Saji's portfolio


#41

@sajijohn
Why both Asian Paints and Pidilite? I also considered these but not part of my PF yet. Why not consider a FMCG stock?


(Saji John) #42

@drgrudge both Pidilte and Asian Paints were in my radar for some time. Due to valuations being rich I refrained. As the correction happened I jumped in since it carries much less risk because of its proven track record. I think Pidilite is a play in both construction and FMCG and Asian paints has construction plus auto ancillary(small) themes


(abhimakk) #43

@sajijohn can you please share your views on Sandesh after recent quater? Also any changes made to PF or planning to add more names?


(Saji John) #44

@abhimakk Sandesh was an opportunistic bet for me. It’s core media business is doing ok. Growth in media is not going to be significant. I am waiting for it’s real estate investment to make some impact as probably increase in dividend income or share price appreciation to exit. I have pruned Avanti feeds & Gruh and increased my stake in Asian Paints, Nesco and Ajanta. I have entered Cosmo films in this correction. I am holding on to all the other shares. Overall portfolio had an impact of 10 to 12% impact in this correction so far.


(Saji John) #45

As most market watchers are expecting a correction in the market, I did a review of the portfolio using the principles mentioned in the portfolio restructuring exercise started by @Donald Portfolio Re-Structuring/25% CAGR quality-growth for next 2-3 years. Here is the plan of action. I may be wrong in my assessment for individual stocks allocated to various categories. Please correct me if I am wrong. Looking forward to your comments and corrections. Portfolio plan.docx (11.7 KB)


Portfolio Re-Structuring/25% CAGR quality-growth for next 2-3 years
(eyesice) #46

Sir, I see that you are trimming down Avanti Feeds from the PF. Post the spectacular Q4 results, the stock has been hitting atleast 5 % everyday over the course of the week (despite market consolidating today). Even competitors like Waterbase are also getting a lot of delivery based trades. Doesn’t that tell that we can expect sectoral tail winds and we forget about valuations at this point?


(Saji John) #47

@eyesice Avanti is my top holding for the last two years or so. It’s share in the pf was disproportionately high. As retail investor we are not privy to all that is happening on execution front. We get only news that company wants us to hear! Plus the nature of business has a lot of uncertainties like disease, anti-dumping duties and forex gain/loss. Avanti MD said there could be an impact of 15% in view of the rupee appreciation even though they have a good hedging policy. We are putting our money on the hope that the company will deliver it’s proposed plan. So far they have delivered. But if there are events beyond anybody’s control, maximum impact is on the shareholder not on the management. So portfolio allocation comes into play to reduce our risk. Also it helps in diversification and net effect will be wealth creation. Even now the allocation is around 14% which I want to keep as long as the management performs!


(Saji John) #48

The results season is over for me. The recent correction and run up in Avanti enabled me to do rebalancing of the portfolio. One major plan during this rebalance was to increase large caps to about one third and rest in mid and small caps apart from getting rid of laggards(sanghvi movers, alphageo, sandesh, syngene)and opportunistic bets(cosmo films/nesco). Also exited IT and entered PEL as my top holding(better late than never). At the moment the sector allocation is as follows…
Banking/Finance/Depository: 25.76%
Chemicals/Paints/Agrochem: 23.12%
Pharma: 20.52%
FMCG/Retail: 18.4%
Construction/Steel: 9.79%
Individual stock allocation is as follows:
PIRAMAL ENTERPRISES 11.4
AVANTI FEEDS 11.2
ORIENTAL CARBON 9.5
HDFC BANK 7.5
PI INDUSTRIES 7.1
SHANKARA BUILDING PROD 5.4
GRUH FINANCE 5.3
CENTRAL DEPOSITORY(CDSL) 5.1
SHILPA MEDICARE 4.9
MANAPPURAM FINANCE 4.8
BODAL CHEMICALS 4.6
TATA METALIK 4.4
ASIAN PAINTS 4.4
AJANTA PHARMA 4.3
AVENUE SUPERMARTS LTD 4.2
CAPITAL FIRST 3
CCL PRODUCTS 3
Please give your valuable suggestions and criticisms. I do this exercise to commit myself to this plan of action. Thanks all Vp boarders for formulating my thoughts…


(vinoths) #49

Thanks Saji. Your allocation and picks looks good in your portfolio. It will benefit people if you can describe rationale behind choosing these companies. And do you have any reasons for not having Bajaj Finance in your portfolio? I feel some of your stocks can be consolidated and replaced with companies like BF and others. I knew valuations some of the quality companies are sky high… Also interested to know your free cash % reserved to deploy if markets corrects.

