I have been a silent learner of valuepickr since past 1.5 year. I am putting up my portfolio for comments from senior members.
Portfolio Value > rs. 50 lacs
Mahindra and Mahindra Finance
Repco Home Finance
)- In my view, each stock is a high probable 20-25% compounder.
)- My cost price is around 30-50% lower than CMP for most stocks.
)- I keep adding around 15-20% of portfolio value from savings each year.
)- My equity portfolio is around 80% of my networth
A good friend and a senior investor had introduced me to TED earlier some 3 years back and then valuepickr 1.5 year back, and initially coached me into investing. Have been investing in mostly above companies since then.
I typically trade a bit in these stocks only â eg. sold half of Gruh earlier at 240 and HDFC Bank at 700 and then bought back at 195 and 630). This way I hope to increase returns from 25% to 30-35%.
I invest fresh cash when these companies fall by 20-25% in prices and I donât see any fundamental change in business (like HDFC Bank around 600 in last 1 year, Gruh at 180, M&M Finance around 220 etc.).
Look forward to your comments.
Welcome to ValuePickr!
Though your portfolio is pretty good I would like to take the liberty to point out a few things:
1> The portfolio is heavy on financials:NBFCs,Banks.All stocks are good but they occupy way too much (58%) of your portfolio.
2> The portfolio totally lacks Pharma.Maybe you can sell some part of your financial holdings & add to Ajanta,Alembic P.,etc.The threads on the stocks(and others) are availaible on the site.Thanks to the market correction,you have a good buying opportunity.
3> In your 11% holdings,all are large-caps or rather identified stories.You can look to add a mid-,small- cap to that list.Kajaria,Cera,Astral…all fit the bill.You can choose based on your conviction levels.
These little adjustments should increase the probability of your getting a 25-30% return.I am sure you will get some good advice on these and other aspects from Seniors.
1). Wow, I never saw the sector concentration. Yup, you are right, but i like all these companies. Good thing is financials are pretty volatile, so I sell partly when they are up and buy later when they are at cheaper valuations.
2). I really tried to understand pharma over last 1 year, by reading all the threads on valuepickr and annual reports, but just could not get intuitive understanding of the same. Plus looking at the fall in workhardt and ranbaxy, i feel i will always be dependent on other people’s analysis for my decision on a pharma stock.
3). Yup thats the case, but my portfolio size is decent + large part of my net worth, so i want stability even at the cost of slightly lower return. Astral, Cera etc. are good stories but lack enough moat for higher weightage. Plus I am not a full time investor so can’t track these on regular basis.
Thanks for the views. Appreciate it.
One thing i missed earlier was to give due appreciation to guys whom i coattailed. Almost all stocks are from other investors, which i developed my own conviction over period of time.
Page, HDFC Bank, HDFC are from TED days.
M&M Finance, Gruh Finance and IndusInd Bank are from a good friend.
Repco Home was an IPO which I liked.
Kajaria and Astral I picked from Hitesh’s picks on valuepickr.
Dabur and Cera I saw in the market, studied and picked ! Plus read analysis on Cera on a blog when it was Rs. 200 and invested…
If you can avoid regrets if the stocks become multibaggers,its absolutely OK to not increase allocation to Cera,Astral,etc.(on the other hand,they may not become multibag.)
The Pharma space has been a great wealth creator over the years.More importantly,since companies like Lupin,Sun Pharma,Cipla,Dr. Reddys have placed India & themselves on the global map,the sector warrants attention.But you make a good point:if you don’t understand the biz,don’t buy it.
Your portfolio also lacks IT…a company like TCS can be a steady compunder.Autos are absent…Bajaj Auto,M&M.Or auto ancillary: MRF,Amara Raja,Motherson,etc should also do well in the long run.What I am emphasizing is that you should diversify your portfolio a bit more than financials.
Then you can also look at speciality stocks: VA Tech Wabag,PI Ind(great thread availaible on ValuePickr)
Thanks Sagar for your views.
Hitesh Bhai/ Hemant Bhai, could you please also give your views.
I think with the kind of stocks selected u dont need much tinkering around.
Should provide decent returns.
Congrats on your good portfolio. I like your strategy of playing in more or less the set of stocks that you have developed conviction about. It seems to be paying back well and (I guess) you spend less time searching for new ideas and more time doing what you want to do
Question - what criteria/indicators do you use to figure out when to sell? I use technical indicators (learnt from Bala/Hemant/Tony) but would like to know your thought process.
There is a beautiful thread on TED**Why not to look for new ideas a always?**
One can a lot of ideas from it.
Thanks Hitesh Bhai.
HG, i dont know technicals so dont use that. What I was told is fair value of a stock is a broad range of valuations, so I buy and reduce based on that. So example, expected book value of IndusInd Bank for FY 2014 is around Rs. 160. Applying minimum 2.5 P/B, we get 400 fair value and maximum 3.25 P/B, we get 520. so i buy more around 400, and reduce around 520. Similar range for HDFC bank is 550 - 750, 220-300 for M&M Fin, 160-220 for Gruh etc.
Thanks for the reply. So how do one figure out these multipliers? I mean, why 2.5 and 3.25 in the example above?
Also, I guess it would be different for different sectors and stocks.
HG, yes this is the difficult part, hence i still take advise on this.
but broadly, first step is to look at longer term growth rates, ROE, FCF, dividend payout, operating history, risks factors etc and rationally think about a range.
follow up that with looking at historical range of the company. Divide 52 week high and low with EPS or BV to get the ranges over past 5-7 years. also, just check latest gruh finance annual report, they have given price to value ratio for past 10 years !
and yes, it will vary for sectors and companies.
Thanks for the pointers, Ash!
Updating the portfolio after a while -
Repco Home Finance
Mahindra and Mahindra Finance
A bit of change - Had consolidated Gruh finance into Repco Home - as both were near similar levels while repco offered greater upside
replaced hdfc with kaveri seeds - after studying the great work done on this
Planning to book some profits and build cash across most stocks after the huge run up. most stocks now seem fully valued and would be nice to get into 15-20% cash.
Good portfolio. How has been the performance for last 1& 2 years?
What’s your take on banks in general & specially Indusind bank ?
The banks haven’t moved any where . What’s your take on evergreening in banks n are private banks also surreptitious ly indulging in it?
CV financing comprises a big chunk of indusind portfolio . Is the cv segment experiencing a slowdown n how will indusind be impacted due to it?
Nice way of portfolio allocation. Made me sit up and think on my way of doing things. Nice Stock selection (I own almost all of them).
Just guessingwhich stocks you plan to book profits into? Page is really stock to hold for next 5-6 years. Cera seems to be in same category though they might correctwith Market.There is hardly any runup in banks.With respect toKaveri , there is some appriciation but the run seems to have just started.
That leaves Repco,MMFL ,Dabur, Kajaria for profit booking.
Do you share the same thoughts?
thanks Vivek. return over past 2 years has been 35-40% cagr.
banks have issues in general, that’s why bought banks which i consider having best quality assets.they haven’t gone up this year, but made good money last year. about cv, mgmt is good, they will manage it. look at sundaram finance, same thing but they are doing it.
nani, will be booking profits across at cmp - stocks are good but fully valued (inc. page, kajaria, cera, astral). will book some in hdfc bank and indusind bank on bounces. kaveri is a new position so will wait for a while and see.