Original Message from @ankitgupta
Hi Vamsi,
For pharma companies - There are some fundamental changes happening in pharma companies especially the ones which have exposure to US markets coz of distribution changes as well as increasing competition. I am not sure what long term impact these challenges will have on the companies. However, these are pretty well run companies and have extremely good balance sheet and cash flows.
Since you have been a passive investor, would always suggest you to go through MF route (if you have a higher risk appetite - PMS) or stick to fundamentally long term cos like HDFC Banks, Asian Paints, FMCG cos where one doesnât have to worry about them even if one is not much active in the markets.
Hey @ankitgupta,
Thanks for your input on the Pharma Pack. Was able to get the sense of it from your other posts and specific threads. Would my understanding be correct in saying except for Shilpa, there is not clear visibility of growth (CAGR > 20%) for Alembic, Torrent and JB Chemicals in the next 2-3 years. Earnings visibility clearly missing?
I started investing in 2011 following Valuepickr, I couldnât focus in the last year due to personal and professional reasons. But going forward thatâs going to change back. MFâs have never been an option for me given the fact I was able to grow my portfolio consistently over the last 6 years (minus last 12 months) investing some hours per week. Will stay so!
I think the main problem you seem to be grappling with is what to do with the laggards in the portfolio. Mainly the pharma stocks.
Ideal thing to do would be to take a dispassionate view of the companies, their results in past 2-3 quarters and evaluate how things are going to pan out in next 1-2 years. Remember markets pay up only for growth. Unless growth comes back you will have only downside protection if the valuations are extremely attractive but it doesnt necessarily always open up upsides. Or at the most if the companies in question are quoting below liquidation value or intrinsic value or whatever we prefer to call it, the upside will emerge till the range where market feels that the existing anomaly is corrected.
Coming specifically to cos like Torrent, JB etc since they have remained range bound for long time, one might be lured into sticking with them in the hope that better times will come soon. But if I were you, I would consider the current correction as a godsent opportunity to rejig the portfolio and find out cos with good growth prospects and put them in the PF while getting rid of cos with bleak prospects in near to medium term.
So if you can figure out a few good cos to bet on, then it would be prudent to trim/get rid of pharma names and move into the newer more attractive bets.
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@hitesh2710 It is always a pleasure to hear from you! Thanks for taking time to have a look. I really enjoy reading your write-ups, always a lot to learn from.
Thatâs definitely the plan to get rid of the laggards and to move to more attractive options. Trying to cover up for the last 2-3 quarters reading a lot! In between, Learnt some hard lessons and paid huge opportunity cost by not selling stocks like Ajantha at Peaks and not loading up Can Fin after I missed the bonus issues.
Any specific pointers towards opportunities one should explore first? It would really help, as cutting through noise always takes the highest effort!
Hey! It will be nice if you can share any incremental portfolio changes over the past 3 years