Regards,
Vinoth


(Saji John) #50

@vinoths Thanks for reviewing my pf. All the cos I have are from this forum and most of them are followed well by many boarders here. Regarding Bajaj finance, I missed picking it up as I went with Capital First and at that point, Bajaj Finance was trading at 4.5x P/B and Capf was at around 2.2x P/B. In hindsight, I understand that it was an error of judgment. My recent buys are Shankara(betting on infrastructure turnaround and 1st gen entrepreneur from IIT background, Sukumar Srinivas) CDSL (evergreen stock will be relevant as long as the markets are there with good cash generation), Dmart( good retail player with good model of own stores and good same store growth), Tata Metalliks( a play on smart cities implementation, borrowed conviction from @ayushmit). PEL is one stock I want to own, yet I sold it too early. I bought it back as it is a good play on the wide spectrum of finance including distressed assets which are likely to turn around(risky but management has proven its ability), the Pharma part is actually doing well with no US FDA woes so far, Also Ajay Piramal’s asset allocation skills are well known. Majority of my stocks are compounders. I am looking forward to 15 to 20% compounding. I am invested all the time. When better opportunities come I sell my least conviction idea and buy the new one. I know it is not the ideal situation. But that is the way I am comfortable with. There are some hope stories for me eg CCL(retail domestic and US retail business), Shilpa Medicare (growth to reflect in performance), Ajanta (US business to ramp up and get over the African challenges) and Manappuram( cheapest gold loan company diversifying into mfi and hfc as well)


(gautham1) #51

@sajijohn looks to be a very solid portfolio. keep it up.
shankara building prod caught my attention. looks interesting. but i have never come across a single outlet in Karnataka. ( we have kajaria, cera, hsil, astral, supreme all over the place). I know its not the right comparison. But i am surprised considering the segment they are in.
So is it a pure b2b player or do they have any retail sales?


(Saji John) #52

Thanks Goutham for your comments. Just go through the investor presentation of Shankara. It explains their game plan nicely http://www.bseindia.com/xml-data/corpfiling/AttachHis/da575975-fe86-4e84-91dc-b2e8996c2c39.pdf


(Varesh Savalvade) #53

Hi Saji,

Thanks for sharing the solid portfolio. Can you please elaborate more on how you keep Shankara different from HIL, Sahyadri Ind or Pennar as look like this space is too much if crowded with both organised as well unorganised players.


(Saji John) #54

@varesh Thanks for your comments on my pf. The building material products according to one estimate are expected to grow at 8 to 8.5% CAGR and with the implementation of GST players like Shankara will get good traction. The govt push is mostly coming for affordable housing and smart city projects. So a wide spectrum of building materials will benefit. Shankara with diversified products on offer with a good network of warehouses strategically located with dedicated transport system is at a nice vantage point. The companies you mentioned are good players in their own niche areas but Shankara will have the advantage of “available under one roof” which appeals to common customers.


(vinoths) #55

Thanks Saji for your detailed response.


(Varesh Savalvade) #56

Thanks you so much Saji.


(Peabody) #57

Interesting PF and good mix. My only comment -for an individual are you comfortable handling 17 scrips.Quite a few stories to keep track.
In terms of expectation you have mentioned that 15-20% return, what has the been the story for the last 2 years(2015-17). Since you are always fully invested how do you handle drawdowns
thanks


(Saji John) #58

It is quite challenging to keep track of 17 scripts. What is helping me is that they are all discovered stocks and well tracked by many in this forum. Also, I track the scripts on google alerts.

[quote=“Peabody, post:57, topic:695”]
Since you are always fully invested how do you handle drawdowns
thanks
[/quote]That’s an interesting question. The simple answer is I don’t do anything if it is not supported by any adverse news flow. I am mentally prepared for 20 to 30 % cut anytime. I have had 50% erosion in 2012. Another thing I do is on a regular basis I book profits on the stocks that have rich valuations after one year of holding and average up and down depending on the margin of safety of the other scripts. After I started this regular profit booking, I have had roughly 20% cut in pf market value during the market drawdown.


(raviimandi) #59

Hi Sajijohn,

Can we know your average buy price of your recent buys…


(Saji John) #60

Hi Raviimandi,
I picked up Shankara (871), Dmart (707), CDSL (316), PEL (2761) and Tata
Metalliks (689) recently.