Hello Hitesh Ji,
Do you invest in US stocks(not via any ETFs)? What all portals do you refer to study the ecosystem? Any portals in the lines of valuepikr?
Hello Hitesh Ji,
Thank you Hitesh bhai for your valuable time and knowledge. Thanks for clarifying. Got to learn here in this case the difference between a Swing top and a Major top.
Hello hitesh sir ,
What is your view on Relaxo footwear for long term ? If you tracking relaxo then please give your view
Considering your Techno funda model and the concept of capital protection, where you tend to exit the stocks when you feel its extremely overvalued or sector loosing sheen etc, are there any stocks in your portfolio which you would never sell for some reasons ? Also do you have 2 portfolios one for long term investment and another for short term, and sell off stocks from short term PF, when you feel temporary story is over, whereas, retaining the same stock in long term PF.
Hi Hitesh bhai,
Astral poly core business is doing well and also entering sanitary business and the adhesive business that it entered into also seems doing fine. What’s your view on it’s current valuations considering growth prospects if one wants to invest in it ?
Thanks so much for always providing valuable insights through your posts
These days I have only one portfolio of stocks and thats aligned to techno funda or momentum investing. Its worked out quite well since past many months and as long as it keeps working for me, and as long as I feel comfortable with this style, I dont see the need to change it.
Once you start practicing a certain style of investing and are comfortable and successful at it, its often difficult to practice different styles of investing in same portfolio. I have seen guys have a core and satellite portfolio but I have found that its not my cup of tea.
In the techno funda style too there are certain long term picks which can be held for long periods of time. A recent buy in my portfolio has been M&M finance. Its a sort of unlock trade. Idea here is to look for companies with good business model and good management which was severely affected by Covid. And now with Covid receding (hopefully) these are the very companies which would start coming out of the woods and show good business momentum.
MM fin was affected severely by Covid second wave and had to make big provisions in first quarter because of NPA norms. In q1 concall management was quite confident of reversing these provisions going ahead. And that’s exactly how it has played out in q2. With reversal of provisions, the numbers reported for q2 appear very good. This reversal of provision should progress into next 2-3 quarters as well though to a lesser degree. With improvement of asset quality coming through, next target for management should be to focus on AUM growth and that is expected to be seen in FY 23.
Reading and researching MM Fin has been a great experience in looking at turnarounds in the financials. First all the information needed is out there with presentations, annual reports etc. Plus the management in its concalls tends to spell out the oncoming scenario quite well and its easy to visualise how they plan to go ahead.
@hitusohi1 I dont track relaxo closely but for long term compounding it remains a good bet.
@A_shah I dont track astral poly.
Hitesh bhai - How do you manage knowledge? Do you keep notes for different stocks on paper, xls sheets or some other tools. I know it is subjective but one needs a solid process to keep running notes of various companies for years. Of course one can always come back to VP threads but we all need our own little repository.
PS: Apologies I didn’t scan through all your posts to find if you already shared something in this area.
I have been also doing momentum investing. And it has covered my losses of 2018-2020 and now has significant short term tax gain. For a while, this is a good tax-efficient method as it covers the short term loss in the previous years. I am thinking about holding stocks for more than a year as tax outflow becomes significant. This is mainly because I have an investor mindset and has never done short term trading. Are you concerned about the tax angle or are you just not bothered about it? Would like to know about your views.
I keep an xl sheet of all my chart readings and keep updating the sheet as and when I find new things to add. Each entry has few details like company name, current price, kind of pattern/formation i see at that point fo time and potential targets. This is a big list as I keep looking at charts off and on, whenever I find myself in the zone. I keep this list for around 3 months to see how things play out because I mostly look at charts with daily or weekly patterns. Some of them ultimately turn into long term structural uptrend charts which keep repeating in the sheet due to one or the other reason. And I keep checking these charts off and on to see how things have played out.
Regarding fundamental analysis, since a long time I have been in the habit of writing out a short investment thesis on the company I look at. And keep adding new things as and when new developments/data points come through. Some of these write ups are forgotten once I exit positions and do not track for a long time. Rest I keep updated.
Plus I store research reports/annual reports/concall transcripts etc in various folders in my laptop or in my pendrive so that I can retrieve them whenever I want to, and its easy to access. And whenever I am interested in a company I make it a point to read about it on VP on the relevant thread.
About the rest of the companies, I do keep track of most companies I come across and try to atleast know what the company does. These days though, I get quite a few queries about companies of which I have never heard before. Says something about the kind of times and markets we are in.
Momentum investing does entail paying significant taxes. Since past few quarters, I have had to take out some money from my portfolio and be ready for advance tax payments. I have made it a point to pay taxes by withdrawing from the portfolio itself. I consider it as part of investment expense.
