Tarun Deep Singh portfolio,


(Dr. TarunDS) #1

hi,
I am Tarun Deep Singh. A medical student based in Delhi.
Have been trying to learn about the equity markets since the past few months.
have no guidance either from family or any friend.
Discovering VP has been as good as picking a multibagger stock.
have been amazed as usual about the extensive research done here by the seniors in the business.
sometimes i wonder, does the company know about themselves as profoundly as the members at VP do?

Coming to the objective:
i wish to build a long term portfolio & since most of what little i know is because of VP so would like to get it critiqued by you. I have invested in some of them & plan to buy the others as the opportunity arises. i want to build a portfolio where i can buy stocks monthly as SIP while some large caps or over valued stocks when an opportunity arises.

Request to respected seniors & fellow brethren- To identify any value traps, blunders or similar stocks which dont add value

Focus on Asset Allocation & Fundamental analysis
as i am new in the market most of the stocks have been discovered but nevertheless here it goes:

Auto & Auto Ancillaries (25%)

  • Jamna Auto -(improving fundamentals)
  • Amara Raja Batteries (Stable growth)
  • TVS Srichakra - (Value buy)
  • VST Tillers - (Belief in India is a agriculture story, good promoters)
  • Eicher Motors (To be bought if i get an opportunity)

FMCG/Tobacco (12%)

  • ITC - (steady compounder, has widening moat)
  • VST Industries - (read a write-up on it by Prof. Bakshi, High dividend stock)

Pharma (25%)

  • Aurobindo Pharma - (Steady compounder, ROE >25%)
  • Alembic Pharma - (growing company)
  • Sun Pharma Advanced Research (Lot of research going on & many drugs in Phase 3 trial, support of Sun Pharma team)
  • NGL Fine chem - (tracking position, company with decent numbers, niche stock with focus on vet medicines)

Software/IT (5%)

  • Sonata Software (_go to know about it in @hitesh2710 sir’s thread, not invested yet _)
  • Tata Elxsi (Good numbers, a TATA company)

Banking/Finance (12%)

  • GRUH finance - (Not bought yet, overvalued but steady compounder)
  • Arman Financial
  • Capital First
  • Satin Creditcare (Major company operating in the North)
  • City Union Bank (Well managed bank in a particular area ie Tamil Nadu)

Industries & Chemicals (15%)

  • FInolex Cables (steady compounder)
  • Srikalahasthi Pipes (Niche company with value proposition)
  • National fittings - (a very unique company, liked what it does, decent growth)
  • Ratnamani Metals - (showing good compounding with good promoters)
  • Kajaria ceramics - half of India is yet to make a home, good numbers as well

Others

  • HMVL
  • Mahanagar Gas (Switch to natural gas is growing, decent growth, caters to Bombay)
  • Avanti Feeds (although late to know about it, but still i guess it has juice, conviction buy as most VPers own it)

a request to respected seniors @ayushmit @Vivek_6954 @desaidhwanil @basumallick @Donald @manish962 @UtkarshP @aveekmitra @crazymama & many others i may have missed & all the fellow members

Scrolling this list please recall your first days trying to learn about the market.
i know this is full of flaws and immaturity but if yu can even contribute a single thought about it ill be obliged.
Please Help me reduce these to around 16-17.
thank you all th VPers & it’s founders where i could get an opportunity to learn & share my learnings. I am indebted.


(Hitesh Patel) #2

Good going Tarun.

U have got a list of good companies. The next thing I guess to do is to list in order of priority various companies and reasons for it. Valuations also matter at this stage of markets.

Since u have a long time ahead of you, you can afford to go for time tested compounders like hdfc bank, gruh finance, and the like in other sectors like pharma, or industrials, till smaller or mid cap companies with good growth potential with good management and business quality are available at decent valuations.

Every once in a while you do get sharp market corrections and at those times it is very essential to have a shopping list with rough buying levels ready so that one can act without too much fear or delay.


