Bhupesh portfolio for my daughter

Q&A: Questions & Answers Portfolio Q&A
1

hi all valuepickers,

i have put a seed capital for my daughter starting today 30th june 2014 and put together the following stocks all capital has been deployed.

1… LAKHSMI MACHINES capital allocated 30% @ 3720

2… MIND TREE capital allocated 20% @ 880

3…UNICHEM LABS capital allocated 13% @ 223

4…ASHAPURA MINE capital allocated 12% @ 79.65

5… JUST DIAL capital allocated 9% @ 1447

6…MCX capital deployed 8% @ 610

7…TIDE WATER OIL capital deployed 8% @ 11265

The intention is to hold the performers over 10 years and let go the non performers if a surgery is needed for health of the portfolio.

i know it is one of the most exotic that would have come up on a esteemed forum like this but these are all high conviction buys and am reasonably confident that these would perform.

kindly provide your valuable insights will review it every 3 months to see how they are doing.

once again many thanks in anticipation looking forward to bouquets and brick bats in unequal measure :slight_smile:

2

It is very difficult to predict any company’s performance for 10 years. The only exceptions may be the top FMCGs like Colgate, HUL, Nestle and ITC. Most of the names mentioned by you do not fall in the “buy and forget” category. I my opinion you have to either change your time horizon, or your stocks.

3

Bhupesh,

This does not look good enough. You should have some comsumer and banking names here. Most of these do not have pricing power because there is no specialization. This is not a 20year hold portfolio.

4

If you review it every 3 months, then i feel you may continue with it but you have to be very active in monitoring the company performance.

5

thanks all i appreciate your inputs.

pankaj the intention is not buy and forget for 20 years i am a active investor trader.

ajit i provided seed capital of 15 lacs to my grown up daughter she is 24 and and further additions would be contributed by her from her own money.

i am preeeeeety much confident on laxmi and mind tree to out perform out of these so over weight on them for next 24 to 36 months.

the dark horse being tide water for a mouth watering book value of 4000 going forward split and bonus should accrue and mcx as a speculative buy because it has been beaten to pulp just on sentiment and a mere sentiment change can clock 50% gains in a jiffy.

unichem i bought on hitesh patel’s conviction … the only copy cat in my portfolio :slight_smile:

ashapura is a turn around story i expect 2 bagger from here in 15 months.

just dial is a niche area nascent business let’s wait and watch for few quarters and see if the fat lady sings.

6

Why you want to bet on small cap and mid cap companies.

Over a very long term > 20 years, the best business to own are large caps.

I am not against mid-cap buying, (I buy themselves myself) - But if you want to hold and forget companies for 20 years, in my opinion the best ones are the large cap consumer companies:

Nestle

P&G

GSK

ITC

Above will give you 20% return over long term. In 20 years your wealth would be multiplied by 100 times.

By just sipping into these companies one can make large amount of wealth WITHOUT much loss of capital.

Just my two cents.

2 Likes
7

dear somnath,

the idea for choosing mid caps is the base effect and capital appreciation rrather than steady 20...30 % returns.

for argument sake kingfisher air lines was a 3 bagger for me over 3 months as compared to larsen and page industries but then these are one off trades and can't be replicated over sustained periods of time.

the thinking is to ride the companies with clear growth and expansion for 36 months minium laksmi machines and mind tree in my case.

these can grow your capital by 80 to 100% per annum as i have observed by jumping in and out periodically.

considering others don't do as well as these the overall growth should be 30 to 40% if not more considering that we are in a secular bull market.

MARKET CAP (RS CR)
4,450.27
*P/E
24.23
*BOOK VALUE (RS)
852.34
DIV (%)
200.00%
MARKET LOT
1
INDUSTRY P/E
10.62
*EPS (TTM)
163.04
*P/C
15.55
*PRICE/BOOK
4.63
DIV YIELD.(%)
0.51%
FACE VALUE (RS)
10.00
DELIVERABLES (%)
69.43new
*Based on standalone numbers
    8

    and here are tide water oil’s numbers for crunching…

    agree with purists that the growth has slowed but then it can change going forward.

    how can one ignore 1500% dividend and huge book value of 4085

    MARKET CAP (RS CR)

    981.87

    *P/E

    14.37

    *BOOK VALUE (RS)

    4085.18

    DIV (%)

    1500.00%

    MARKET LOT

    1

    INDUSTRY P/E

    29.01

    *EPS (TTM)

    784.44

    *P/C

    12.73

    *PRICE/BOOK

    2.76

    DIV YIELD.(%)

    1.33%

    FACE value 10

    9

    Am I missing something here? How does 1500% dividend matter if the yield is only 1.33%? And what does the Book Value matter of 4085 matter, if the market price is 2.76 times that? And isn’t the Industry PE getting distorted by Castrol?

