ValuePickr Forum

Hitesh portfolio

@alexander

While looking at volumes in small caps, it would be important to look at volumes during prior corrections. Usually on big breakout days, there is huge volume and even following few days, the volume is more than average. But when markets start correcting, volumes even in good companies dry up.

Idea should be to be choosy in the current frothy markets and try to catch small or midcaps which have sound fundamentals. Or if you like to get into kachra stocks, as they are called, there has to be definite exit plan. Idea should be to plan exit slightly before targets, or on days when there are big volumes.

It a tricky call playing poor quality names in current markets. Most names have started moving irrespective of fundamentals and hence we need to be focussing on companies wherein we can stay invested even if we are stuck because of whatever reason.

27 Likes

HI Hitesh,

Any views on Hemisphere Properties.
778 Acer of Land
Tata as promoter
Valued at 20,000 CRS
Current Market cap 4000 CRS
Professor Sanjay Bakshi Invested
Some litigation on Pune Land ( 560 Acer )

For details please give a look on a Value picker

I dont think Tata are promoters. Here 1st page say, govt of India’s enterprise.

1 Like

Hi Hiteshbhai,

I am curious to know what your learnings have been with regard to your basket bet approach in a particular sector.

Generally the sector leader(s) pops initially and the rest of the pack gains strength little later. As we saw in case of Sugar lately, where Balrampur being sectoral leader was first to pop and gained strength right in beginning of March and was almost a doubler in 3ish months. Triveni started gaining strength in middle of April and became a 3x. Dhampur started moving in end of April and was a 2x. Shree Renuka and Bajaj Hindusthan joined party late in May beginning but gave a blasting 3x in matter of only a month.

As it has been seen many times - the weaker players go out to give much higher returns than leaders, when they join the party. But I am talking about this from little and recent experience that I have.

As per your experience, has it been better to keep moving the proceeds from weak positions (stocks which are going down after the bet is initiated) to strong positions as the thesis is playing out OR just stay put until the end OR keep booking profits from stronger positions and move to weaker hoping that they would catch-up the sectoral move little later and would provide much higher returns than leader(s).

Thanks,
Amit

10 Likes

Hi Hitesh, How do you view Aegis Logistics with them moving away from the core LPG business to the JV with Volpak? Even though they own 51% of the shares in the JV company can we at this point of time weigh in the business growth/loss (in short uncertainty) brought in with the deal and them venturing into new avenues of LNG? Thanks!

1 Like

Hitesh Sir,

Seek your advise on the quant modelling - screener filter. I know you are not inclined into past number driven filters determining the choice of stocks. Rather it is the growth story and future outlook which you look for. I therefore, don’t seek feedback on individual scrips , rather some guidance on the over-arching theme and the filter . Do you see any major issue in the strategy.

Hi @hitesh2710 ,

In Israel there are concerns about the efficiency of Pfizer vaccine against the delta variant of covid-19. We don’t yet know the respective efficiency for other Vaccines. Even though, this is still an initial findings, but I think, virus is not likely to relent from creating new variants.

How do you see this as a risk to global equity and Indian equity.

Thanks!

1 Like

@rupaniamit

Few times I have tried successfully to play sectoral plays especially basket approach, I think the key learning has been to first get into the sector leader because that’s where you get the first moves. Once the trend has been established by sector leader/leaders, the second and then the third rung stocks do tend to follow.

I prefer to form a basket of a couple of sectoral leaders and one or two from second rung and one or two from third rung (so called kachra) companies. Allocation wise of course the first and second rung take up most space.

Even after observing multiple such sectoral rallies its difficult to gather courage to bet big on the laggards of the sector inspite of knowing that they are the ones that will deliver most returns. I had this knowledge before hand in sugar sector where I felt Renuka sugars was going to move the most but still because of some or the other reason I did not allocate enough and exited with 40% gains whereas I could have made a four bagger in quick time. Maybe it might take more time for me to refine this style of playing sectoral bets.

One thing we are not too sure about while playing these sectoral bets is how much each stock from within the sector is going to run. Unless we have some clear technical patterns where targets could be predicted. So moving from so called strong stocks to weaker stocks etc is something that I am not too comfortable.

@Vpayasam I dont track aegis.
@amishra I am not too much into pure quants. abhishek might be a better resource person.

18 Likes

@manoopatil

Most viral infections tend to have life cycles of their own. Usually the first couple of waves are of more severity and then the severity tends to peter off. Plus the preparedness of the authorities and the awareness of the general public (though one cannot predict the madness of crowds here too) is higher as newer waves keep coming.

Besides when markets are facing an unkown risk for the first time, the impact is maximum. We tend to overestimate (or underestimate as the case may be) the effects of the problem. Once we have gone through the effects of the problem we know what to expect and how to deal with the problems. Its the same with markets. Corona now is a known risk and markets know what to expect, so impact might not be as drastic as that seen in the aftermath of first wave.

13 Likes

@hitesh2710

first post here. mkt seems to be overheated. kachra stocks flying. pan-wala and others talking stocks. many signs of froth.
i was battered not exiting avg to good quality midcaps from 2017 crash. feeling anxious about - where we are in the cycle now. raised 15% cash in last trwo weeks. itching to make a complete exit. or move to laggard sectors - quality rail/power EPC companies, small pvt banks etc.
what are your thoughts on this? exit strategies (gradual ?) and when to kick those off.