( s das) #3

I feel you may have diversified to much. My experience says diversification dilutes return. If you are a long term investor try to pick the best in the sector without worrying to much on valuation. If earning growth comes stocks which are expensive today will become cheap in future. In equity market if you are able to protect the downside of you portfolio will make a fortune in 15-20 years.
As Hitesh Bhai had said wait for the correct opportunities to buy truck loads in deep correction without worrying about downside. He had also suggested to buy safe and quality stocks like HDFC bank.I feel 8 -10 stocks are enough to create a solid portfolio. Without worrying about sectors always try to pick best stocks which have the potential to grow its earnings much faster then its peers.


(msiva) #4

Dr Tarun

Picks are good but what really matters is the price at which you are going to buy. Please address these issues before you venture in to buying : 1 ) What is the intrinsic value 2 ) Is the market price lesser or more than intrinsic value 3 ) what is margin of safety.

Good Luck

Regards

M Sivakumar


(Dr. TarunDS) #6

#Current Portfolio
BEPL (7.5%)
Maithan Alloys (6.5%)
Indian Toners (5.5%)
NCL Industries (5.5%)
Pokarna (5.5%)
Bodal Chemicals (5%)
Manapurram Finance (5%)
DCM Shriram (5%)
Sinclair (4.5%)
Alphageo (4.5%)
PFS (4%)
Avanti Feeds (3.5%)
Ambika Cotton Mills (3.5%)
Motherson Sumi (3.5%)
Monte Carlo (3.5%)


##Smaller Allocation
Lakshmi Vilas (2%)
TD Power Systems (2%)
Bajaj Finance (2%)
Ultramarine (2%)
Jamna Auto (2%)
Lincoln Pharma


Currently tracking

NESCO
Surya Roshni
NOCIL
Spicejet
Tata Metaliks

Have tried to consolidate this portfolio over the past one year.
want to thank everyone on VP and DIA, who have shared their knowledge and wisdom so openly. this is an amazing collaborative forum and i guess thats because of the top contributors here who have created a path for beginners like us to follow. Am grateful to them to always replying with so much humility always. @desaidhwanil, @hitesh2710 @ayushmit & special thanks to my brother @UtkarshP whom i could meet because of this forum.
due to limited time with me these are mostly cloning picks with basic background checks, basic AR reads and following few reliable sources.
another reason to put this up is to understand the evolving thought process and record it as a continuous journal and also improve upon with help of fellow boarders
Would really appreciate if fellow boarders could share their thoughts.


(Alphin) #7

I really liked your portfolio of stocks in your first post since they are well followed but seems you have gone for a drastic churning of portfolio and loaded up lots of stocks which are so called not so followed. Also you have shifted from moat based stocks to commodity based stocks e.g textiles and chemicals

In my opinion cloning works only if you follow well followed stocks as risks are identified and we’ll known usually well known stocks have wide moats and hence limited risk.

But cloning less followed stocks will be a potential disaster as market will react and then you will be confused if reaction is warranted or just a panic. Ideally you should have good followup of stock if it is less followed. That being said it can be highly rewarding finding unresearched stocks but that will require equal amounts of efforts from you as well, market does make you earn your keep.


(Dr. TarunDS) #8

Hi, thanks for taking your time and replying.
Most of the above moat based stocks have been laggards in the past one year eg amara raja batteries, supreme industries, shilpa, and many of them i just cudnt buy at a decent price eg eicher, vst ind. The plan was to do SIP in them equally.
But that didnt generate any result.
Now some of the stocks are out and some of them are there but less than 2% so i didnt mention them.
Well few of the stocks are cloned from an advisory service i have subscribed to as i also dnt want to act without guidance being a beginner. The theme is basically proxy for growing india. Will be looking to add large caps when possible during the next correction.


(Dr. TarunDS) #9

Have added recently

  1. Sintex Plastics
  2. TBZ
  3. Hawkins Cookers
  4. PEL
  5. GHCL

Started all with 2% allocation


(Dr. TarunDS) #10

Portfolio Updates - NOV’17

CORE STOCKS

  1. BEPL 10%
  2. MAITHAN ALLOYS 8%
  3. DCM SHRIRAM 6%
  4. NCL IND 6%
  5. INDIAN TONERS 5%
  6. MANAPURRAM 5.5%
  7. BODAL CHEM 5.5%
  8. AVANTI FEEDS 5.5%
  9. CESC 5.5%
  10. POKARNA 5.5%
  11. ALPHAGEO 5.5%
  12. PFS 4%
  13. SINCLAIR HOTELS 3.5%
  14. MOTHERSON SUMI 3.5%
  15. CAMLIN FINE SCIENCES 3.5%
  16. TBZ 3.5%
  17. PIRAMAL 3.5%
  18. EVEREST IND 3.5%
  19. INFRA STOCKS- RELIANCE INFRA, MAN INFRA, PATEL ENGINEERING 3.5%
  20. SPTL 3.5%

