In case your growth projection rate of 18% is correct then there is 57%
margin of safety calculated on 15 PE. Dont calculate on 18 PE.
Your formula seems to be incorrect
Refer attached one
With Thanks & Best Regards
Varun Jain
Associate Architect
ARCOP
Mob - 09910507431
Off - 01126242050,
Alt email-ID -
Work - vjain@arcop.co.in
Copy of Intrinsic value calculation Aarti drugs 16 09 2015.xlsx (18.3 KB)
On a ligher note what inspires you in my portfolio. I always see a very
concentrated portfolio of about 10-12 stocks and to my surprise 70-80% of
stocks in almost all portfolio are same.
Sometimes I wonder whether I am correct
With Thanks & Best Regards
Varun Jain
Associate Architect
ARCOP
Mob - 09910507431
Off - 01126242050,
Alt email-ID -
Work - vjain@arcop.co.in
Hi Varun,
Axis Bank is a recent addition your portfolio any reason for giving it preference over HDFC bank.
Regards,
kapil
Varun…what is inspiring is your 150% return
Agreed Varun, Identifying stocks is only the first step.
My finance professor used to explain PF building this way -
The three pillars of building a portfolio would be
Like you have just said, most of us will have the same names so it is very hard to go wrong on the first step. Allocation strategies is where some portfolios perform better compared to the usual 15-20% compounders. The third step is not completely in our control is my opinion(though one should be careful not to overpay).
Thanks,
Ravi S
@ Kapil - As warren Buffet says we don’t want to overpay for cherry consensus, I see more upside in Axis bank than HDFC bank over long term - 5-10 yrs
@ Kalyan - Thankyou for compliments. A lot of this has to do with my buying aggressively in market corrections and holding stocks over long term. But this return is over 3.5 yrs almost so its ok. How much is yours if I can ask?
@ Ravi - Very well said. My only issue is developing an independent thinking and looking for various other stocks as there are lots of them hovering around with much better perspective and outlook. The idea of the forum is not to run a basket of Mutual funds whose top 10 holdings invariably looks same but to promote and develop stock selection process among readers and participants . Currently the situation reflects bias and less risk taking ability coming out of absence of self conviction on various other stocks. Herd mentality seems to be playing here. That said the discussion on various threads and presentations done are absolutely fantastic and give much insight into various investment techniques and stock stories.
Great performance n picks at such young age.Bright future awaits you.
Varun reasons for you exiting Syngene please.Whats your take on kaveri after recent downfall n reasons behind it?Why are you liking tat Elxsi.It listed way back in 1991 .why the price rise now?
@varvp14 My returns aren’t worth broadcasting in this great forum of wiz kids. But let me unmask it, since you had asked. Unrealised gain for a 15 - 18 month period used to be a respectable 60-70% but it has nose dived to a meagre 30% , after steep corrections everywhere but the killer nose dive in 2 of my key holdings - Page and Eicher plus not to mention the southern sojourn of Axis, Yes, Kitex, Ambika and of course big cuts in Repco - plus Gruh in standstill mode.
Vivek - First of all Thankyou
Two reasons I got of Syngene - firstly I already have 4 other pharma stocks crossing almost 24% of my portfolio - as a rule I follow that no sector should cross 25-30% exception being financials and consumers
Secondly Syngene at 350 to me seems to be pricing 3 yrs ahead of good growth so margin of safety was not there and I needed to raise cash levels to buy into Supreme Inds and Care ratings
Probably at 300 or so and when I have better cash availability I would dig into it again - I absolutely love the stock and wont advise you to sell it unless you find a much better opportunity
Tata Elxsi - I bought at 600 levels - missed at 230 odd when I first looked into -
1989 established- 25 yr old, Debt Free, 50.09 promoter share is ok, Avg ROCE of 52% is excellent, ROE of 36% is excellent, MCap < 1900 crores when invested, Theme - NICHE IT player in new technologies like Embedded product design, Industrial design (product design, branded graphics and user interface systems), VLC and systems integration, Providing software development and system design services for automotive and aerspace industry - connected cars with in vehicle infotainment, active safety systems, telematics, powertrain and hybrids as theme is a big theme, Also complete product development lifecycle from R & D to services in broadcast consumer electronics segment helping them reducing enginerring costs, Huge opportunities due to advent of Internet of things, recent addition as a core industry is healtcare with started working on medical electronics like patient monitering devices, diagnostic devices and theuraptic devices- huge growth potential, unified communications like video and audio conferencing, tele presence etc, also identified new areas like semi conductor and chip design, new theme going ahead is convergence of consumer, markets and electronics to be one of the biggest disruptive changes which will throw up lots of opportunities for Telx
Totally Agree Varun. 