And the levying of taxes on long term capital gains has sort of removed the inhibitions I had earlier about holding stocks for too long in the hope of avoiding taxes. Difference between short term and long term capital gains taxes is only 5% and I think if I can maximise my profits through momentum investing, I am ready to shell out that extra 5% as well. (there is also surcharge on these taxes which also hurts, but that’s par for the course.)
I am usually not bothered about paying taxes on capital gains because that is something that cannot be avoided. But planning to get the money ready by the date to pay advance taxes needs some planning and I now start planning on raising some funds from my portfolio right from the 1st of the month when the last date to pay taxes is 15th.
Great set of numbers from Schaeffler. Do you think this one needs a close examination? seems likely to be in a cusp of some fundamental change
Schaeffler India has been showing very good consistent numbers since 4 quarters in a row now. Sep 21 quarter has been the best till date in terms of sales and profitability.
Coming to different segments, I think auto could surprise going ahead. As of now there is concern about chip shortage but over time this too should get resolved. And auto aftermarket is the segment where the management seems to be having strong commentary. Industrial segment seems to be picking up. The only place not going well is railways but there too it is a matter of time before orders start flowing in.
On a fixed asset base of around 900-1000 crores, management is guiding for a capex of nearly 1000 crores over next 3 years. That says something about the bullish stance of the company.
From interaction with an employee with whom I interact regularly, I get the feel that company is on a strong wicket and can be a great story for next 2-3 years.
The parent in its presentation mentions E mobility and auto aftermarket as strong growth drivers. Attaching the presentation of q2 fy 21 (June 21, as Schaefller AG has Dec ending year) .
I remain bullish on the company and am invested in it.
Hello hitesh bhai,
Looking at the current valuation what is your view for delta corp ?
If you keep an track on delta corp please share your view
Sir do you track , Timken India . which is from the Same industry.
Why it’s richly valued as compared to Schaeffler ?
Any business moat it holds over Schaeffler and SKF ?
Hitesh Bhai thank you for the response. A follow up question regarding what are your thoughts on Schaeffler’s valuations?
In general, how would we value a company that is trading at 40 times earnings but growing well?
Is it okay to ignore valuations when the company is growing fast and is expected to continue growing in the future too?
In your opinion, what are the risks involved in such cases? And if things start going south for some reason, would you consider using a stop loss, in a case where you anticipated growth but the growth did not come through for some unforeseen reason?
The other risk management strategy one can use in such cases is that of diversifying. Or would you still consider a concentrated approach, perhaps averaging up over every quarter?
Hi Hitesh sir,
What are your long term views on companies such as Zomato, Nykaa, Paytm?
From what I understand, the entire hope is on value creation by scaling leveraging technology.
What I cannot understand is why profits is not a priority for these companies? Is it just a game of exiting the party while the music is still going on?
Good companies from bearings sector like Schaeffler, SKF, Timken etc have been perceived by markets as companies with some amount of moats. This is because bearings, though small in size can have a major impact on the functioning of the finished product and hence customers would not like to compromise on the quality while procuring bearings. And all the above named companies are having strong parentage from global leaders in the sector.
Coming to risks, basically it is related to the downturns in user industries. Autos, industrials, wind sector, railways just to name a few.
Personally for me because I find it easy to track Schaeffler, I have bought it and not a basket of stocks in the sector.
Stop loss for me would be continuous closing below 6000 because that was the breakout level. Previous major top was in 2017 at around 6000. Usually when stock breakout from such tops and there is industry tailwinds and results do come in as expected, its prudent to keep riding or even adding to the position.
@Aniesh7 I do not track Timken too closely, but you may look at the percentage of revenues from each user industry and try to figure out disparity in valuations.
@hitusohi1 I dont track delta corp.
@paramjeetsingh I usually avoid these new IPOs so not tracking any of these. I find plenty of other better understandable opportunities.
Hi Hitesh Sir,
Thank you so much for sharing your knowledge and wisdom with us, it helps us a lot.
Do you track Pix transmission and what are your views on this one?
This company has been performing well and given that there is huge Capex in the pipeline and trading at attractive valuations, there is a chance that it could get rerated.
For learning purposes I have got two quires.
Q1. This is about Schaeffler. You said you have put the SL as 6000/. My doubt is, if one is sure about the prospects of the company shouldn’t we buy more when it becomes cheaper? If bought @6000/- that is almost 25% return to the CMP.
Q2. It is about KRBL. It broke out of the flag pattern @324 however due to the recent market turbulence it changed its direction and went below the lower band of the flag which is @300. Even CMP is below that level. How do we play this pattern? In general, for any stock, since it is going down along with the market direction hold it or sell it? If it again crosses 324 can we enter again, will the pattern be still valid?
Your take on recent quarterly result of Bhageria Inds :
They have also mentioned entering into Pharma segment :
"Board approved acquisition of 51% equity shares of Bhageria & Jajodia Pharmaceuticals Pvt. Ltd. ('BJPPL’), leading the way for Company to enter pharma segment ".