SMALLER BETS

BELOW 3%
HAWKINS COOKERS, AMBIKA COTTON, ULTRAMARINE PIGMENTS, JAMNA AUTO, UJJIVAN, SURYA ROSHNI, NESCO, NANDAN DENIM, LINCOLN PHARMA, MERCATOR, CERA, BAJAJ FINANCE, SPICEJET, TATA METALLIKS, TATA CHEMICALS, LAKSHMI VILAS BANK

PS: these are two types of stocks
(here in few of these stocks i add monthly SIP eg hawkins, ambika, nesco - as slow cpmpounders or
there are stocks where i wanted to allocate significantly but price run up didnt let me add enough so i wait for corrections to add more eg surya roshni, bajaj finance, spicejet,)


Few points:

  • started this portfolio last june.
  • havent booked much profits - only booked biocon and capital first and regretted
  • portfolio is showing 30% profit probably due to this bull run (BEPL, avanti, maithan alloys, indian toners) - few laggards have been PTC india, Alphageo, Pokarna, SPTL & Lakshmi vilas bank
  • as amateur, so conviction issues so lot of scrips with less allocation despite a small size, trying to reduce stocks whenever possible but end up removing only laggards and trying to stick with winners.
  • one senior messaged me once that why have i created a mutual fund! I didnt have any answer but am still working on it!
  • this is just 20% of funds- rest goes to mutual funds.
  • i ustd that i guess that is how any investor matures - buys initial whole load of scrips makes mistakes then learns more and starts to concentrate and tries to create some wealth.
  • will depend on advisory services further on as being a medical student time is less to manage it.
  • follow many people quietly here @dd1474, @Nolan, @Yogesh_s, @sajijohn, @bheeshma, @The_Confused_Consult @hitesh2710, @desaidhwanil, @ayushmit @Alphin thank yu seniors a lot for contributing.
    would request fellow boarders to share your views if possible, would be of immense help.

thanks to everyone contributing to this forum, as everyday there is some new learning here.
gratitude !


(Bheeshma Sanghani, PhD) #11

Hi @tarundsingh

I dont have any of the names that you have. However, your portfolio consists mostly of names that are in cyclical industries. Not that its a problem, just that a greater level of vigilance & knowledge is required to track a portfolio such as this. Cyclical stocks have delivered good returns and will deliver good returns in the future as well - but one has to make timely entries & exits to extract returns. I hope you are up to that!

Best
Bheeshma


(Nolan) #12

Dear Tarun,

When I look at your initial list of companies in your first post, I wonder why you haven’t been able to hold on to some very fine businesses you owned last year. I can understand exiting IT and Pharma stocks but the dips of Dec-16 must have provided you with an opportunity to trim the laggards and increase allocations to performing ones. Instead I see that you have largely shifted to unproven cyclical businesses (as Bheeshma also pointed out), to an extent even compromising the high quality of your portfolio. I am not against cyclical bets because at current market levels, its hard to find good businesses at reasonable value. And I would still agree with your current choices if you have high conviction on them, but since you have mentioned in your earlier post that you are a medical student, I am not aware how much time you have spent in analyzing these businesses to build enough conviction to hold on to them.

In your portfolio, there are companies like Bodal and Manappuram which I like at current valuations.

I also like Avanti, Piramal and Motherson Sumi though they are not undervalued anymore. If you hold them from lower levels, you must be having a decent margin of safety to hold them further. Although, personally, I do not have a positive feeling for Piramal because I find it difficult to analyze their business. After holding it for a short while, I sold it for a small profit. They have been growing through M&As, JVs, Strategic alliances, collaborations etc. which makes it hard for me to compare their numbers in organic terms. Also, Mr. Ajay Piramal often gives a feeling that he is working on this grand plan to fortify company’s position. Somehow I perceive that his mindset is to create a large business empire, and these kind of businesses do not fit in well with my investment approach.