Yesterday’s winners identified by our esteemed senior boarders are not going to continue to give the same quantum of returns for the next few years as most of these names(Ajanta, Mayur,etc) are well discovered and trade at lofty valuations(Ajanta, Mayur were discovered @ single digit PE when our boarders identified them).
It is important to come out of the comfort zone to think of what may work tomorrow. It’s easier said than done. In my own PF, 60% of the names are Valuepickr top picks.
Thanks,
Ravi S
your take on kaveri at cmp Varun?
Vivek - staing on with Tata Elxsi I will just reiterate that we are in living in an inflection point so as to say where in there would be lots and lots of disruptive changes which are going to take place in near future. Companies like Tata Elxsi are in suddenly finding themselves in sweet spot and inventing new avenues everyday for growing up thier business. There could be a lot of explosive growth going ahead and they are in right space. For such business conventional way of valuing them may not be right - they could take over lots of tech starts ups, medical industry may be a big game changer for them. So its a very very interesting space to be in. Sadly I have only 100 stocks now.
For the same reason I bought into KPIT and now looking into intellect design arena which is again in sweet spot in digital banking services which may now another big disruptive area.
Will react to Kaveri seeds by night - needs to go over this yr annual report first - my gut feel such a price damage is happened due to huge IDFC selling.
Kalyan - its ok to have 30% growth in a yr - if we can maintain it year to year that would be great performance. I just feel except for banking stocks mostly your stocks have very high valuations.
Update -
Added Care ratings in today’s fall and started nibbling into Havells India though only small position. Will look into next week if I can accommodate it in the portfolio after studying over weekend.
Getting to feel to add more in Delta Corp at current levels.
Markets and portfolio did well this week and both moved exactly in tandem and neck to neck with each other. Next week I guess should be a rough ride initially.
Food for thought -
Great investors and the history have taught us to buy into fear, greed and pessimism. There are few stocks available at throw away valuations and are run by good management with decent growth and financial metrics as well as long tenure. They are not going to run out of business and slight change in temporary setback might lift them to skies.
South Indian Bank
DB Corp
KPIT cummins
First Source Solutions
TV today network
Tata Motors
How many of you are buying them?
My Case for bullishness on Supreme Industries
Here is the Intrinsic value calculation of supreme industries - approximately - there is 20-40% margin of safety at current market price the way you look at it. However the FCF calculation shows Rs 400 as the value which is way below current market price. Anyways I have decided to load up on this business after reading past 3 yrs annual report and presentations and company’s new initiatives in building products and automotive segment. Its difficult to predict the future cash precisely flows in light of govt increase spending on infrastructure, economic growth and new products and plants coming up.
Being an Architect by profession I can vouch for it this company has a long way to go.
Invite readers reaction and criticismSupreme Industries Intrinsic value.xlsx (58.4 KB) on the same.
Currently working On Havels India in the same building infrastructure category.
DBcorp and care look very interesting wrt price now, but they have poor earnings visibility till atleast fy16 end ( May be even fy17 if Capex recovery and consumer sentiment did not pick up quickly)
So even though prices are fine now to enter, yet to decide…
Raj - Partly agree with your view. Care earnings should rebound in second half of calendar yr and its in such a niche business with so huge an opportunity size that one cannot ignore the likes of these business. You can either get good news or good prices and we are buying it for long term and looking at what is going to happen in FY16.
Varun - You are right about 70 to 80 % of your portfolio similar to others, interesting aspect is buying at low values with lot of MoS. Thanks for your reworking of Aarti drugs intrinsic value
varrun jain sir,your presentation is clean and crystal clear. I do expect all members to follow the siut.
I’ve been nibbling at KPIT and CARE, for precisely the same reasons as you mention above. These companies are going to stay and seem to have hit a temporary road hump, the former in terms of sentiment due to one bad quarter and the latter possibly in terms of Amtek Auto.
I’m a little mixed on Tata Motors because I have no way yet to determine whether or not their Chinese setback is temporary or is more of a structural change, with local Chinese models starting to take share. While premium branding of JLR remains, its hard at this point for me to determine whether that will restore market share in future, or will yield to local Chinese competition. Perhaps this stock needs a little bit more margin of safety.