    1 Like
    10

    samir i am not a dividend yield investor am more after capital growth…

    the only two things you are over looking here are inspite of 1500% dividend and a hefty book value it still commands a measly market cap of less than a 1000 crores because of being not much liquid floating stock and many investors get put off when they see a share quoting in high four or five figures… size does matter !

    every thing said and done about trading @ 2.76 times the book value it grows your money steadily to the tune of 60 to 80% or you can choose the valuation traps @ steady 10 to 20% .

    how long can the bonus and split not accrue here ?

    the only exception that comes to mind immediately is MRF BUT THEN THE PRICE WOULD BE OBSCENE IF NOTHING HAPPENS.

    well i am hopeful so let’s see how it pans out over next two quarters.

    11

    this is for your eyes only …

    EICHER MOTORS LOOK @ ALL THE PARAMETERS YOU SCAN AND TELL ME AM I MISSING SOME THING HERE … THE DIVIDEND YIELD IS 0.35 %

    *P/E

    66.70

    *BOOK VALUE (RS)

    303.17

    DIV (%)

    300.00%

    MARKET LOT

    1

    INDUSTRY P/E

    167.48

    *EPS (TTM)

    128.98

    *P/C

    61.36

    *PRICE/BOOK

    28.38

    DIV YIELD.(%)

    0.35%

    12

    just a small re-jig % wise all the stocks remain the same…

    have increased weightage of MCX TO 20% DID NOT REALIZE RAKESH JHUNJHUNWALA WOULD FOLLOW ME SO SOON :wink: ADDED 12% MORE @ 690.

    THE 12% MORE HAS BEEN CARVED OUT BY REDUCING LAKSHMI MACHINES BY 7% …UNICHEM BY 3% AND ASHAPURA BY 2%.

    1… LAKHSMI MACHINES capital allocated NOW23% @ 3720 ( SOLD 7% @ 3885)

    2… MIND TREE capital allocated 20% @ 880

    3…MCX CAPITAL ALLOTED 20 % … 8% @ 610 + NOW12% @ 690

    4…ASHAPURA MINE capital allocated NOW 10% @ 79.65 (SOLD 2% @ 73.85)

    5…UNICHEM LABS capital allocated NOW 10% @ 223 (SOLD 3% @ 206)

    6… JUST DIAL capital allocated 9% @ 1447

    7…TIDE WATER OIL capital deployed 8% @ 11265

    EVERY THING ELSE REMAINS THE SAME CONVICTION WISE … NO CHANGE FOR 2 QUARTERS AT LEAST.

    13

    Any particular reason for buying a Ashapura Mine ??

    14

    I was told by a very smart investor that you should invest in companies “jisko koi hila nahi sakta.” If after the imposition of CTT, the restrictions on gold imports (which reduces demand for hedging and thus affects a major component of volumes on MCX), the NSEL scandal, the market share of MCX can still remain what it was before all these events - a sturdy 80%, then in my opinion it must have an extremely strong moat and by extension the ability to protect its ROCE!

    The company is available at a 3000 crore valuation when it has 1500 crore of cash on its books. It has 30%+ return ratios, negative working capital and significant degree of operating leverage with increasing volumes. To top it up, the commodity trading segment in India is highly under penetrated with only 1 commodity trading account for every 10 DEMAT accounts as compared to 1:1 ratio for developed markets. Banks, institutions and MF’s are not allowed to trade commodities. Further, like everywhere else, options trading is not allowed which forms 50% of volumes everywhere else. Hopefully, all this will change soon with regulations!

    Its a fantastic story and with a new promoter things can unravel with possibilities of rerating back to original PE’s of 18-23 which are in line with emerging market exchanges.