1 Like

@mmd

Its a difficult call when to exit the markets. No one gets it consistently right. We have been hearing the noises about markets being overheated since nearly 3-4 months now and still they keep going up. So how long this party lasts is anybody’s guess.

If we are not comfortable I think a staggered selling approach can be taken… Sectoral rotations keep happening in the markets and we should stay alert for any sectoral rallies if and when they manifest and try to ride them, provided we are early enough to get decent returns.

5 Likes

Hitesh bhai. Are you looking at financial sector now. So much negative news around with NPAs. Most banks have beaten down and NBFCs are flattish over a year now. Is it too early in your opinion to venture in that sector or a turnaround can happen sooner?

Hitesh bhai,
In one of the posts on vst tiller thread in 2011, you had mentioned about stock screening criteria and methodology followed to assess potential prospects. Attached link VST Tillers and Tractors limited - #5 by hitesh2710

Would love to know how has it evolved over the years ?

1 Like

Hello @hitesh2710 Hitesh Sir,

I like your analysis and views on sectoral plays, for years i have thought of doing it, but i haven’t managed to build a system and screening for sectoral plays.

What is your process for sectoral plays? How do you visually identify if a sector is going to take-off? Is it fundamentals based, is it technicals based? Do you use some tools, or all of this is manual analysis? Is there any alert based mechanism that notifies the sectorial positioning and tipping points?

Thank you!

3 Likes

@hitesh2710 ibull real showing immense strength.is it combination of revival of real estate sector + impending merger of Blackstone in FY22?

merge entity could be best place for institutions to play this sector…what could be value of merge entity?

@ram1984

Some companies in the financial sector seem to offer interesting opportunities. I think some banks and NBFCs which will be least plagued by NPA issues would do well.

In some pockets I think the fear of NPAs are overdone. So that’s another place where there could be interesting bets.

I like smaller private sector banks, prefer larger private banks like icici bank and axis and some housing finance companies. I think going ahead, there could be leadership change in banking space with axis and icici outperforming traditional powerhouses hdfc bk and kotak. (this though is a personal opinion and more to do with the chart patterns)

13 Likes

@hbz

The screening process continues to evolve as time goes by. And it tends to evolve with market phases and fads.

Previously it was more based on historical numbers and predictability. Now we have a number of companies which have come up with promise of huge growth because of change of business scenarios. So we have to sometimes use our imagination to figure out the kind of growth companies can show.

One would never have imagined the kind of market fancy the platform companies enjoy these days. If we go by traditional yardsticks, it would be difficult to invest in them. So we have to keep evolving as investors and stockpickers according to changing times.

13 Likes

@prabhakarpandey

A big part of sectoral screening etc is covered in the 52 week high and all time high thread. Essentially it involves trying to figure out strong tailwinds for a particular sector and if the stock prices of companies in that particular sector start making fresh 52 week highs or all time highs, it enhances the conviction.

In the current markets, the sectoral shifts happen very quickly. Within a couple of months we come across strength shown in one or two sectors and there are strong rallies in stocks from those sectors. I think the current flavour seems to be real estate. And here there is a combination of stocks breaking out of multiyear consolidations plus strong disbelief among investors regarding prospects of the sector. This is a very potent combination.

When a lot of stocks from same sector start making bullish patterns like flags, cup and handles, breakout past 52 week highs and all time highs post strong basing patterns, etc we should focus on those sectors and try to dig deeper. And if fundamentals and technicals gel, then try and short list few companies from that sector for investment.

We have seen strong sectoral moves in steel, sugar, chemicals, speciality chemicals, pharma etc. Currently as mentioned before, real estate seems to be in favour. Another sector undergoing strong rallies is textiles. So one can keep looking out for opportunities.

Its rare to see such a strong bull market with so many opportunities to ride strong rallies in individual stocks and sectors. These kind of bull markets come once in a decade or once in a few years. A lot of people keep questioning the rally and are fearful of investing citing a possible crash. But markets refuse to oblige them and keep going up inspite of all odds.

Whenever such bull markets end, its always painful. But the kind of wealth created if the opportunities provided by these kind of bull markets is utilised optimally, is beyond imagination.

In one of the Whatsapp groups where I am present, there are a few guys who are obsessed with daily levels of SGX nifty and are always on the lookout for meltdowns and Black Fridays and Black Mondays and what nots. If one has that kind of mindset, then its difficult to make decent money inspite of strong bull markets. One has to first accept that this is a bull market and then move ahead. End of bull markets, like end of life is inevitable. But one cannot live the present day in fear of things we cannot forecast and predict.

68 Likes

@Anshan

I liked the concept of change in promoters in Indiabulls real estate and hence invested in it when it was around 75-80. The combination of an excellent chart with fundamentals in the form of change in promoters was every enticing. I think I had put up the chart of IBREL on 52 week high thread and target at that point of time was around 165 if we go by GMMA charts and 180 if we go by bar charts. Today it closed at 170 and there seems to be a lot of momentum. So it might make sense to keep riding with raised stops.

19 Likes

@hitesh2710 , Hitesh Sir, you are the best! If i would just listen and follow your commentary(which i do), thats all i need to succeed. A sincere Thank You!!!

1 Like