I usually pick my momentum picks on weekly charts and investment horizon is a few months and more… And periodically I tend to check out the story and whether things have played out as per my expectations.
If the allocation at the beginning is high and stock price is not moving much either ways, and i get another idea which appears more attractive comparatively, I would atleast trim some position to make way for the new incumbent. As to time frame, there are no fixed rules on the amount of time needed to be given for the stock to move.
Just to give you an example, Usha was an idea which I bought first at around 65-70, once I saw a rounding bottom breakout and heard the story and the possibilities that were there in the story. Post that stock price went up and I kept adding at higher levels up to 100. Major breakout happened above 100-105 after which stock price quickly crossed previous all time high and went into a triangular consolidation between 100-165, and during that time it felt as if it was stuck in a range ( this range lasted nearly 10 months) , no matter where markets went. But all this time, the fundamental picture kept improving and things were getting clearer. The only thing needed was to give more time to the story to play out. And now it seems to be delivering robust numbers. Something similar is happening with HBL power, where the story seems clear, but big numbers are awaited and maybe a quarter or two away. That is the time we need to give to our company to deliver and then re assess the story as to how it has played out.
@Riddhi_Shah I don’t track FDC or aarti pharmalabs , but aarti features in one of the stock picks discussed at our recent VP meet at goa. Write up is posted on the forum.
@vishal_lehar How to find sectors with strong tailwinds has been discussed before, and I will post link if can locate it. Else I will write about it.
I would like to understand your analysis of the recent corporate actions from Raymond Ltd. They recently sold FMCG brands to Godrej and plan to use the cash proceeds to payoff debt. And more importantly, demerging the lifestyle business (all textile related) into the FMCG arm and planning to list it as a separate entity. Thus, Raymond Ltd will predominantly become a real estate firm with some engineering and Denim businesses and the new company Raymond Consumer care will primarily be the lifestyle business.
It’s being said that such separation of core businesses will unlock shareholder value with investors being able to value RE & Textile businesses separately.
Do you think this is a possibility?
If yes, how should one value these two separate companies?
Sir
Your view on Thyrocare Fundamental:
Reputation in lab,
Developed network
effect of size on bottom line
Price pressure is decreasing as cash burning by competitors decreasing Technical
Is it forming bottom? Valuation
Low compared to historical value
please suggest your view on Diagnostic space- Metropolis/ Krsnaa if any
Thanks
In case of HBL, some funds were holding HBL since a long time and probably had even exceeded the mandated time for holding the company. ( Usually private equity funds have a mandate to hold a company maximum for 7 years… My understanding from talking to a couple of guys a few years back… I am not too sure how things apply at current juncture. ) So when they see some green they can exit without showing too much losses and hence for guys like those it makes sense to exit.
Comparing HBL and Tata Power is like comparing apples to oranges. I suggest you read about the companies and you yourself will realise the difference. Atleast go to the screener page of these companies and read the short details provided there in the introduction or About section and you will get an idea about what these companies do and how they differ. So in my view there is nothing to compare.
@virtualmanish I don’t track thyrocare or any companies in similar sector. But a cursory look at Thyrocare chart shows that it retested bottom region of 410 ( around those levels) and seems to be taking support. So that should be the area to be watched going forward.
Hitesh bhai i had a question on how do you play companies like HBL. Where price may not do much in a years time frame but fundamental looks to be improving going forward.
My question is if you want to allocate say 10 % to a company. Do you start with 2-3 % and average up once story starts to play out. Or add 10% on falls and wait for story to play out
Hitesh bhai, any change in your Gujarat Flouorochem positions after the recent results? What are your views on results, on expected lines or you were expecting more?
HBL has been discussed threadbare on its VP thread. For getting a better understanding of the business, one can go through the thread and the presentation put up by the company post Q3 fy 23 results. ( Better focus on business divisions and growth and margin triggers rather than be focussed on projections, so naively provided)
According to me, it’s a company that’s going to show earnings traction from FY 24 onwards, and beginning of good results could start from q1 or q2 fy 24. So one has to position accordingly.
Short term movement in stock price is difficult to predict in a news/rumour overload kind of market we live in.
How to build position is one’s own call, according to convenience and temperament.
Dlink has shown good sales growth in q4 fy 24. Margin pressure as compared to earlier couple of quarters has been seen
But since little information is available, one will have to wait till Annual report is published and AGM is held, wherein someone can ask relevant questions to get more information about company’s sales and margin trajectory.
Fluorochem results have been along expected lines and the fear of margin compression has been unfounded in the results. My view remains same as before… Nothing new to add.
hitesh bhai , whats your views on apar ind , how will you trail a stock moving like a train . where would you put your stops in counter like this to not limit the upside but also protect the gain. thankyou
same for powermech . also do you sell a stock on the basis of overbought rsi ? and how do you identify a pullback after a stretched move - a healthy correction ?
Apar Inds has had a spectacular move but today it seemed to have given up most of the gains made in last few days. In the short term it looks to have topped out.
There is no holy grail of finding the perfect recipe for selling a stock moving like an express train. But I think one can try a few observations like
Very high volume days with very high intraday price fluctuations, and price not sustaining near highs.
One can follow shorter term weekly moving avg, maybe like 10 week exponential moving avg.
On fundamental side, we have to watch out for peak margins and peak valuations in a company which usually happens after very sharp run ups. Many a times I try to put in the best case scenario for the next year for a stock and after the run up if I feel stock is expensive on a one year forward earnings basis. I book partial/full profits.
There can be a lot of methods people employ to get out of a fast moving stock. One can try to devise a strategy based on observations over a period of time and see which style works and then try to improve upon that style.
Here in case of Apar, stock price hit an all time high of 3288 on volumes of around 5.9 lacs shares. And very next day (today) stock price corrected sharply and closed at 2600 with higher volumes of 10.7 lac shares. This should indicate that a lot of big guys might have exited, and hence atleast a short term (sometimes a major top) may be in place.
Similar kind of logic could apply to powermech also.
