Bikram's portfolio

Hi Everyone,
It’s a great opportunity to be part of this valuepickr forum. Let me briefly explain myself before sharing my portfolio. I am from non finance background and I have started learning about stock market from last one year and have started investing from last 7-8 month.

Earlier I used to search multibagger stock in youtube and after doing little bit analysis I used to buy stock. I was lucky that I invested when market was down in Feb-march and due to which I saved some capital . But I started getting interest in this field and I started searching some good website to learn .Luckily I found Valuepickr which helped me learnt a lot.I started with stock market basic thread and also used Investopedia and followed Vishal Kandelwal website as well as dr vijay mallik website . I also followed Capital allocation framework thread and it immensely helped me and while allocating portfolio I am trying to implement the learning.

I am very new into investing and my intention is not earn multifold return and I want to learn as much I can because my long term intention is to stay in this market for rest of my life. I want to analysis the company and their business model and their management and all the other important aspect like a pro hopefully within 2 year. Grateful to interact with some of the great investor over hear @hitesh2710 @Donald @ayushmit @Yogesh_s @dineshssairam @phreakv6 @bharat19 @basumallick @jitenp @suru27 etc . Particularly I would like to thank @hitesh2710 and @dineshssairam who has answered all my doubt and all the vp member are always supportive .

While building this portfolio I have tried adding stock from small cap , large cap as well as mid cap

Stock Name Allocated percentage Reason to buy
HDFC Bank 10% A no brainer co which will give decent return over a long period . indian economy has a long way to grow and indian banking system has a long run.
NESCO 10% Managed by conservative mangmnt and completion of new building will generate more revenue for the IT segment and their food and indabrator segment improving the performance
CCL Product 8% World’ largest instant coffee producer and their business strategy to do cost plus model is very good. The new expansion as well as entering slowly in B2C will definitely help the company to grow further.
Tata Global Beverage 3% A branded play with so many branded products and hopeful for starbucks story . A turnaround bet for me
Care Rating 8% The second big credit rating agency in india where this business has high entry barrier with huge cash flow . 2-3 player can grow more . Comparing to Crisil it is pretty cheap and also it will give good dividend.
Multibase 7% Comparing to the market cap they have huge market to grow with variety of product. It’s like 3M to me . Siloxane master batch as well as TPE has a huge range of application and with the strong parent co they can easily capture the market.
Ashok Leyland 3% Major CV player available at a pretty good valuation
Bajaj Finance 5% A Leading player in this segment with strong management growing a good pace . Waiting for a big correction to buy more .
Avanti feeds 6% Market leader in shrimp business with 45% market share ran by good management with good cash flow in balance sheet will give good upside once the shrimp business starts improving . have allocated 2% but will add more once it comes down .
Equitas Holding 3% I think a huge potential in Small finance banking sector and compared to their market there can be huge upside . will increase allocation after merger and demerger issue .
Mirza International 8% Co is available at a cheap valuation and there is huge demand for branded footwear . Company is in the process changing the whole business . A branded play with the brand Red Tape .
Sintex Plastic 2% This was one of my first purchase and tracking it closely and can sold if the co performance don’t improve in next 2 qtr.
Asian Paints 8% Again a great company but valuation is a concern but high quality company hardly fail. A good proxy play for real estate too as I don’t understand the real estate business much
Safari , Bata , Nocil,Ngl fine chem watch list Tracking Safari ,bata , Nocil and ngl fine chemical . Safari is expensive and can enter if valuation comes down . Good to see their improved performance in all the aspect.

Will increase the allocation for mirza , multibase and care rating if the story plays out nicely. I am currently buying hdfc bank , bajaj finance and Asian paint in SIP mode. I have meghmani organics and planning to exit and allocate the fund into care , multibase and other stock.

Requesting everyone to please suggest me how the portfolio looks like and you thought on stocks which I am holding .

Thank you so much for reading this long post.

Regards,
Bikram

3 Likes

Hi Bikram ,

You have chosen quality stocks. Most of the stocks are very well discussed on the forum. Saw your profile and the number of Posts and threads you have read. It reflects your eagerness to learn more and more and i am hopeful of your portfolio doing well on long run !
It is nice to see the clarity in thoughts and the clear reasons behind buying the companies.
Also like the process of increasing stakes in Mirza , Multibase and Care once the story plays out well.

  1. Nesco may remain sideways for some more time due to its expansion plans and required time to let out of recently build building 4 and earnings coming from it and therefore it will be necessary to remain patient. Though i feel the allocation is little on a higher side.

