Hitesh Sir, do you have a view on Vodafone Idea and Bharti Airtel? Can they be good bets for the next 5 years?
@hitesh2710 Another milestone for our beloved forum & in particular this thread
1 Million views 
Approaching 5K interactions (queries & replies with great insights might have covered over 500 stocks)
long way to go… May god give enough strength to you
42 Likes
@hitesh2710
Hitesh Bhai. Thanks for being a wonderful teacher and we have learnt so much from you and gained immensely. We all seek your blessings on this teachers day.
Happy Teachers day.
25 Likes
Hi Hitesh bhai ,
3m India is a highly innovative company with innumerable products and stands for high quality of research across sectors . The company has a history of consolidating for a particular period before giving a breakout to post new highs and also is currently facing headwinds due to corona . They are into smart cities , medical , consumer etc Can it have prospects of going significantly up from here ? How does it compare to prospects of Honeywell automation ? Is it too costly valuation wise ? Many thanks
2 Likes
I was very skeptical about technical analysis and Hitesh’s method of investing by combining technicals with fundamentals played a large part in me taking it up seriously. I am now reading murphy’s book…
I think more than CNBC/ moneycontrol/any brokerage research, this thread would have helped more retail investors in India.
Thanks a lot sir for freely sharing your knowledge and learnings from experience
6 Likes
I dont track 3m or honeywell automation in details. 3m can be a thematic bet based on its constant new launch of innovative products.
3 Likes
What are your thoughts on Kaveri Seeds and Avanti? Both are now bearish on the charts. Kaveri is at 545 and Avanti is at 480
hello hitesh sir,
how to choose one in oligopoly biz , coke vs pepsi, asian paints vs berger , relaxo vs bata,
1 Like
Kaveri has already reported results for its best quarter which is q1 and that has shown decent growth. Next 3 quarters are usually lacklustre quarters and need to see how they play out. But according to management commentary, it should be okay barring some headwinds for corn crop. Vegetable segment is doing well but currently is a small part of overall pf. Rice is doing well and needs to be monitored. Technically support is at 200 dema at around 514, which needs to be watched. Today it has reached its zone of 200 dema.
Avanti has support at around 460 which is its 200 dema.
Both stocks have corrected significantly and would now need to halt their falls and consolidate and form a base and then only we can expect any possible upmoves. The whole small and midcaps segment has undergone another bout of severe correction because of a variety of factors including sharp run ups, and froth, margin funding issues etc.
13 Likes
Choosing in oligopolies depends upon one’s risk appetite. And has to be looked at on an individual case to case basis. One cannot have the same philosophy for all oligopolies.
Choosing between asian paints and berger would be relatively easy as asian paints has strong moat due to its sheer size and geographical presence and distribution might. Bata vs relaxo might be tougher. I would tend to go with bata, though relaxo is also not a bad company. Coke and pepsi is beyond my competence.
Another simpler way to play these things is to buy all the companies in the oligopoly sector as a basket but keep allocation to bigger companies or faster growing companies higher.
But one has to be sure about the tailwinds for the oligopoly sector and then only play it. If the sector is facing headwinds even if there is oligopoly, most of the companies will go down.
15 Likes
@hitesh2710
Hitesh Bhai, how do you view promoter/promoter group/related persons buying and selling a stock. The promoters of Page Inds were consistently selling their stakes despite the business doing very good. It may confuse an investor why they are selling when the business is doing good. Despite the promoter selling, we all know how phenomenal Page Ind investment turned out to be.
How do you view this. Is promoter buying also to be taken in the same stride as promoter selling as in the case of Page Ind i.e. its not much of a significance? or you would be cautious when they sell and be interested when buying happens.
Hi @ram1984
Hitesh bhai will have a more nuanced view but i will try to give my 2 cents
Promter selling or buying is an important cue however by itself it amounts to very less if seen in isolation . I too had the same question on page when i was tracking it about more than a year back . HOwever the action has to be seen in conjunction with other things
In case of Page , they have been reducing their shareholding since a long time even when the performance was good and not just when the performance is faltering . They had very high holding and any promoter would like to diversify their income streams just as we investors derisk by diversifying our portfolio .
One must also see promoter conduct over a period of time as to they dont have any unlisted subsidiary where they push their profits .
One must observe how does promoter treat shareholders ?
They declare dividends regularly
Till now there isnt a case of they shortchanging investors .
Besides the quarter on quarter change in promoter holding isnt significant and they still hold significant holding
Another example is infoedge , a very reputed company in terms of corporate governance and renowned for management quality - they too have been reducing their holding on a very consistent basis but still performance has been great .
Conversely a increase in promoter holding doesnt guarantee performance as sometimes even promoters overestimate the business potential
CCL products , AFAIK, have been increasing promoter holding since long time but performance is at best average considering company at its level
One must observe management promises and how they execute over a period of time . Do they deliver less than they promise ?
How is the capital allocation ?
Now i dont track page in detailed way, but know that they are getting aggressive on kids wear which is a big market
great companies have a ability to manouever out of tough times and are experts at capital allocation but they too may falter .
