Need suggestion on portfolio SK

(skg) #1

Hi, I am almost beginner in stock market. I did some trading in past and lost some money as I bought shares without knowing about what company is doing. This time I am planning to be a value investor and invest in good quality stocks. Below is my portfolio as of date and I need Value pickr members expert suggestion.

Name Investment price
Bharat Electronics 167
CPSE ETF 26.70
Coal India 250
Deep Industries 190
Exide Industries 220
ITI 129
Jindal Steel and Power 188
Bhushan Steel 44
ICICI Lombard 751
SBI 277
Yes Bank 311
Maruti Suzuki 9500
M&M 758
ITC 260

My main allocation is in Bharat22,CPSE ETF, Bharat Electronics and Jindal Steel and Power. I am planning to have below portfolio in long term along with expected price. I will not wait for below price to come. Instead I will buy these stocks as soon as they are 25-30% down from current price.

Bharat Electronics - 100-120
Exide Industries - 100-120
Amaraja Batteries - 400
Maruti Suzuki - 5000
M&M - 450
ITC - 120
HDFC Bank and/or ICICI Bank - 1200/150
Yes Bank - 250
HDFC - 1200
Jindal Steel and Power - Already below book value
Asian Paints - 500
Cera Sanityware
Kajaria ceramics - 250
Eicher motors - 12000
Escorts - 400
Dilip Buildcon
Persistent Systems

Apart from these, I am thinking of small cap like Deep Industries, Nitin spinners, Kitex garment. Currently I have allocated 25% of my planned invetsment. I am waiting for some stock correction(25-30%) so that I can allocate 25-30% more to my portfolio. My horizon is long term(5-10 years or more) depending on how business perform.

Any feedback on the stocks and/or price will be appreciated.

(Divyanshu Bagga) #2

Public sector companies never become long term wealth creator. At best, their returns will match inflation. Though, they can be good short term bets if there prices become too depressed. Or if privatisation card is being played, then that can unlock huge value. But that will be special situation Investment.

Position size is just as important as stock picking and entry price. FOMO can make you own all the hot stocks out there, but if your bets are spread too thin, the overall returns will only approximate the average market return. Concentrate on a handful of well researched stocks. It should be your research for you to have conviction of holding them.

That said, you will find seperate threads for some of the stocks mentioned above in this forum. I assume they are good picks, but I only own HDFC bank. It’s a long term growth story, and with value migration from PSU banks, we can expect the growth story to continue for few more years. Besides, it is a kind of business where size is beneficial, as it will have a larger pool of loyal customers.

Lastly, I would not suggest adding a stock if it has fallen 20-25%, unless market is also down by the same magnitude or more. But if your stock is falling that much in a rangebound or strong market, then something is likely to be wrong with it’s business.

(Utsab) #3

ITC is a super fmcg stock but it’s a huge laggard. Movement is not there much. Goes from 260 to 275 and then again falls to 260. Have tested the patience of it’s shareholder for a long period of time

(skg) #4

Thanks @Divyanshu_Bagga . I agree about public sector companies. I am planning to have only Bharat Electronics in my portfolio and get rid of Bharat 22, CPSE ETF and probably Coal India too. I am double minded about SBI since it is biggest public sector bank and available at good rate. But considering whats going on with PSU bank, I might sell it or keep it in small quantity.

About Bharat Electronics, reason why I want to keep it is -

  1. There is Make in India initiative going on and Bharat Electronics will have advantage of this. e.g. Boeing will setup a factory in India with HAL. Similar initiative might be happening for Bharat Electronics too
  2. Order book of Bharat Electronics is huge and it has a wide MOAT. There is no other company to compete it.
  3. Available at good rate near to intrinsic value(120).
  4. Modernization of weapons is expected in India and this is mentioned by defense minister too.

Again thanks for your feedback

(skg) #5

@Utsab I have ITC for around 6 months and I observed same. There is less movement. Reason why I bought is mainly due to monopoly in cigarette business. Currently I have very small quantity of ITC(5%). 50% of my portfolio is of Bharat 22,CPSE ETF and Jindal Steel and Power.

(mylu) #6

I was buying BHEL in SIP , it was continuously going down. I read through the CAG audit report sometime back and decided to move out of it completely.

(skg) #7

Hi All

I am uploading my current portfolio and future considerations. I need feedback from seniors on my portfolio. I know that will be a suggestion and not the recommendation. So please feel free to suggest any changes.