  2. Tata Global Beverage : Despite having great Brands like Tetley , Tata Tea , Himalayan Water which are widely seen in Markets , the company finds it tough to grow the Topline. Hope it turnarounds but i believe less in such stories.

  3. Multibase : I had some apprehensions regarding corporate governance as highlighted in this thread Multibase India Ltd

  4. Mirza International : Some governance issues and high payouts are concerns but company is aggressively trying to grow. Risks are associated and need to be tracked closely. The Bata 2.0 looks much better placed though expensive.

No idea about Care Rating , Ashok Leyland , Sintex Plastics

Disc: I hold HDFC Bank , Nesco , CCL , Bajaj Finance , Avanti , Asian Paints and Nocil from above set of stocks. Nocil is more of a Medium Term bet.
NGL Finechem , Bata and Equitas on watch list !

Regards
Bharat

5 Likes

Thank you Bharat for your kind words . Looking forward to learn more from you .
Regarding stock

  1. Nesco is an long term bet . As they are into expansion mode , it will be remain in side ways for some time . I have given 5% allocation till now and rest 5% I will add slowly if they fall more. As you have mentioned 10% is little higher , I will definitely consider this and if I get better opportunity somewhere else then I will reduce the allocation. The main purpose to buy this stock is to learn patience .I think these characteristics are the process of becoming good investor.
  2. Regarding Tata global beverage , I entered into this stock during the rich valuation as I had no idea about how to value a stock and it was my early picks. If top line doesn’t grow in next few qtr , I will exit from this stock. Thus Less allocation for this stock.
  3. Multibase : I am aware of their less spending in CSR activities and though they are not spending money in CapEx still they are not paying dividends. Will closely monitor your point . Just because of their products variety and a potential huge market I am in to this stock. I am ignoring the issue Which you have mentioned and felt these are small issue. Will see if these issues will hunt me or not . I felt sometimes we over analyse the stock and and say no to the good idea. I can be wrong and if it happens it will be good learning lesson :smile: . Same regarding Mirza and will closely monitor.

I am not much comfortable holding sintex and will take a call in next 2 qtr. Maximum16-17 stock I want to hold.

Regards,
Bikram

Major Negatives:

Mirza…

*High working capital days
*Poor sales growth
*Average RoE

Meaning, it will be tough for the company to grow it’s EPS.

Equitas Holdings
*Is in bad shape. Numbers are crying.

Sintex Industries
*Very low ROE… Beware.

Tata beverages
*Low RoE.
*Poor sales growth

*Have less info about CCL, but 8% seems like too much commitment.

*Care is a smart investment. Buy and forget.

*Multibase has only 500 crores of market cap it is too small to cover 7% of one’s portfolio. will give lot of instability volatility to the portfolio.

You need to reconsider the portfolio. Because when going gets tough, the stocks with such inherent weaknesses are going to be thrashed.

1 Like

Hi Bikram ,

We all are learning here from each other. Personally i like lot of boarders here for their humbleness and willingness to help newbies despite having good success in Markets. It is a great forum for collective learning.

Multibase has a strong parentage and good possibilities of newer products entering into Indian Markets. May do well on long run. I believe in having great conviction behind the stocks i own and a good allocation in them is a requirement for better returns. If one’s allocation is low and even if it goes on to become 5X-10X , it will not make a healthy impact on Portfolio.
The process of keeping a tracking position for some quarters and increasing allocation once convinced in the story may help you very well on long run.

You can look into Pharma , Agro-Chemical and IT Space too if you understand the business to diversify a little.
Here is a good read to understand Indian Agro Markets :
https://drive.google.com/file/d/1aJNIsxXg3IoENdrtVA9EYQSVH9vsCiEJ/view

Best Wishes
Bharat

2 Likes

Thank you @jamit05 for pointing out the negative .

Regarding Mirza , i am optimistic of their aggresive business strategy . I have done little scuttlebutt . Though it looks I have a higher allocation but currently i am buying in sip mode stocks like Asian paints ,HDFC bank and care rating . So the allocation will come down.

Equitas is improving qtr by qtr and the main reasons for investing is the large untapped market potential in the small finance banking space. Because of their diversified product segment i preferred it over UJIIVAN.

Regarding sptl as I have mentioned I am not much happy to hold and if their performance doesn’t improve in next 2 qtr I will take a decision. Though pretty less allocation.
Tata global is one of my turnaround bet and due to the variety of branded product I choosed the stock. Also due to Starbucks story. Hopefully sales growth will improve in next few qtr.

