Saurabh Portfolio for 20% Expected Return


(Kumar Saurabh) #1

Hi All,
Have been invested in direct equities for past 6 months using market correction as entry point. With rising confidence, building a portfolio for 10 years. Though have picked up lot of stocks, idea is to get some quantity to keep tracking them and study more about them to build further conviction. However, would like to see list of 49 stocks reducing to 20-25 in next one year.
Would need your guidance, suggestion and feedback on my SIP/regular investment rationale, plans and how to consolidate, point out stocks which do not make sense and other valuable suggestions:

SIP Share : Distribution of Capital for next 3 months of SIP
Invested Size : Invested Portfolio Distribution
Current Size : Current Portfolio Distribution


My Portfolio Please Help
(harish.cng) #2

@suru27,

Not able to read the portfolio equities. Better if you attach equity names with big font size.


(Gurjot) #3

Click twice (not double click) on the image - you'll be able to view it.


(ASPN) #4

It is possible to view the portfolio with some difficulty. But @suru27, 47-49 stocks at individual level is too much, its more than a mutual fund scheme. IMHO, even 20-25 is on a higher side, if you plan to properly track the stocks.

I dont know how you identify a stock. Suggest you to go thru the depth of discussion provided in many of stock stories in this forum. It is the collective brilliance of the vibrant forum members who dive deep, look for the red flags, green shoots & what not and provide a holistic view of a company. It has been a personal experience to read, opine, discuss, contribute and learn. Can you dig so deep for each of the stocks? Well, you must not be doing anything else then (business/job etc) for living :stuck_out_tongue_closed_eyes:.

All the best !


(Kumar Saurabh) #5

Hi @Advait_6270, Thanks a lot for your reply.

Reasons I would like to have 20-25 stocks in portfolio:
1. Not comfortable having too concentrated portfolio of 8-10 (based on past experiences, may be , I am not able to build that level of conviction)
2. Can do SIP (do not have large bulk amount to put and hence building portfolio sslowly). So, the problem with having too few stocks is if some of them run up too fast and I am not comfortable buying as SIP, then, I do not know where to invest. So, kitty is little big to keep getting opportunity among this basket

  1. I would like to track these 20 stocks on regular basis and if performance in-line, then, not much digging deep but if things go wrong, then, will take a deeper look for hold or exit decision

Now, penning down thoughts behind buying these stocks.

I Understand Business and comfortable to do SIP based on current valuations (18):
Ideally, there are 18 stocks which I have read in some detail and would continue doing SIP
1. Alkem Laboratories
2. Majesco
3. Hindustan Media Ventures
4. Heritage Food
5. Cera Saniatryware
6. PI Industries
7. Mindtree
8. DFM Food
9. Amrutanjan
10.Persistent System
11.Skipper
12.Kitex Garment
13.Interglobe Aviation
14.Gruh Finance
15.Cholamandalam Investment
16.Tasty Bites
17.Repoco Home Finance
18.Ashiana Housing

I Understand Business, purchased in past but not comfortable to do SIP based on current valuations(4):
1. Page Industries
2. Thyrocare (working further to comapre with lalpath labs and move to 3)
3. Dr. Lalpath Lbas
4. Bajaj Finance

Scripts which have gone wrong and not doing well and in hold stage (3):
1. Sun Pharma
2. Jubiliant Foodworks
3. HSIL (Can move this money to cera)

One Time Purchases: I purchased this as a one time purchase as risk reward ratio due to price correction looks very favorable (8): These are mostly large cap stocks purchased at price points where chances of loss were low,so, I intend to just hold them as it is without further addition or offloading for next few years (On this a 10-15% return with a low beta expectation, in long run this would be hardly 10% of my portfolio)
1. ITC
2. L&T
3. Maruti
4. SBI
5. ICICI
6. Lupin
7. HCL Technology
8. Infosys

IPO Valuation was attractive and hence invested
(One time
1. Equitas Holding
2. Ujjivan Finance

I purchased in small quantity to build further conviction for entry or exit (out of sight is out of mind for me)/buy with right valuation (10). May be as I already have 18 stocks in my SIP list, i should sell these and exit completely until I get questions/insights on why some of those 18 stocks do not make sense and these stocks at current valuation are better and can replace some of the 18 stocks in my SIP list

  1. La Opala
  2. Ashapuram Intimate
  3. 8k Miles
  4. Lakshmi Vilas Bank
  5. DCB
  6. Kaveri Seeds
  7. Vidhi Dyestuff
  8. Granuels
  9. Ruchira Papers
  10. Astec Lifesciences

Now awaiting your and other seniors comments, specifically to those 18 stocks I have mentioned at the top. :slight_smile:

I understand looks like a complicated and confusing portfolio, hence, looking for help to simplify


(Srikanth) #6

Please do a rating on all the stocks on a scale of 1 to 5...for following parameters 1. Growth till now 2. Management quality 3. Size of opportunity for growth 4. Current valuation .. the rating will help to eliminate a few stocks and focus on stocks which u feel better


(Bhaskar Jain) #7

I think you are on the right track and need to build your conviction yourself. No need for confirmation from any "seniors" -- only you are responsible for your money and strategy. You say you have started investing in direct equities in the last 6 months but based on your responses and portfolio, it seems you have been tracking markets and know enough about portfolio sizing, entry points, valuations etc

Most important thing to keep in mind is the promoter quality so there are a couple of companies in your portfolio which look speculative to me. Do study past actions of the promoters and think if they are friendly towards minority shareholders, are not crooks etc

I would just ask you to do the following:

1) create a separate physical folder for each of your investments and note down why you have invested in a company -- is it attractive valuation,future growth, any catalysts you foresee etc
2) keep updating with related news articles, quarterly earnings reports, management interviews, your thoughts on how you see the company progressing, whether you would buy the company at cmp if given an option..
3) when in doubt or when stock falls, go back to your notes and read them

As long as you can keep learning in the markets, not make any stupid speculative decisions, keep learning from your mistakes and have a long term bias -- you are set on a path of success.
All the best.