6 Likes
Hi Hitesh,
Recently there has been lot of focus on API and PFI companies and would like to know your views on Granules India.
Thanks
Thanks. I was tracking the insider buys of Laurus Labs and the Vice President-Taxation buys 11.5 Lakhs worth stock. A salaried top executives has different avenues to invest but to make market purchases at these levels of his own cos stock seems to says something. One of the promoter now makes market acquisition for 9 cr. Anyways, I am not sure how far these help in supporting the investment thesis
7 Likes
I think @A_shah has covered the topic on promoter buying and selling very succinctly.
As far as I recall, Peter Lynch in One up on wall street mentioned that small amounts of promoter/management selling should not mean much because often it is for the purpose of some personal reason or need. Large scale selling needs to be taken seriously.
Promoter buying on a consistent basis improves confidence in a company as it tends to tick one of the boxes in investment checklist. But as mentioned in the preceding post, by itself it should not mean much. One cannot take only one aspect or one parameter and keep harping on that and mould it into an investment/rejection thesis.
I think should should read up the chapter on promoter buying/selling in One up on wall street. It has been very well articulated by Peter Lynch as are most things related to investment. Its a book that merits multiple readings to clear basic concepts of investment.
On prodding by Abhishek Basumalick, I started reading Beating the street by Lynch today. I think I may have read around 10-11 years back but it is a thouroughly enjoyable book with his easy articulation and witty narration of investment lessons. Target is to complete the book in a couple of days and it seems I am halfway there, having read nearly half the book in half a day. Beauty about Lynch books is that he simplifies things so well that its a pleasure to read his books. One never gets tired of reading or rereading his books. And there are always practical insights to be learned from his books.
27 Likes
Hitesh sir,
What is your view on the recent re-categorization by SEBI for multi cap schemes?
There are views at both extremes and I can understand the bias of both sides.Those heavy in Quality large caps are trying to gauge it with their lens while those in small caps are jubilant as they see that there is a huge money to be flown to small caps, which in my opinion is impossible as there is a limited market cap of small caps due to the size of the companies,corporate governance issues etc.
Will there be a huge churn in multi cap portfolio to comply with SEBI reclassification, or the multi-cap fund managers will find a workaround/loophole so that they do not have to churn their holdings(like merging with large and mid-cap fund for example, changing fund to large cap etc.).
Do you foresee a mid 2018 kind of scenario when lot of churn happened due to SEBI reclassification then?
Request your views.
4 Likes
The recategorization of multicap schemes by SEBI seems exactly reverse of what happened in Oct 2017 where in a similar re organisation the SEBI single handedly destroyed small and midcap segment rally within 3 months of its announcement i.e by Jan 2018.
So logically thinking this should lead to a strong small and midcap rally because a lot of fund is going to chase a lot of stocks with shallow market breadth.
The fly in the ointment could be the margin funding rules which now are supposed to come into play by 15th Sep 2020 unless the implementation is postponed again. This could be a dampener in trading volumes.
Coming back to the recategorization logic, I think we can see good rallies in the better varieties of small and midcap companies which have not moved all that much in the recent market upmove from April May 2020.
Since past 8-10 trading sessions the music in the small and midcap segment had become very feeble due to various fears about macros and the margin funding issues. Now this could start playing out again.
What I would be worried about is sudden frothy moves which could be unsustainable. I would watch out for signs of froth and take an appropriate call accordingly but that situation seems some time away.
On the ground situation still continues to be troublesome and economic activity has not picked up too much. Even the pandemic seems some time away from subsiding. So we have to be careful about the projections we make for companies we are invested in and try to be conservative with them.
I would observe how market behaves in next few days and then make any conclusions about the SEBI diktat. In the shorter term (and even in most time frames 
), its often difficult to foresee where markets are headed, but we will definitely get an idea of things to come by looking at the market reaction to the sebi order. As of now I have my fingers crossed and I remain comfortable with all my holdings irrespective of market moves.
32 Likes
I saw a news being flashed in ET now that SEBI has clarified as follows on the Multicap fund, keeping in view stability of the stock market.
The AMC can have the following options for the Multicap mutual fund investors.
(1) since most Multicap funds are having 70-80% Large cap stocks, they can always merge the multi cap with large cap mutual fund.
(2) Investors can be given option of switch from Multicap to any other mutual fund catagory.in the same AMC.
(3) Convert existing multi-cap schemes to another category like large-cum-mid cap scheme,
1 Like
Looking at the quality of multi cap stocks, I am not sure if all of the AMC’s would follow the rule. They might instead convert the schemes to large cap schemes. In such a scenario the up move could be less than anticipated.
Also do we have enough quality small cap and large caps to absorb such a large inflow of funds?
1 Like
@hitesh2710
I have couple of questions on Kaveri Seeds:
- Earlier there were some bad remarks on Kaveri Seeds. I am not too sure about that as i had never followed Kaveri Seeds.
- Also company pays negligible tax.
Thanks for answering the above questions.