ITC remains one of the contra bets in the current markets. As you mentioned, it trades at multi year low PE which it tends to so every 5-10 years. The valuation given to ITC is lower because cigarette business which earlier was considered to be a stable cash cow is now being perceived as a business which is under threat of govt regulation esp in terms of increasing taxes on tobacco products. My view is that after a point govt will not increase taxes because one cannot kill the golden goose.
FMCG business has not performed as per expectation in spite of so many years having gone by. I think ITC is not being run by thorough professionals with a keen eye on profitability. (its my guess looking at comparision between other similar fmcg cos and itc).
But overall I think from current prices there might be little to lose and if it regains market favour, one can make moderate returns with low risk. disc: invested.
Hello @hitesh2710 sir,
What is your view on IG petro. The stock has been beaten down by almost 70% from its high. I understand that the business is cyclical in nature and the operating margins have hit rock bottom in the previous quarter.
Are there any signs of Phthalic Anhydride cycle turning and is it a good time to slowly start investing here? Would higly appreciate your expert views on thisā¦
Hitesh ji,
With your vast experience, you had correctly predicted in early 2018 the starting of distribution in small and mid caps. Sir, do you feel now that some money is moving out of the steady compounders and into small and mid caps as well as the newly listed companies? Please ignore if the question is not pertinent to the forum.
What is your take on the company P&G health, erstwhile Merck which was taken over by P&G. The company deals in vitamins, minerals and healthcare supplements for a healthy lifestyle.
Thanks.
I think its still too early to call a resumption of small and midcap rally. But what has happened over the past couple of months is that the companies from the small and midcap segments which have reported good numbers have been rewarded with price rises. If that could be considered a perceptible change in sentiments then its a first sign of turnaround for small mid caps.
Even if one looks at the timeline, since Jan 2018, the segment has been in the dumps and usually it takes 18-24 months for most indices to make comeback. (can be more or less but this is usually the time taken in most cases). So about now we are in the range of this period to atleat start seeing some signs of a turnaround.
Since past 2 weeks I have been seeing some signs of exhaustion in large cap stocks like HUL, some other FMCG companies, HDFC bank, kotak bank etc. The mantle of leadership seems to have taken up by Reliance.
The newly listed companies usually are traps unless the business model is really good. There have been plenty of examples in the past of these newly listed stocks going ballistic and then giving up all gains. There would be all kinds of reasons given for their rise and justificaiton would be given for their valuations. Once stock price starts falling, all theories go for a toss. One needs to study these companies in detail before thinking long term rather than being carried away by price momentum.
@jugalmoney, I dont track Merck too closely now. @Jilani Not closely tracking La opala. @dm88 Not much idea about IG Petro.
Hitesh bhai,
Titan has lowered its this years revenue guidance. How should one consider that while considering a 3 year view if i am already invested ? Would that alter its growth trajectory significantly away from expectations and cause a derating ? can it not be considered a secular growth story like Bajaj Finance ? Many thanks
Titan lowering its short term guidance should not deter long term investors. But one has to keep in mind the valuations to pay for such guidances. Comparing Bajaj Finance with titan is not an apt comparision. Bajaj Finance is growing north of 30-40% whereas Titan is more of a 15-25% growth story. At some point of time, high base will also catch up with growth prospects of Bajaj Finance but when it will happen needs to be thought through.
@hitesh2710 ji,
You mustāve read that Muthoot Finance is foraying into Asset Management business by acquiring IDBIās mutual fund business? They seem to be diversifying aggressively in order to reduce dependence on Gold loans. Since, you were previously invested in this company, what is your take on the developments & also the integrity & capabilities of the management to carry out the transition?
I think muthoot finance buying the MF business of IDBI seems like a good idea as it provides some diversification from a predominantly gold loan based business. And since its a business thats running, it starts adding to earnings from the time of acquisition. How they take it forward and scale it needs to be seen.
I am not too worried about integrity of promoters but would like to watch how they scale it up against strong competition in the space. Chances of cross selling MF against gold loan customers seem low.
In case of all the compounders like Bata, PI, BF, etc, as long as the earnings keep coming, there should be little to worry about. Markets love consistent growers and reward them accordingly.
I would request if you can share your current holding (of course, with a disclosure so that no one try to imitate blindly).
Iām sure, it would be a great learning for all aspiring investors to learn from your thought process and to know how you align your portfolio with a dynamic market which is full of useful as well as useless information.
Would also like to know your asset allocation:
Equity:Debt:Gold:Real Estate:Cash/other, in such a time where market is partly expensive, whereas some pockets are bleeding.
If not comfortable in disclosing names, please share a general sector wise allocation, just to get the essence.
I know you have disclosed your holdings in various threads but many individuals might be like me who donāt have the luxury to go through all the threads or for whom visiting valupickr forum is limited to read only this thread once in a week/month.
Kindly ignore, if my request is irrelevant in this thread.
In Auto space, if I remember correctly, you told that OEMs are better bet than ancillaries to play the auto cycle. Heard similar suggestions from other experts too. What I understand is that the ancillaries have no edge as the OEMs are free to negotiate with a competitor if anything untoward happens. However, ancillary companies also have the diversification benefits among various OEMs, so less susceptible to OEM specific issues unless the exposure is high, and in the last 10 years many such companies have created huge wealth. So, can the diversified ancillary players be part of an opportunistic portfolio or even long term candidates (if there is patience to hold on during bad times)?
can you recommend some good books or maybe websites or youtube channel to learn simple technical analysis to pick stocks at right time and to do some short term momentum based trade to get more capital to add to core port folio.
or maybe some methods of indicators n patterns to learn to pick at right time
it is not a technical thread but you guidance can help lot of people
I had a look at polycab and missed it before it took off. The only thing that worried me was the very high concentration of revenues coming from cables and wires. All the players in the segment of the likes of KEI etc were doing constant capex and I was not too sure how far the robust demand would continue. The FMEG segment of Polycab can be interesting if it picks up scale.
Amber listed with a lot of fanfare and promise but fell in line with markets. The reported numbers especially q2 fy 20 have been promising and with higher penetration of consumer goods, future looks bright. It seems so for Dixon technologies also, which has reported very strong numbers.