    15

    it is india’s largest mine owner and exporter of bentonite.

    among the top five global producers of bentonite with over 45 million tons of quality sodium and calcium bentonite reserves across the country. It has four decades of processing bentonite complemented by indigenous R&D, global technology and superior shipping & port infrastructure.

    The company has activation, milling and processing plants in several locations in India. It has a wholly owned subsidiary and office in the UAE.

    Since 1998,Ashapura Minechemdiversified into bauxite. Today it has large bauxite reserves. In 1999,AMCOL International Corporationacquired 20% stake in Ashapura Minechem Ltd. Ashapura now has access to AMCOL technology for various value-added bentonite products.Ashapurahas now mastered the art of producing value-added bentonite and bauxite based products for diverse applications, which in turn result in higher realization. To ensure sustained growth, the companyâs strategy is to add new minerals and value-added products to its portfolio and move closer to its global customers. Today, the company has interests inAntwerp, Azerbaijan, Brazil, Nigeria, Malaysia.

    it was being pitched to me informally by a company employee who is a mining consultant for over 6…7 months that the fortunes of the company are turning around being a patient listener and a good host believe you me a few beers go a long way :slight_smile:

    the negative is in the current budget duty was hiked from 10% to 20% and it is susceptible to regulatory hassels as some vested interests want a complete ban on mining.

    the company would show a marked improvement over next two quarters to keep the share price on upward trajectory.

    16

    U surely have a great info. if the consultant is advising but just for my knowledge … For mining/cement companies the revenue and profits is likely related to the price of produce in case of ashapura it is bauxite,bentonite due u think there prices are going to double in near future as only then will profits double…

    Because they have a very inconsistent revenues and Ebitda are impossible to define the growth path for next 2-3 yrs…

    17
    MARKET CAP (RS CR)
    641.52
    *P/E
    4.54
    *BOOK VALUE (RS)
    -36.19
    DIV (%)
    0.00%
    MARKET LOT
    1
    INDUSTRY P/E
    15.35
    *EPS (TTM)
    16.24
    *P/C
    3.65
    *PRICE/BOOK
    -
    DIV YIELD.(%)
    -%
    FACE VALUE (RS)2.
    *Based on standalone numbers
    i can only foresee share price doubling if had the answer to prices of bauxite or bentonite doubling i would be courted by traders from london metal exchange ;)
    though one thing is for sure that people with the knowledge and conviction have been constantly loading up since 40 levels and as per their conviction and understanding of how the mining and metals industry works it's a 7 bagger in 36 months means they see their investment @ 40 rupees grow to 300 rupees in 36 months it's p/e currently is 1/4th of industry p/e with consumption rising for ashapura's products it should improve drastically from next quarter.
      18

      The reason for uptick in sales is likely because of increase in mine production by allowing of mining in orissa and other states where there was a ban because of environment and political issues … but company has poor compliance as they dont have annual reports and other such publications available …

      Plus there is a seller of shares by Govt. of india and loading of shares is done by promoter group ** nse website

      I will be writing to NSE complaining them for poor compliance of the company … If you to do the same we can pressure them to comply and provide details as they hold more than 75% as promoter holding , therefore they might plan to delist the company with out giving arbitrage opportunity to play as they hold more than 85%(not sure, But shareholding reports it in nse website)…

      SRY if i bother you with questions as i prefer to do a though research before i buy its my hard money. I don’t invest in a copy book style need to know what i am buying . Plus price is irrelevant in short term if we dont know what happens next week with the company , me hpy to buy known companies which others are buying… than losing money as price and product both are equally imp.

      Thank u… i am learning from ur contributions … going by rate company should touch rate of rs.100 …Happy investing

      19

      Bhupesh Gupta ji:

      you should consider adding Jayant Agro Organics to the long term bucket…

      Jayant Agro Organics

      CMP: 122.5

      MCap: 185cr

      ROCE: 19.45%, ROE: 22.61%

      3yrs CAGR Sales: 21.49%

      3 yrs CAGR inNet Profits: 43.88%

      PE: 4.83 (March 2014)

      EV to Sales: 0.30

      EV to EBIDTA: 4.96

      7 yrs 588% increase in profits and 335% increase in sales

      Consolidated Sales/NP/dividend numbers.

