@hitesh2710 Sir, any specific reason for your exit from Schaeffler India…
Also Sir, your views on Affle India & RACL Geartech for long term…
Hitesh Bhai good show from M&M
Dear Hitesh
DCB Bank reported decent set of numbers. I have seen in earlier posts, you are interested in small banks. Are you still tracking DCB. If yes, can you share your views about the bank (technical & fundamentals if possible).
Thanks
Hitesh Bhai what Industries/sectors do you think will grow in the coming years?
And also what stocks are you actively looking/studying currently.
Thank you
Laurus Labs results have been good though not earth shattering. The fact that the stock price remains below 200 dema even after these results tells us that. Maybe some more positive doses of news/information/rumours are needed to take the stock price further up.
I think a breakout and close and then sustaining/consolidating above 525-530 would signal a possibility of further upmoves.
After crossing its post IPO high of 130 (adjusted for splits) in July 2020, stock price went up to post a high of 723 in August 21, a gain of more than 5 times in around a year. So it might take time for earnings to catch up before stock price makes a major upmove. I would not expect the stock price of Laurus to go up in a similar fashion of 5 times in 1-2 years from current levels. Going ahead, I think the best case for Laurus is to occupy a portfolio as a compounder.
@Shakti_Srivastava I don’t track Affle or RACL. Schaeffler India was an exit based on technical targets being achieved.
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Most of these private banks have given decent results till now. And these were largely along expected lines. It was all about plucking low hanging fruits of reversal of provisions made earlier. Going ahead, those banks which will be able to manage strong profitable growth will be the winners. It might be a difficult job to seperate which ones will outperform, so might make sense to play a basket approach.
I try to play stocks where clear cut technical patterns are present, so I can have my risk return well defined. I keep posting charts of stocks I find interesting on the 52 weeks high thread.
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I wish I had a crystal ball to gaze into to find out which sectors are going to grow in coming years. As investors we can take educated guesses on this topic and hope for the best. I think in the run up to 2024 elections, we might see a lot of govt spending, so infra, railways, power etc could be the sectors to watch out for.
Another field which will keep investors excited would be the EV field. There will be different ways to play this theme and we will have to keep open minds to find out potential winners. Against that, it will be a fertile ground for operators to plant stories and rosy pictures and create potential bull traps. So we have to be wary of rumours/half truths and so on.
Any investment opportunity where there is a win win situation for the company, its suppliers, customers will be a great opportunity. There will be such opportunities from time to time, and we have to be on the lookout for these kind of opportunities.
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I think I have expressed my views on most of these subjects earlier, but not listed in the order you have posted, So attempting to put my thoughts here in a structured way.
- Stock selection is something that is totally flexible, Ideas can generate from fundamental study or from study of charts. But once I find something interesting, I make it a point to check other companies of the same sector. I often stumble on sectoral fancies in this manner. Often a company is a sort of a standalone type of company, not specifically attached to a particular sector. If that’s the case, then the study has to be in a different way. But if a sector is identified at an appropriate time, the job becomes easier.
I think I had been harping about auto and auto ancs since long time, based on charts. Most of these companies had started showing relative strength on charts much before positive fundamental news/results. The first I got wind of this sector in fact was listening to some financial company where management clearly articulated that auto and specifically CV segment was doing very well for them. So that guided me to auto sector and specific players benefitting from CV cycle upswing. And deeper down, auto ancs which catered specifically, or predominantly to CV sector. And wherever I looked at picks from the above criteria I found very strong charts. That increased my conviction in my theory. Once a sector is identified, I prefer to play a basket approach with appropriate allocations. Monthly sales numbers in auto sector is a big help in seeking an understanding about the sector.
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Portfolio building is a very subjective topic. Everyone has to find their own niche and comfort zones. I these days prefer to play momentum in most of my portfolio. Momentum means companies with business momentum showing momentum on charts too. How much to allocate is a very individual choice. I might be comfortable at allocating 25% to my top pick, whereas someone else might panic at going above 10% and might have sleepless nights. … (all this is at buy price) So there are no fixed rules for these type of questions etched in stone.
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Technicals plays a very important part in my stock selection. Just to give you a recent example, I liked the turnaround results of Ujjivan financial services. ( or Ujjivan sfb if you prefer to look at it. ) But once an inverted head and shoulders pattern breakout happened, and I could see successful retest happening inspite of overall weak market days, I bought it, hoping for the pattern to play out. And the results that came out and market reaction to that validated my view. I added more to my positions immediately post results when there was a chance.
While selecting a basket of stocks, I prefer to select few of the sectoral stocks which are showing good momentum both on funda and on charts.
- Auto anc and power sector do seem to have strong tailwinds as demonstrated by price action in these stocks. The rally in these names seems to be already on since quite some time and might have more legs. The only care we as investors need to take is to make sure that we are not the last ones to the party. Whenver these sectoral fancies reach their zenith, there is a lot of media publicity related to the sector, and a lot of fanfare on Whatsapp groups where even those previously sceptical of the sector start expressing bullish views about the sector. Even post these events, there is time enough to exit these sectors.
You can refresh the recent market fancies related to chemicals, platform companies, fancied IPOs, textiles, sugar etc. Usually there is similar pattern everywhere, only the colors and contours change. Basic structure remains the same everywhere. And if we know how to judge, fear and greed and FOMO is visible everywhere.
Another thing we as retail investors need to know is that once a stock or a sector has had its day in the sun, its better to leave it alone. These will not provide the real big returns.
