Vivek Gautam Portfolio


(Vivek Gautam) #1

My PF which was X in Nov 12 has become 2X recently. PF Size is slightly on the higher side.

It now comprises of

1)TCS @ 212,

  1. Kaveri [email protected] 299,

3)Astral [email protected] 164,

  1. Repco [email protected] 212,

  2. Shilpa Medicare @ 283,

  3. Mayur [email protected] 195.

Except for TCS which is nearly 25% now others are aproximately 8- 10-12% each

Besides

7)Aurobindo @ 287

  1. Page approx 6-7%@ 3700 each,

  2. Avanti Feed 4%,@375

  3. Ajanta Pharma 3%,@696

11)PI Ind 2-3% ,@244

12)Natco 2%@ 812 n

few recently BT with trading mindset like [email protected] 144 n L& T [email protected] 73.5 BT in OFS,.5 around 1% each.

Amongst recent activities was converting Bajaj [email protected] 240-256 into into Mayur [email protected] 260-300 & Yes Bank @ 350-/Indusind [email protected] 420 into Aurobindo [email protected] 260-300.

Also profit booking in Accelya Kale,Powergrid FPO,Just Dial IPO,Muthoot Finance & Mannapuram finance ,Symphony

Many Thanks for advice from this wonderful forum .

Views Invited


Sheetal Cool Products Limited
(surya kanth) #2

I Like your allocation to TCS. I was somehow in denial that IT would not up so far so fast. But Market won. But I think if NAMO happens large caps like TCS may not budge so much. But any way there is no harm.

You can shift 10% from TCS to Repco, Page, Mayur.

JustDial might a big miss for me. 35% margins is pretty low for an Internet company. I think Mani should be targeting 45-50% Margins in next 3-4 yrs. But Somehow I don’t understand the PE Ratios of Internet companies!!!


(hemant gupta) #3

Hi Vivek,

Portfolio stock selection seems good. Most of them are bull market leaders and should continue to make new highs and get more and more expensive. Namo govt at centre with majority could cause a knee jerk reaction in exporters like IT and pharma but that would be a buy opportunity as there is a strong underlying story there and they would continue to lead this bull market. I am not too sure of a 25% allocation to TCS. From 4 lac crore market cap I don’t see it becoming 5-10 times in 10 years.


#4

Dear Vivek:

I find your portfoilio interesting. Can you advice what is your target portfolio.

Some stocks like PI, Avanti and others have low allocation but have good prospects.

Do you plan to gradually increase allocation there by reducing somewhere else?

Please advice


(Vivek Gautam) #5

Ritul,

I generally average as a rule on the upside. I also have a weak point of not buying in 1 shot .

Also these are initial position.

I generally look for following combinations while investing

  1. Ethical promoter with good execution track record

  2. Good size of opportunity

  3. Good ROCE

I also look for any moat enjoyed by co but this n other aspects are automatically taken care if ROCE is good.

If the above combination is there we should follow the maxim Buy Right n Sit Tight. The stocks will become compounding machine or note chapne ko machine IMHO.


(Raj) #6

feel this should be the key for any investor. Generally there is bias in the reverse way when the upward movement starts.


(Sourabh Agarwal) #7

I follow a similar investing style of averaging as the price goes up .
Another similarity is the amount of allocation in IT stocks .I have around 40 pc of my stocks allocated in IT stocks and as the holding period has been very long status quo and anchoring bias has crept in .But I am seriously giving a thought to reduce the percentage allocation in IT stocks and allocate more in cyclical stocks .

As hemant pointed out that the chances of TCS becoming 10 times in 10 years is very less and there are many other opportunities which can have that result

Cheers


(Vivek Gautam) #8

One valuable lesson I learnt from BM n also here on VP was the allocation part. The return zooms once you start following it. In Oct 12 I had nearly 50 stocks . I pruned it to 15 odd in Nov12 n returns started improving automatically. You automatically let go of your weak stocks n start building more positions in the winning ones.


(Vivek Gautam) #9

Also keep investing in good FPOs / IPOs / OFS using LAS money whenever opportunity arises.these act as good booster for your portfolio.

One can have multiple demat accounts in the name of your HUF, minor children, siblings,parents.

I earned nearly 20 K per 2 lac application in 1 month in Powerfgrid FPO while the intt cost was around 1 K only. Similar amount I am earning in EIL FPO which closed on 12 Feb. Just dial Repco NTPc NmDC n lot of other OFS gave similar trading opportunities.

In OFS one can bet big amount also. I have been allotted a good chunk in L&T fin OFS.

Any views on PSU ETF fund offer which is closing on 21 March 13 which cud be a good contrarian bet due

  1. discount of 5% given immly

  2. Loyalty bonus of 6.1% if units hel for 1 year.

  3. Div yield of 3-4%

Together risk free returns of 15% odd in 1 year with upside due to

  1. low valuation of stocks in etf of around 9-10

  2. high chances of rerating on expectation n eventual change in govt

  3. diesel price being regularly increased n subsidy on this count may disappear by June 14

  4. limited fund offering of 3000 cr include retail portion of 700 odd crore which mat give good listing gain.

  5. Big a participation by anchor investors to the tune of 800 cr by Anchor investors.

Views Invited


(Vivek Gautam) #10
  1. IMHO TCS n other IT cos should be treated as global cos catering to global economy of 70 trillion USD hence 4 lakh crore mktcap becomes irrelevant.

  2. Hence opp size n ROCE remains good so stay invested

  3. Indian IT is a play on vast n cheap pool of Indian technical manpower n demographic dividend which will remain strong for several more years.