      March 2007 Sales 462.49Cr Net Profit: 6.76Cr Div:1.25

      March 2008 Sales 605.96Cr Net Profit: 9.51Cr Div:1.25

      March 2009 Sales 875.86Cr Net Profit 7.49Cr Div: 1.25

      March 2010 Sales 904.01Cr Net Profit: 12.47Cr Div:1.50

      March 2011 Sales 1,175.26Cr Net Profit: 24.92Cr Div 1.75

      March 2012 Sales 1,832.26Cr Net Profit: 31.35Cr Div: 2.00

      March 2013 Sales 1,624Cr Net Profit: 36.24Cr Div: 2.25

      March 2014 Sales 1,550Cr NProfit: 39.75cr Div: 3/=

      Consistent dividend paying company since inception.(20 plusyrs)

      40% equity is Bonus capital.

      Promoter stake 65.2%

      Only 5244 shareholders…

      Jayant agro is Uniquely placed as India is the largest producer of castor crop in the world producing 75% of world`s production… Jayant Agro is the largest processor of castor oil and castor oil derivatives in India…

      Jayant also produces the world`s largest range of castor oil derivative… Jayant exports 90% of its sales and is a Govt recognized Star Trading House…(other well know star trading House(exporters with similar export sales) are: L&T, ITC, Arvind, Bajaj Auto, M&M, BHEL, Balkrishna Industries, IPCA, Biocon, HUL, Cipla) Jayant Agro is the cheapest Star trading house listed

      http://www.fieo.org/Indian-Trading-House-Information-Directory.php

      Jayant Agro is a Govt recognized… Dept of Industrial Science and technology - Research Oriented organization. Jayant agro Promoters “Udeshi`s” also own a US Patent for efficient production of Sebacic Acid (castor oil derivative)and its salts US Patent No: 6392074

      Castor oil and its derivatives are well established green chemicals and can replace crude oil in the chemical industry.castor oil derivatives are used for the preparation of 1000+ chemical intermediates to replace petroleum in chemical industry(IICT-hyderabad).

      Demand is greater than supply and speciality chemical manufacturer such as

      “Arkema” 7 billion Euro sales have tied up with jayant agro (JV: Arkema:24.9%, jayant 75.1% - Ihsedu AgroChem)

      http://www.bseindia.com/xml-data/corpfiling/AttachHis/Jayant_Agro_Organics_Ltd_111013.pdf

      Mitsui Chemicals & Itoh Oil: (JV:Jayant:50%, Mitsui:40%, ITOH OIL:10% - Vithal Polyol India Pvt Limited)

      to manufacture Green Plant based Polyol for Asian Automotive sector

      http://whatsup-indianstockideas.blogspot.in/2014/02/jayant-agro-organics-bio-polyol-plant-jv.html

      http://www.bseindia.com/xml-data/corpfiling/AttachHis/Jayant_Agro_Organics_Ltd_290813.pdf

      Even though Profits have increased 600% Stock Price of Jayant is still available at 6 yrs old prices with no appreciation…(In 6 yrs stock price has appreciated only 51%…no dilution of equity…promoters have increased stake by 10%)

      Well established Green Chemical Company… LOW Hanging Fruit Available for Investors… as Green Chemicals is a sunrise industry…

      Company: Investors section: http://www.jayantagro.com/investors.htm

      10yrs annual reports:

      http://whatsup-indianstockideas.blogspot.in/2010/05/jayant-agro-organics.html

      10 yrs quantitative data:

      http://www.quantspartner.com/Jayant%20Agro%20Org.pdf

      Castor Based Green Solvents: Industrial Green Chemical World 2013

      http://whatsup-indianstockideas.blogspot.in/2014/02/jayant-agro-castor-based-green-solvents.html

      BioBased Polyamides: India the Assured Supplier:

      http://whatsup-indianstockideas.blogspot.in/2013/12/jayant-agro-bio-based-polyamides-india.html

      =happy investing

      whatsup-indianstockideas

      20

      HiWhatsup Prahalad,

      I notice that you are putting same or very similar kind of info about Jayant Agro in multiple threads. While i appreciate your effort to track the company and provide us such valuable info, please try to avoid duplicating the same info across threads. Just a link or reference to the original thread should be enough, if you are trying to encourage someone to look into the company.

      Regards

      Raj