Vinit Bhat(@VB1) presented on Deep Industries, an asset heavy company into gas compression and dehydration. The company has run up recently, but has ~3yrs revenue visibility in order book without additional capex. However, valuation concerns exist due to inability to demonstrate positive FCF generation, and limited earnings visibility due to Indian scenario of ~3-5yrs contracts. The stock has interesting points like signaling(PE investment in subsidiary signaling potential high IRRs), lender choice(HDFC involvement implying good quality).
Vatsal Shah(@vatsal29) presented on Premier Explosives, which is a Hyderabad based midcap whose investment thesis revolves on transitioning from industrial explosives to defense segment, and value migration to NHN explosives. He emphasized that defence changes are usually multi decades and show up slowly. However, near term triggers for the stock are the Rs 15,000 crore LR SAM missile tender, of which 1.5% could potentially accrue as revenue to the company. Those interested further can research the India Spends report on defence, as also ISRO report on NHN explosives(not included in this presentation).
Yogesh Sane(@Yogesh_s) presented on calculation of investment returns. He opined that for those who actively manage their portfolio spending tremendous time and effort(eg every month Sunday afternoon, reading, posting, whatsapp), they should measure whether they get that elusive alpha of 5%-8%. Besides, is this alpha due to strategy return(Time weighted return) or market timing(Market return)? The discussion burst many myths and while might be known to the CFAs among us, informed the broader audience.
Anandh Sundar(@andy161161) introduced the Stalwarts Advisors checklist, populated with examples of Indian companies, and covered the first 20 points. The next meetings will see further discussion of these points. Discussions brought out the point that checklists often have success stories, failures and counter examples behind them, and one cannot blindly take them for gospel without seeing interdependencies.
- As homework for next session, please update the investment checklist discussed yesterday. 2nd tab is for collaborative checklist.
Value Investors Mumbai Planning - Google Sheets - Those seeking to volunteer please add your details in 1st tab of above sheet
- Those interested in being informed about future events by email, please sign up on the link below https://groups.google.com/forum/#!forum/valueinvestormumbai
20170319 - Deep Industries_vF-1.pdf (876.7 KB)
How to calculate Portfolio Performance.ppt (49 KB)
Performance Measurement.xls (32.5 KB)
Prem. Explosives.xlsx (51.1 KB)
Premier Explosives -R-24022017.pdf (211.1 KB)
Premier Explosives.pdf (510.8 KB)
Value Investors Mumbai Planning.xlsx (86.7 KB) This contains the checklist discussion in the 3rd tab