economy like India: Finance, Banking, IT and Construction. These will move with the markets and provide less volatility as per me. Though they are all expensive, but with SIP approach, I may generate 10-20% returns in long term from these companies.

HDFC, HDFC bank, L&T, TCS, Bajaj Finance.

I have personally been a client of HFDC and HDFC bank and also Bajaj Finance. I think they have amazing customer focus and deep penetration and are heavily involved in India’s growth roadmap.

Piramal Enterprises: I have read few articles related to Mr.Ajay Piramal and am impressed the way he turned the company around. Also with the plan for demerger of the group, there is some value unlocking expected and hence I invested in this.

Jagran Prakashan: I read the thread here and saw one report where in the growth in the paper/radio industry will be stable in next few years. Also there is some groundwork being laid for radio business demerger. But the think I like the most about this company is how they are slowing increasing their focus in digital communication space and there is huge growth potential in that area. Hence I chose this.

Wim plast: Though this stock has run up since last 3-4 years, I read a report which fore casted the plastic industry to be growing at a stable growth. I have personally used Cello plastic products and find them to be of very good quality at reasonable prices. The company has also forayed into bubble wrap and aircoolers and i think that will bring good growth in the future.

Balmer Lawrie: This is packaging PSU which has an extremely stable chart since last many years and has very good dividend payout. Hence I chose this as a defensive bet which may not give extraordinary returns but will provide stability during turbulent times.

Transpek: I invested in this based on the cheap valuation it is available at. I dont have much info about this one as it was recommended by a friend.

Geecee: I have invested this in for short term as the company is going to deliver possession of one premium real estate project in the next one year which will bring very good gains to them.

Hence my basis for selection of most of the above stocks has been varied: good management, good opportunity, demerger value unlocking, sector leaders etc. My overall expectation is to generate 25% returns in long term and I plan to follow the quarterly results for each of these stocks. I also plan to review the returns each year and lookout for other opportunities to add/replace.

Looking forward to your guidance.


(shoaib zaman) #4

Hi.

Your company choice and rationale is good. There is diversification with various sectors, which is also very good.

What I would suggest is, “Dont invest a fixed amount in these stocks every month because stocks are not like index funds or actively managed mutual funds for that matter.” I would instead suggest that you decide which of these companies are you getting at a better price. Because markets are irrational, there will be few months, when all will seem expensive, at that point put your money in a 7day FD/liquid mutual fund. Then in some months all will seem cheap. But in most month, you will see that one or two or few of them are better priced than others.

Now should you price what is the right value. This is a difficult questions. I look at current PE levels as against the stocks historic PE level. The other two things that I consider is the PEG ratio (less than 1) and the PE level as against competition.

I think you should wait for other members to respond as they may have better suggestion on this part.


(chets) #5

Thank you @shoaibzaman for your reply.

As suggested by you, I will keep an eye on the fair/right value every time i buy a stock. I agree with your analysis that having a fixed amount invested every month may not be the right strategy.
However as suggested by you it is extremely difficult to derive the same. I will keep an eye on PE and PEG ratio along with having an insight in the company’s/industry’s future scope.
Are there any tools/websites that can give this information at one go?

Also I am planning to include Canfin, HMVL, Prima Plastics and Oriental Carbon in my portfolio. Do you have any insight wrt these stocks?

-chets


(MHS) #6

Check valueresearchoniline.com and our own screener.in, Most of the historical ratios r covered.


(chets) #7

Thanks @MHS
I ll try out screener!


(shoaib zaman) #8

MHS has already given two excellent website. The third one that I like is Equity Master. For a glance all three websites are good.

I dont have any view on any of these companies.


(chets) #9

@MHS Screener is awesome!! Best part about it is the flexibility it provides!

@shoaibzaman Thanks for the recommendation. I ll try out Equity master too!

I have added Can fin and HMVL to my portfolio. Both these stocks have good PE and PEG ratios.

Through screener, I noticed that L&T has a PEG ratio of 13!! :fearful: Is the data accurate? If it is does it indicate L&T is not a good buy currently?


(shoaib zaman) #10

Each company needs to be evaluated. PE or PEG is more of a short cut to decide if the company warrants your attention. Its one of the short listing criteria that can be used to bring the list to manageable level. Understanding the company is the key.

In your first post you have explained the businesses and your rationale very simply. Can you do the same for L&T? If you like the business, ascertaining its price is the next step.