(simanchal ratha) #8

this is a mutual fund portfolio .
better to rely on an expert fundmanger than this one .


(NSARKAR100) #9

Hi,

I am a newbie to investing too, but I must must that this looks very promising.

Now, lately I have been thinking of investing in Skipper and Granules. Could you tell me ur rationale behind investing behind these stocks?


(krpwn1516) #10

Skipper has been doing pretty good in its business and also has a promising orders in hand, which are capable enough to take the company to better valuations.

Pls refer to the attachment for some clues.Skipper .pdf (408.9 KB)


(NSARKAR100) #11

Thanks for that info @krpwn1516. I think what is lacking for is company is brand positioning. Look at what astral did. I think a strong brand ambassador and good or can do wonders for this company, i.e. in the PVC segment


(dkanagar) #12

One issue is that it derives more than 85%+ orders from one customer- power grid


(Kumar Saurabh) #13

Thanks . Have started doing it and must say, it has given me further insights for relative capital allocation


(Kumar Saurabh) #14

Thanks. Point noted and now a maintain folder for stocks with reqd. doc. Yes, I was in the market but due to shift in career, had to be completely out of market and reply more on mutual funds. however, as I have bandwidth available now, rebuilding my portfolio with a small % allocated to equity which I am slowly increasing.
The historical performance analysis is almost automated. Now, I am looking to use technology to automate quarterly tracking of these companies.


(Kumar Saurabh) #15

The reason for investing in skipper are following:
1. Financially, one of the most well maintained company in list of infrastructure pack
2. Strong historical growth in revenue and profitability
3. Available at discount compared to no. 1 player despite of maintaining comparative healthy financials
4. Visibility in growth areas based on management guidance and historical execution capacity
5. Management's intent to reduce debt while expanding revenue and profitability
6. Improvement in key financial ratios

Key concern areas:
1. Based on last 3 years trend, increase in accounts receivable is 26% higher than growth in sales
2. Cautionary stand on current liabilities and related parameters

Granules, I have taken a marginal entry based on preliminary understanding of good basics, however, yet to take a long term decision based on future study. That is the approach I am following when I see an interesting company and currently sum of all such companies are less than 10% of portfolio and none of them more than 1% of my portfolio individually


(NSARKAR100) #16

Thanks for the lovely analysis @suru27 Some more companies on my radar are -

Note: I dont understand fiancials that much, so my views may be a bit misguided

Arvind - great play on branded fashion, especially in the bridge to luxury segment

pros

great potential for growth
continous addition of brands with global fashion powerhouses in JV mode

cons

PE has already expanded
Their subsidiaries which are into non-related business are not so attractive

Srikalahasthi Pipes - Low valauation,decent order book

pros

Vaulations are low
govt focus on water projects

cons

high dependence on govt

Cyient - great play in software product space ( IOT and Engineering )

pros

niche tech playerwith high margin
client has high dependecies on provider as solutions are highly tailored, so there is stickyness

cons

global slowdown
curreny headwinds

Kwality - Play on organized dairy segment

pros

established model with high profile clients
business transformation from B2B to B2c, which can expand margins

cros

highly ambitious
company taking on high debt ( although cash flows from B2B segment is stable in nature )

I would love to hear your opinion on the same


(Kumar Saurabh) #17

Though I never tracked any of these companies, kwality and arvind never came to my radar because of few rules which I follow for stock selection . One of them is low debt or signs/possibility of intent to reduce debt. Kwality and Arvind were always out because of this reason. It is more of a personal choice to avoid risk.however , in dairy , I am invested in heritage though I understand current andhra telangana split can have major negative impact . Still, I believe this one of the reasonably placed bet any relatively attractive valuation in dairy space . Positive triggers are : continued growth in value added dairy products, signs of turnaround in retail business, jv in pipeline for value added business, successful expansion in other states though difficult due to local dairy brand factor, chances of catching up to peers in ,. Concerns : political risk affecting growth in core geographies , extended retail business breakdown


(NSARKAR100) #18

Hi @suru27 , yes I agree, hence my scepticism to enter Arvind, despite believe i growth prospects,

Regarding Heritage, I have a very small stake. I entered primarily due to low valuations and stamp of approval from Vijay Kedia :stuck_out_tongue:

But of late, I have had my doubts, some based on the points u pointed out and on a very peculiar stance of Heritage. They say they want to hive off their retail segment eventually, yet they continue to expand very aggressively and rapidly. This strategy sounds very absurd to me. Why would you pour more money to expand a loss making entity just to sell it off?

Also, you were mentioning something about a JV, could you please shed some light on that?


(Kumar Saurabh) #19

Can you throw light on hive off retail business in case it was communicated by management. The JV stuff is mentioned in con call transcripts though they have not disclosed details.


(NSARKAR100) #20

http://www.thehindubusinessline.com/companies/heritage-foods-may-hive-off-retail-arm-into-separate-unit/article4895319.ece

Plus, I dislike their ecommerce ambitions. ecommerce is a cash guzzling machine