My main questions are -

  1. Is there any major risk missing on any of these companies?
  2. Am I thinking of over-diversification? I was thinking of holding 15-20 companies. But I might end up in holding around 25 companies.
  3. Any comment on portfolio diversification in term of small, mid and large cap?
  4. I had few other companies in my watchlist like Dabur, Godrej Consumers, Amaraja batteries, Balakrishna Industries, Cera, Kajaria, Century Plyboard, Caplin lab, Multibase India, Havells, Asian paints). But most of them are at high PE. So I dont plan to buy them until there is huge correction in price.
Name Current allocation(%) Target allocation(%) Reason
Currently holding
ITC 3.5 7 1. Diversified business in hotel, tobacco, consumer products 2. Stable growth, low chances of capital erosion
Maruti 3 7 1. Have only tracking quantity. Planning to buy more on dip 2. Biggest shareholding in car 3. Spare parts available almost everywhere. So most of people want to buy only maruti car specially in small cities. This trend is changing in metro cities considering there are some good car /SUV from Hyundai and Renault 4. Good management 5. Company is looking for shift to EV and CNG/Hybrid cars 6. Zero debt
M&M 2 0 1. Mahindra is one of good brands in tractors even though Mahindra is not doing good in SUV. 2. Good management
Bharat Electronics 11 8 1. Single largest company in defence equipment manufacturing 2. Growth is not good. But there are no chances of capital erosion 3. Defence equipments are not modernized and there is need of updating them. BEL is going to benefit from Make in India initiative 4. Zero debt
Yes Bank 3.5 7 1. One of good private sector bank 2. Management seems good 3. Available at cheap valuations as comparative to other private sector bank
Exide Industries 3 5 1. Good brand in batteries. But I might buy Amaraja in future and sell exide. I heard good feedback about Amaraja
Dilip Buildcon 7 8 1. Good order book which keep on growing. DBL seems to have enough order for next 3 years 2. Diversified in different states and areas like road, bridge, coal mines etc even though most of orders are from NHAI 3. Management seems good 4. Owns equipment and no subcontractor. Most of projects(90%) are completed before time. Risk - 1. political connection with BJP govt. So not sure what will happen if BJP doesn’t come to power in next election 2. Debt is high. But it is getting reduced
Avanti Feeds 5 7 1. Low debt 2. Good management
CPSE ETF 11 0 1. Bought few months back and was not aware of ETF funds at that time. Will sell them gradually as soon as I get confidence in buying individual stocks
Bharat 22 ETF 13 0 1. Bought few months back and was not aware of ETF funds at that time. Will sell them gradually as soon as I get confidence in buying individual stocks
Jindal Steel and Power 10 7 1. Demand of steel will never go away as steel is being used everywhere 2. JSPL is revamping and reducing debt. With Naveen Jindal son involvement, JSPL will soon be profitable 3. Company is mainly building rail tracks. With infrastructure getting improved, there is need of more railyway tracks. Hence JSPL will get benefit Risk - 1. High debt 2. Political connection(congress) of Naveen Jindal and his name appearing in coal scam
Mirza Intl 2 5 1. Red tape seems good brand and used by youth 2. Company is making sports and other type of shoes for domestic and international market
Persistent system 2 5 1. Mid size company focusing on digitalization, big data, Machine learning mainly in health care domain. These are the areas which seems IT future 2. Presence in multiple countries
Rain Industries 2 5 Not sure about the business
SBI 5 5 1. Biggest public sector bank. There are chances of getting benefit from govt aid. 2. Low chance of capital erosion
Coal India 4 5 1. Biggest player in coal 2. Coal seems main source of power in India and it will not change soon
Others(ITI,BHEL,ICICI Lombard, Deep Industries,Bhushan steel) ITI- 3 BHEL -4 ICICI Lombard -2 Deep Industries -2 Bhushan Steel -1 1. ITI - makes communcation devices. But going into loss for long time. So will sell it 2. BHEL - loss making company. Will sell 3. ICICI Lombard - Don’t have any knowledge about company. I have small quantity of it. Hence will sell it soon 4. Deep Industries - I bought it considering low PE, good ROE etc. But share price keep going down due to its owner named in ONGC corruption scandal. Hence will sell it 5. Bhushan steel - bought few months back when companies were bidding for it. I assumed price will increase once any company buy it. But price reduced to half. I sold half of quantity and will sell rest of them soon
Future consideration(will buy on dip)
Aurobindo pharma 3 1. Low debt 2. Seems company is diversifying business from US to Europe. It was in my watchlist for few months and saw price increasing from 500 level to 700. I didn’t buy any pharma stock since I was not sure about pharma sector
ICICI Bank 4 1. Second largest bank after HDFC. I am personally using ICICI for 10 years and like it.
HDFC 3 1. Good management and brand 2. Good processed
HDFC Bank 4 1. Good management and brand
Infosys 5 1. Good Management 2. Second largest company after TCS and available at low PE than TCS
Piramal enterprise 1. Good Management 2. Diversified business Risk - 1. High debt
Evaluating(thinking but not decided)
Harita Seating 1. TVS group company 2. Low debt 3. Seems biggest player in seat in all categories of vehicles
Mayur uniquoter 1. Provide leather to most of car brands 2. Low debt 3. Planning to reduce cost through PU leather
CMI Ltd 1. Biggest provider in specialized cable 2. Recently started Baddi plant which will increase production Risk - 1. Railway seems main client. So dependent on govt. 2. High debt

Holdings.xlsx (13.3 KB)

Hi @Yogesh_s @hitesh2710 Sir, Special request to you to provide your feedback on my portfolio.

(Yogesh Sane) #8

Its good to see that you have listed your reasons to invest in these companies. Next question to ask is ‘who doesn’t know that?’. Often for large companies all bullish arguments are already baked in the market price and you should buy or hold these if you have some insights that make you more bullish than the seller. Otherwise, a portfolio of 25-30 stocks will have a tough time beating a mutual fund which you can buy and spare yourself of all the trouble of building one yourself.

Another suggestions is to list out risks that you see ahead for each of these stocks. Often, we are biased towards companies we own and fail to see risks that can hurt. Having an idea of risks will prepare us in case when the risk materializes. Sometimes risks could be as simple as high valuation coming down while the company itself doing just fine.