So I have been investing since late last year.The majority of last year I was invested in stocks that were reasonably valued and had not participated in the run up. I was also almost always on 50% cash. My gains were attributed to rain industries at an avg buy of 130. I exited rain sometime in december when the stock was making highs. I slowly exited all of my holdings at entry price itself. I currently plan to rebuild my portfolio. I like going concentrated as my portfolio size is not too big and I’m very young (22).
SAIL 25% (currently holding 10%(80)- Delayed Capex plan that was supposed to end in 2015 is now over. And capacity is expected to ramp up over next few years. Last 3 quarters have been strong. Employee cost is falling. There will huge operating leverage as employee cost is set to stay constant but capacity has been ramped up significantly. They will be focussing more on long products (used in infra etc) that have better realisations. SAILs triggers- operating leverage, deleveraging on balance sheet, employee cost staying constant and increase in realisations. These could increase ebitda per ton signifcantly leading to huge delta. JSW are already operating efficiently. There is no new capex coming in the space. Risks are they could fail to ramp up capacities and this could lead to trouble. Any forced aquisition of NCLT steel players would be an issue. Downside however from current levels seem limited. Seems like all negatives are priced in. Worst case its a value trap. Im convinced on the steel story in India. I would however love to play this via JSW but the risk/reward just is not worth it. It is not a liked idea by analysts and thats why I like it.
Orient refractories 10% (150)- Fundamentally strong company. Non-cyclical in a cyclical space. Excellent mgmt and metrics. Debt free and cash rich.
Edelweiss 25% (currently holding 10%) (280)- Big fan of Rashesh Shah. They have a cyclical business in wealth mgmt and a non cyclical business in credit. A great way to play the financial theme in a growing economy I feel. Valuations are a bit expensive but I’m comfortable paying a slight premium for this franchise. They are growing quickly so earnings should catch up soon. Insurance break even is a plus as well. They face the normal risks of a financial company. But Im comfortable because Rashesh Shah has skin in the game.
CESC 15% (1000)- Just playing the special situation. Will be holding only spencer retail post the demerger.
Rest is in cash. Will be selling out cesc partially once demerger is confirmed and then will hold Spencer on listing and then reconsider.
The market is still too expensive in my eyes.
I would like some insights on my portfolio. I would also like some ideas as I find everything still a too expensive.
P.S I also have a mutual fund portfolio so I have not risked my entire equity capital on these ideas. These ideas would be around 40-50% of my equity portfolio. Everytime I find a compelling idea and Im not sitting on any cash Ill pull out of my MF portfolio.