Thank you for pointing out instability point as co is just 500 cr . I have never thought of that aspect and I will try to reduce the allocation and increase if the story plays out .
Regards,
Bikram

Thank you so much. Will try to understand the business of pharma ,agro chemicals and IT space and try to diversified the portfolio.

I believe now it is not a good time to be ambitious about nbfc.

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Mirza is 8% of your pf. Such companies are a good gamble/turnarounds after they have consolidated, and numbers start improving. As of now it is falling.

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Hello Bikram

One suggestion would be

Spend some time studying some basic topics of Finance such as Time Value of Money, Accounting, Cash flows, Capital Budgeting etc
Most of the people in the field of Finance have gone through some rigorous study on these parts as a part of our coursework. Trust me, it will change your perspective.

There are plenty of books to chose from, my personal favourite based on my experience was this book ->

I would consider this learning as the best investment you can make right now if you are starting your investing career.

2 Likes

Amit ,

My portfolio’s total value is not very high . I am in process of buying all the stock in SIP mode due to less cash availablity. Will definitely increase the allocation for other stock and may buy new stock.So allocation will come down .

Hi prince,

Thank you for your suggestion . I have gone through some video tutorial for "how to read balance sheet " as well as went through some website.

I will definitely go through all these topics and try to learn more.

I think this is why I am here in this forum to learn and change my perspective towards the business , my thought process etc.

Proper guidance from senior member will definitely help me alot and I am always looking for new suggestion.

Regards,
Bikram

regarding Nesco, i expect good growth in top and bottom line over the next four to five quarters as IT building 4 gets rented out. usually stock price looks six months ahead, so re-rating could be possible from here. (i reserve to be wrong on this assessment, though). This is a steady compounder and unless one is aggressively churning the portfolio with high returns, such stocks should not be touched.

disclosure: decent holding for long.

1 Like

@Bikram11206178

Among the list of companies you have put up, I think two companies are not in sync with rest of the companies in terms of overall management quality namely mirza and sintex. Sintex creating value destruction in spite of great business is an example of how a poor quality management destroys value even in so called great businesses. They have been torch bearers on poor capital allocation and the results are there for everyone to see.

About Mirza I too was lured into buying it looking at the numbers of branded segment but after some time I realised that they were growing but growth was not a very profitable growth. And to compete against the likes of Bata and Nike, Asics, Reeboks etc is difficult. One can argue that they occupy a slot below some of these premium brands but still I think it might be difficult for them. They can keep growing but how profitable that growth is needs to be seen.

Among the rest of the companies, I think there are some good names where you can keep adding. Avanti has been an example to learn how to play cyclicals (often misunderstood as compounders). Its coming now to very interesting levels. Last quote I saw was a price of around 340-345. which provides market cap close to 4500 crores. Maybe a little bit of more correction and it would start looking interesting to track. I have been watching it since a long time but always felt that I would first like to see a good quarter or two before taking a call.

10 Likes

Hi Hitesh ji, admire your devotion and hard-work to help the fellow investors.

Thank you @Hitesh sir for valuable comment .Completely agree regarding how a bad management can destroy a really good business .They are in a really good business but management will always give excuse for their bad performance. It was my initial buying without doing much research on management quality.will exit if the co continue to post bad result in the next qtr.

Regarding Mirza, i think we need to give little more time to the management as they are in aggressive mode to capture market share .Their is a huge market for all the footwear branded segment as young Indian are after the brand. As you have mentioned “they were growing but not profitable growth” , i think it is due to the huge discount they are offering . but as per my analysis after Q2 result , they have increased the price of each product by 10% ,20 % , so it will be interesting to see their profit growth as well as revenue growth in coming qtr.

The learning from your overall statement according to me that “you should wait patiently and see the overall improvement of the co even if you like the company. once they start posting good result , the stock may run up little bit , but you will be assured that the co will post good result going forward”.

if possible can you give your views on RBL bank or any other private bank which you like ?
any amc or life insurance business do you like and you feel at reasonable valuation ?