I am not much into diversified business. For diversified business my view is it will always be a call on the management’s capital allocation skill.This is my personal view.


(chets) #11

Thanks @shoaibzaman ! I got your point!

Right now, the portfolio is in green. I am studying few pharma stocks, however their growth path and future plans are difficult to interpret.


(chets) #12

It has been a month since I created a portfolio and based on a lot of reading, switched around a few things: The current revised porfolio stands as follows:

  1. Bajaj Finance
  2. HDFC
  3. Canfin
  4. Transpek
  5. Balmer Lawrie
  6. HMVL
  7. Jagran Prakashan
  8. Piramal Enterprises
  9. Wimplast
  10. Indocount
  11. Jamna Auto
  12. Shree Pushkar

Stocks that I am watching but not entered yet are:

  1. Prima plastics: It has run up too much too fast
  2. Syngene: Still trying to understand the pharma space.
  3. Few NBFCs
  4. Few other auto ancillary companies.

This forum has been an eye opener for me. The more I go through stuff here, the more my ignorance unfolds.

Any comments or suggestions related to the protfolio are welcome.


(chets) #13

I need some advice on how often to shuffle my portfolio.
Every fifth day, I hit upon some interesting story which I feel like investing in :slight_smile:

It is extremely difficult to see your stock sleep while some other opportunity which you had an eye on racing away

Any insights in this area would be helpful!


(Alphin) #14

You should find the intrinsic value of the stock . Then buy it on discount to this value.

Until you do this, u r like a blind person driving a car in a traffic jam.


(chets) #15

This is how the portfolio looks as of today:

Top holdings:

Sitting on 20% cash. Have trimmed positions in Jagran Prakashan and HMVL last month. Exited Indocount without loss and Transpek with decent profits.

Also looking to enter Eicher Motors, Force Motors, Pi industries in next 3-6 months.


(ramanhp) #16

Some excellent pics especially in financials. Just curious to know the rationale of your investments in Shree Pushkar?


(chets) #17

@ramanhp

Investment rationale in Shree Pushkar is as follows:

  1. Environment friendly and zero waste chemical company.
  2. Virtually debt free
  3. Very good expansion plans (all through internal accruals). The real growth which has started getting reflected in this quarter’s result will keep getting better in coming quarters as the expansion plays out and new products are launched. Full realization will be visible in 2018 H2.
  4. Transparent management with a good vision.
  5. More details at : Corporate Presentation

This stock was also highlighted by Dolly Khanna last month on her blog page.

Regards,
Chets


(chets) #18

This is the current status of the portfolio. I have been slowing building up positions whenever market presents an opportunity. Have added Ajanta Pharma to strengthen my pharma profile and increased allocation in Shilpa. Also increased allocations in Bajaj Finance, Canfin Homes and Shree Pushkar:

Comments invited.


(chets) #19

Here is the portfolio as of today:

  1. Trimmed Canfin. Forced move as it had run up too fast. :frowning: Will reenter at lower levels.
  2. Exited ICICI.
  3. Entered Suzlon and Sanghvi Movers. Good margin of safety in these stocks and favourable sectoral tailwinds.
  4. Exited positions in Ajanta and Shilpa.
  5. Got lucky and got Avenue Supermarkets. Built further positions in this. Keeping them for long.

Lessons learnt:

  1. Patience pays. Exited Transpek too soon. Stock is now 3 times within a year.
  2. Dont try to time the market. Run ups happened too fast. The levels I had expected in 3 years from some stocks were shown within 10 months. It makes me happy and uncomfortable at the same time.
  3. Look at sectors rather than stocks first to identify tailwinds and headwinds and then proceed for stock selection within the sectors.
  4. Based on model portfolio: Have segregation between core stocks, compounders, opportunistic bets etc.

Overall money allocation:

  1. MFs: 50%
  2. Stocks: 25%
  3. Cash: 25% (parked in my home loan account)

Thanks to VP forum, I am learning a lot every passing month. I have started building a portfolio for my wife as well recently. Stock picks include Techno Electric, NESCO, Natco, Shilpa Medicare, PI Industries.

Major influences from @Mehnazfatima, @Yogesh_s, @bheeshma, @hitesh2710, @T11 .
Thank you all for contributing to my learning curve!!


(ramanhp) #20

You have an impressive portfolio of so many quality stocks. Kudos.
What do you feel about Piramal Enterprise and Shree Pushkar? Have run up recently. Do you feel they still are good candidates for next 3-4 years? Appreciate your views.