I once held a tracking position in Alphageo but exited at a loss because there was no clear visibility for future growth. Today, it did bounce back impressively, but I am not sure if the rally was backed by factual event/s.

I have considered taking position in SPTL more than once in recent past. And FCCB conversions and sell offs can drive down prices further making it even more attractive in future. But the company is not known for being shareholder friendly. And when I look at low promoter holdings with over 50% pledged, I am not getting enough confidence to enter it.

Views are personal. Not holding any stock from your portfolio currently.

Good luck!


(Yogesh Sane) #13

If this is just 20% of your total investments then you are playing it too safe. As someone pointed out before, you have created a private mutual fund. Nothing wrong in that but you will get returns like a mutual fund with the added burden of keeping track of your portfolio.

You should definitively consider moving to a concentrated portfolio of 5 to 10 stocks consisting only of your high conviction ideas. Rank your stocks in descending order of conviction and pick top 5. It’s that simple. Just ask yourself if a stock drops 20% for ANY reason, are you willing to buy more? If the answer is no then sell it now and allocate that money to the stocks where the answer is yes. You will know what your high conviction ideas are.


(sandeep kochar) #14

hi Tarun,

can you share your rationale behind Sinclairs Hotel…


(Dr. TarunDS) #15

Portfolio Updates - NOV’17

CORE STOCKS (Avg Buy Price/CMP as on 15/11/17)

  1. BEPL 8% 50/144
  2. MAITHAN ALLOYS 8% 380/635
  3. DCM SHRIRAM 6% 360/595
  4. NCL IND 6% 217/251
  5. INDIAN TONERS 5% 178/297
  6. MANAPURRAM 5.5% 101/95
  7. BODAL CHEM 5.5% 150/173
  8. AVANTI FEEDS 5.5% 535/2592
  9. CESC 5.5% 1037/1031
  10. POKARNA 5.5% 276/221
  11. PFS 4% 43/37
  12. SINCLAIR HOTELS 3.5% 320/450
  13. MOTHERSON SUMI 3.5% 186/353
  14. CAMLIN FINE SCIENCES 3.5% 90/94
  15. TBZ 3.5% 118/118
  16. PIRAMAL 3.5% 2738/2623
  17. EVEREST IND 3.5% 430/459
  18. INFRA STOCKS- RELIANCE INFRA, MAN INFRA, PATEL ENGINEERING 3.5% (near CMP)
  19. SPTL 3.5% 103/77

SMALLER BETS

BELOW 3%
HAWKINS COOKERS,
AMBIKA COTTON,
ULTRAMARINE PIGMENTS,
JAMNA AUTO,
UJJIVAN,
SURYA ROSHNI,
NESCO,
NANDAN DENIM,
LINCOLN PHARMA,
MERCATOR,
CERA,
BAJAJ FINANCE,
SPICEJET,
TATA METALLIKS,
TATA CHEMICALS,
LAKSHMI VILAS BANK


NEW ADDS/EDITS

  1. ERIS Lifesciences (1.5%) 570
  2. Seeds (2%): MONSANTO (2460) + KAVERI (521)
  3. Balrampur Chini (1%) 158
  4. Breweries (2%): United Spirits 3070 + Radico 178

Few simple Stories which look interesting and where i wait for dips to allocate more

  1. Breweries: Bullish on sector as a whole: United Spirits (Diageo bringing the change and better governence) + Radico (Company cleaning up the financials, margins improving, debt decreasing)
  2. Spicejet (Domestic air travel story has just started and spicejet has given a huge order for Bombardiers & now with indigo bringing in ATR 's to compete & connect regional places i feel the game has just begun moreover with Ajay Singh who has made a great comeback [somehow sounds similar to steve jobs comeback at apple in late 90’s] and with him at helm it gives even more confidence, consistent good results put faith in the underlying story)
  3. Surya Roshni (electrification is also happening exponentially, demerger in future and a small but growing home appliance brand)
  4. NESCO: Excellent business just waiting for MOS with price as mentioned by @Yogesh_s ji as well
  5. Tata Chemicals improving corporate governence, Deleveraging happening, B2C business additions like Tata Sampann (branded dals and spices) could also improve the story and get a decent market share in future
  6. RM Drip
  7. Eris Lifesciences: Chronic illnesses and non communicable diseases will grow with increasing urbanisation and shift from village to cities, growing at a good pace though costly but a good domestic pharma play with an aggressive businessman at helm. Need to watch it more

PS: My overall knowledge is miniscule infront of fellow boarders and please feel free to criticise if yu find anything anything foolish, i would be happy to learn

  • trimmed BEPL by 2%
  • Removed Alphageo.