There are so many ways to slice and dice portfolio building that there is NO ONE good answer that you will find. And, whatever answer you come up with will prove to be Partially Right and Partially Wrong as time progresses. So, it is always work in progress. I am giving you a portfolio building view point that does not say Tata Global is right or wrong, but that:

  1. Some ideas will test your discipline and patience, so make commitments to yourself and your portfolio of the holding time for each idea.
  2. Make sure you follow the FA and TA on each of the stocks as you add them, and before you add them, having a real reason why you are value SIPping into each idea.
  3. Never ever add the full amount in one shot. Give it a few months of gaps and not just few weeks.
  4. Always watch the idea from the Macro Perspective first. For example, if you add Amara Raja batteries, go back to your macro idea as being EV Batteries, and then when it dips 20% remind yourself that EV batteries have not happened, and hence I need to give more time, so I will do a SIP add now that it has come down, and discipline myself to hold it one more year. It is VERY hard to do this, but if you are waiting for 100% to 500% gain, it is this thinking of ‘sitting around’ that will get you the rocket ride instead of the ride on a scooter or a bicycle.
  5. Hold anything and everything with a view of 1 to 10 years. No one likes 10 years these days since their hands are on a ‘new idea buy signal’ or the finger on the ‘sell trigger’. Too easy to buy and sell since there are not certificates to pull from locker, sign them and then walk it over to the broker to sell. It gave an investor a lot of time to think thru, and now it is a matter of seconds. I even have a special keyboard to hit one button to buy and sell!!! I have not connected it up since it is a keyboard for ‘day traders and scalpers’.
  6. Finally, research, research and research…It is a constantly changing environment with new ideas and diversification is key.

KKP

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@kkpatel1924 thank you so much for your valuable advice which I will try to apply in my investing career and some of your advice I am already implementing.

I believe each investor have their own investment style and one needs to create their own investment style and an process. I am in my early stage of my investment career and I don’t want to be very much adventures with my approach.
Some of the key things I want to learn

  1. Patience to hold the stock for 5/10 year. I think patience is an key and to implement it is very difficult as you have rightly mentioned regarding the sell and buy option which is available to us and it takes 1 sec to execute the order.
  2. Discipline you have explained me nicely and I am trying to work on this part as sometimes we get fascinated by some ideas and we ignores the big risk which may impact us.
  3. Earlier I never thought of holding a stock for 5-10 year and thus never Analyze this part while buying the stock. But what ever I have bought right now ,most of them I have bought with a longer time horizon and I am doing a stress test if the company will perform good for another 7-8 year. I don’t want to buy an uncertain business idea with low risk where real value is present as per Monish pobrai because I am not good at valuing right now . I want to buy an predictable business where I know how much eps they are going to get in next year with a reasonable valuation and it should be an 5 year minimum hold ideas.

The reason for asking investor like you to review my portfolio is because to know

  1. if my portfolio allocation is balanced or not .
    2.To know if my portfolio contains more high beta stock which may damage my return in volatility.
  2. To know the important risk of the stock I hold . To be frank I am weak in analysing the risk and I am continuously learning this part.
  3. Regarding diversification , simply I don’t to buy any stock just because I want to diversify my portfolio. I will take my own time to learn the Industry , how their business model work, their macro’s and then analyse individual stock . That’s why I don’t have stock from lot of Industry where I have not analysed properly.

Looking forward lots of advice on how to become an successful investor from you .

Bikramji, you are very capable of doing these tasks, but it is a constantly changing world. Only after you put in real money into real investments and follow it closely will you learn the MOST.

So, continue refining your portfolio with better investments, without doing major trading here, and always give it longer than your patience holds. Sometimes it is best to walk away and not watch the market. It is also good to remind yourself of “The Why”. Why did you invest, and what is that macro picture that you were going to wait for.

When you have Sun Pharma like situation today or if you are in a Ricoh like situation, you will kick yourself, but that is part of the game. If you like some of your stocks to go from a cost of Rs10 to Rs1000, then you will have some stocks go from Rs70 to Rs10 also, and it WILL surprise you.

Be ready, Be balanced, Be Confident, Be Unemotional, Be Macro-minded etc.

All of the above is 1million times easier to type than carrying out for 1 day, let alone a lifetime. So, I know, and I have been through ‘walking on coals’ also, but that is part of the ‘journey’. It is not a destination, but a journey.

Good luck.

KKP

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Nice Observation! Hiteshji do you have any views on Sreeleathers? I have seen their stores around 20 years back in Kolkata and they used to be synonymous with quality, durability and I used to be surprised seing the demands in their stores. 20 years hence, the story is same, although I am not in Kolkata or in the city where they have stores but the rush in their stores have been same and their price points have been lowest with top quality. Also, the company scores well in many metrics against peers. Can it be a value buy for long term? I am not able to understand the quality of the management in terms of ethics, vision and ability hence not invested yet although tracking since its IPO. Thanks

1 Like