  4. highly ethical promoters with superb execution track record

  5. College education still very cheap in India compared to almost Rs 2-3 crore required to pursue same course abroad.

  6. lot of levers like variable salary n low availability of jobs in other sector makes it pertinent to be a shareholder of IT co rather then an over stretchy IT employee . LOL

  7. asset light knowledge intensive business a favourite of FIIs

  8. low rentals . One can hv commercial rental @40 Rs/ sq ft for 8-9 years easily

  9. Currency tailwinds expected to remain strong in India due to high import of Oil, Gold, electronic gadgets, virtual all manufactured products n RBI action to let remain Indian exports competitive.


#11

I think investing in PSU ETF is not a good idea. One might consider if we get additional tax breaks under RGESS. I’m not averse to holding PSUs and I own PFC (over 54% return plus 8% dividend yield; Mr Market will realize over time that some PSUs are unduly undervalued) & NMDC but I feel the PF construction is not good enough with cyclical heavy.

5% discount becomes irrelevant as market may give opportunity. Why is some investable PSUs IMO like Power Grid, SbI or NMDC out of the PF? I don’t think there will be big arbitrage opportunity after listing due to liquidity and 1 year loyalty bonus.


(Vivek Gautam) #12

My PF has increased by 10% since last posting. Avanti feeds has risen nicely n so have some other stocks .

Have exited EIL at 220 after entering in at 144 on Feb 12 through FPO n funds were obtained through LAS.

Have also bt Goldman Sachs CPSE ETF @ 17.45 in March 21 n its currently ruling at 19.4.Intend to hold for another 1 year as 6.6% loyalty bonus n 4% div yields is expected. This 10% will take care of the intt cost for LAS for next 1 year n it will become long term capital gain. Any rerating of PSUs with Modi coming in is expected to be the icing on the cake. Funds were again obtained thru LAS.

Anybody tracking Premco Global ?


(Vivek Gautam) #13

HAd also bought Mayur recently CUm Bonus around 460 to 517. Westbridge entry helped in rerating.


(surya kanth) #14

I am also planning to take Mayur to 15-20%. If they can increase margins also the ride will be excellent.


(Vivek Gautam) #15

Surya,

Mayur is a lovely stock discovered after a painstaking research n visit by Nagbrahma,Donald,Hitesh & Ayush who will vouch for it.

SK Poddar is a rare breed of business man who still puts in 16 hours of work at the age of 67,has a great execution track record,opportunity size was large for PVC & has now become larger after PU foray,minimal equity dilution,land already bought for PU plant,5th to 6th line expansion under execution n result will reflect in March 15.

Valuation still OK at 14-15 PE on FY 16 basis which is good for such a high ROCE ( 40%)-stock ,with Moat ,with full pricing power .Indias no 1 artificial leather manufacturer way ahead of competition with a big opportunity size staring at it.

I have always converted my laggards into Mayur over last 2-3 years & it has never let me down.No wonder Westbridge has taken a 11% stake in it like their other valuable pick Astral Poly.These ex Sequoia people have a stellar reputation & hold stocks for long term.Now Mayur visibility will increase & also liquidity will increase post bonus issue.

If price falls to 275-80 post bonus issue an excellent opportunity to load it up.


(Vivek Gautam) #16

CPSE ETF has provided good return with NAV hovering around 23-24 against a issue price of 17.45 on 21 March 2014.

Did any body subscribed to the etf ?

Views invited on prospects for this GS promoted ETF?


(Vivek Gautam) #17

PF is now 2.8 X from Nov 12 levels. All thanks to this wonderful forum and sharing with like minded friends.

I am continuing to hold on to most of my scrips.The major addition has been PFS recently which is now approx 4-5% of my PF @ 25.

This co too is on the cusp of major growth as it has adequate capital adequacy & can raise its loan book to 20,000 cr without diluting its equity ,sector tail winds,zero NPA,pvt sector management,reasonable valuation,good div yield,

I also booked profit in Wonderla,Vardhaman textiles which were non core trading bets

CPSE ETF has given excellent returns.I am surprised no one showed interest inspite of 90% firm allotment @ 17.45 & price now hovering around 27 rs has given great returns in 3-4 months.I am holding on to it as I will get assured 6.1% more units as loyalty bonus n 4% dividend.


(Jagadish) #18

Hi Vivek,

Are you investing/investigating on Cupid Ltd? If so, do you have Annual report for 2013-2014? I tried to download from BSE and Company’s website but unsuccessful.

What is your opinion on this company? The screener.in shows favourable indications for the investment.

Thanks,

Jagadish


(Vivek Gautam) #19

Jagadish,

Not much idea on this stock.


(Rajeev Jawahar) #20

Hi Jagadish, Gautam

Cupid to me seems quite an interesting bet as the focus has clearly shifted from low margin Govt. supplies to exports, where the margins are much better. The last 2 quarters already reflect this change.The products are approved by bodies like USFDA & WHO, so quality is not an issue.The Co. has recently introduced female condoms. It is only the second Co. world wide to manufacture this & could be a potential game changer.This near debt free Co. is sitting on large export orders for both female & male condoms.Based on the last 2 qtrs, the Co. could do Sales, EBIT & PAT of about 40Crs, 8Crs. & 6Crs. for 2014-15, giving an EPS of about 5.3 for the full year. This would result in more than acceptable return ratios. Have recently invested in the Co. after Q1 results.

Regards,

Rajeev