MY advice would be to get hold of William O Neil’s book, How to make money in stocks, and/or The Next Apple, and try to imbibe the learnings of these masters in conjunction with the wisdom of the mahaguru Peter Lynch. Many a times it will entail multiple readings of these books, but the mental framework this exercise provides is great and it makes investing relatively easy. And try to learn some basic stuff about technicals with an open mind… Simple stuff about stocks and sectors showing resilience during market meltdowns/corrections and strength during market rallies. And some basic patterns like rounding bottoms, flags, cup and handles, inverted head and shoulders etc. Plus the concept of 52 week highs, multiyear high breakouts and subsequent retest and resumption of upmoves, so on and so forth. These are largely visual exercises and do not require too much precision. In my view, this exercise can be conducted using platforms like screener also.
These days, sectoral fancies tend to change quite frequently and within a short span of time most of the moves play out. So idea should be to sharpen the skills to detect changes in sectors happening at an early stage to maximise returns and avoid getting trapped at the fag end.
The whole idea of momentum investing (and should be for investing in general too) is to make maximum gains during rallies and avoid painful drawdowns during market corrections. Even sectors in fancy will not make much upmoves during weak markets, But these will definitely hold grounds at key supports. And during rallies these very stocks will give big moves.
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Hitesh Sir,
- What do you think of Praj Industries now? You used to be an investor or still are?
- I’m confused about the textile industry and I couldn’t find much material about the textile industry while I was researching Nitin Spinners. What do you think of the textile industry as of now?
You can scroll back a few posts to see the views on Praj Inds. No use repeating same stuff again.
Regarding textile sector, you can go through concalls and latest annual reports (wherever available) of various textile sector stocks to get an idea about how things stand now. There are well researched threads on VP also regarding textile sector.
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I read that you sold laurus labs near peak but here i can see you still are tracking laurus labs,do you keep a track of your sold investments and how do you do that?.For me i usually forget about them after i have sold them.
Hitesh Bhai, what is your latest view on SCI. It had hit low below 100 and stagnating around that level. There is no negative news vis-a-vis divestment, but getting delayed due to inherent inertia of Govt Babus. Are you still invested ? Your views will be helpful. Thank you
Hitesh bhai you have mentioned that Avanti Feeds and Kaveri seeds are two of the stocks that you have owned before and were your big winners. They are currently out of favor with stock not going anywhere. You have mentioned that when stocks of sectors go out of favor it sometimes takes a lot of time for them to get somewhere. It happened with ITC also which has somewhat recovered.
Fundamentally I see they have improved their business strengths and survived and grown over multiple cycles now. Kaveri seeds has now expanded over multiple segments and geographies reducing its dependencies on single crop. I see Avanti Feeds in a sector which has good long term prospects as Ocean Fish yield world over decreases due to over exploitation aquaculture and specifically shrimp farming has a long runway of growth.
With valuations being fair for these two what is your view on these companies. DO you revisit your earlier thesis.
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SCI was a learning experience. I was getting nearly 60-70% on my initial purchase price of around 90, when I had also posted chart of its breakout. The stock price had rallied to around 160 before it started correcting. On the way down I should have been stopped out by trailing stop loss of around 140-145, but kept holding on in the hope of divestment and much bigger gains. Ultimately I had to sell off at around 115-120, when it started showing a lot of weakness.
The lesson learnt was not to rely on promises of govt divestment etc where nobody bothers about timelines. If you check the utterances of govt officials/ministers there were multiple quotes of the company getting divested by a certain deadline. And still there does not seem to be any headway in the matter.
Instead if I had heeded the axiom of selling atleast partially when technical targets are met, the anguish would have been less.
@raku I don’t know what the query is. Laurus is a good company and hence remains on my radar off and on. Not all companies I sell off are on my radar subsequently.
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If you go through concalls of both Avanti feeds and Apex frozen, there is clear cut articulation that both managements expect FY 23 to be a year which is better than FY 22. However I do not consider these companies to be structural growth stories. Both are susceptible to vagaries of demand /supply and the duty structures in the US markets. Plus the all important input prices.
Kaveri seeds has been struggling to show meaningful consistent growth. They keep doing buybacks regularly which keeps folks excited, but ever since it went into corrective mode post its stellar rally where it went up multifold, it has never had any meaningful rally.
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Hitesh bhai could you explain in detail about the structural growth stories? How a small cap become a large cap like Infosys and divis? It’s a 1 in a 1000 chance but still what’s the catch here? How can a company with below 100 staff goes on to employ lakhs of people in just 3 decades? Could give some case studies and if possible few stocks/sectors where there is potential and what the management has to do to realise the potential ? Thanks in advance
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Dear Hitesh sir
By any chance do you track HG INFRA ENGG and if so what are your views looking at its charts?
Best regards and thanks in advance sir
Dear Hitesh,
Since you are invested in Ujjivan, can you please help me to understand why does Ujjivan Financial Services trades at a steep discount to Ujjivan SFB calculated on the basis swap ratio of 10:115. Discount is almost 33% at CMP.
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Hello @hitesh2710 Sir,
I have query on my tracking GFL Ltd(Holding company of Inox ~ 43%) Inox and PVR in process of merger
Is it possible that GFL gets dissolve and holders gets PVR shares after completion of merger or INOX shares before merger
Please share your view, knowledge and experience on this type of situations
Thank you.
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To get an idea about structural growth stories, or about how a small cap can become a large cap, you should go through this lovely thread of 100 baggers started by dr pragnesh shah, who has put in a lot of efforts to put forth the idea of 100 baggers in a concise format.
Post that you can go through the VP threads on success stories of companies that came out of obscurity and became big winners. Threads like Ajanta Pharma, PI Inds, Astral, etc. Benefit of going through these threads is that you get to know what people felt and wrote when the company was a small company and how things unfolded as time went by. Its important to know opinions of retail investors in early phase of big winners, because that is what we may ourselves face when we are on to a big winner early on.
@AMAN_SHAMSHER I don’t track HG Infra.
@Jatin_Parekh I don’t track GFL.
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