(Dr. TarunDS) #16

@bheeshma thank you so much for your feedback! actually the steady businesses get hidden either due to recent upticks or because as the portfolio is growing every month due to monthly addition of funds so initial businesses when enetered were of small allocation. but will try to trim down cyclicals and trying to see some businesses which although conventionally cyclical are getting more stable i guess eg sugar

@nolan thank you for your honest feedback!
some fine businesses like bajaj finance or RBL bank etc are still present in the portfolio but as mentioned above the portfolio was just beginning then and had really miniscule funds (part of pocket money :P) less than probably what i allocate for tracking as well today. i was testing the waters and i was taking it slow. Now i have started allocating a bit more so now the stocks which appear on top arent that well recognised but i hope they are doing well, i could guess maybe yu wanted to know my entry points for better assessment hence i have added the same for my top holdings, kindly take a look again when possible. Regards
would also like to update my investment thesis in a while as suggested by @Yogesh_s ji!

one again Thanks to all fellow boarders for contributing with open hearts!


(Dr. TarunDS) #17

sure,
about Sinclairs in brief: its a Growing industry & mid size hotels is a good space to be in, ethical promotors (Pressman group), available at decent valuations when bought with good margins (OPM over 28% in last few years) and expanding through internal accruals.Debt Free. hotels command good ratings across sites like tripadvisor. yesterdays results reiterate the confidence.
regret selling 1/3 of it & deploying it somewhere else sometime back at no profit no loss after holding for months and seeing it not move at all.


(Hitesh Patel) #18

hi tarun,

I think bheeshma has pointed out the cyclicality of some of the businesses in your portfolio. In cyclicals, if the price rises in your favour its often very difficult to exit as one is carried away by price momentum and fails to act when the cycle turns. Make sure you are not caught in that trap.

For a guy at your age, you can afford to restrict yourself to fewer stocks and higher allocations in solid businesses where you can visualise growth runway for next few years.

Ideal thing would be to gradually convert cyclicals into solid businesses as and when you find the opportunities.


(sandeep kochar) #19

Thanks…
This counter used to be very illiquid as @95% is with Promoters + PE funds… last month all fund house exited from this stock and good HNI and fund houses entered so now liquidity is improved…hv u any clue about why PE fund exited…?
In 2011, company bought Banglore based Savannah hotel but later in 2013 exited from this hotel…Any particular reason…? However company used this fund to Buy back the shares…


(Dr. TarunDS) #20

Major EDITS in last 3 months

  1. Removed Lakshmi Vilas Bank - not turning around as expected (-3%)
  2. trimmed- BEPL, Indian Toners, Maithan, Camlin, DCMShriram, Radico
  3. Sold ITL (+50%)
  4. Sold GAEL (+82%)
  5. Sold Manapurram (NPNL)
  6. Sold Surya Roshni (+62%)
  7. Sold Alphageo (NPNL)
  8. Sold Pokarna (-18%)
  9. Sold TBZ (NPNL)
  10. Sold Mercator (-2%)
  11. Added Equitas 3% @158
  12. Added Tiger Logistics 2% @ 236
  13. Added United Spirits 3% @ 3200
  14. Added Renaissance Jewellery 1% @ 322
  15. Added Genus Power 1.5% @ 60.5
  16. Added Mirza international 3% @ 159
  17. Added ZF Steering 3% @ 1390

Many Thanks to @hitesh2710 sir for continous support
& am also experimenting with 10% allocation to Yogesh JI’s Bluechip portfolio of 10 large caps with addition of United spirits & Piramal from nifty next 50. Thanks to @Yogesh_s sir for continous guidance as well.


(Dr. TarunDS) #21

Exited DCM Shriram (+62%)