@james_kerala
Natco pharma has been a big disappointment time and again for a lot of investors. So for a company like this, it takes a couple of quarters of good results to make participants take notice of it again.
Results have been good as expected, and the response to the results has been lukewarm. But as said before, it might need another quarter or two of good results to start seeing action again.
About market observation, I think the broader space of small and midcaps seems to be attracting a lot of interest. Regarding pharma sector showing strength, I am not too sure. I think we have to be more stock specific in pharma space while taking a call
@hitusohi1 I donât invest in nifty bees for any duration. I guess the day I decide to do that, I will probably retire.
25 Likes
@Paxrxxthi
I am not a big fan of dividend investing. There are some investors I know who have done very well doing dividend investing, but its not my cup of tea.
The main thing to take care of in dividend investing is to focus on companies in this theme with consistent predictable cash flows. These companies will be able to deliver dividend over a long period of time. If the business itself is cyclical, then dividend payout will keep fluctuating over a period of time.
But if a growth stock ( it may be slow growth like ITC) is available at decent dividend yield, it could be icing on the cake. Strong bear markets usually provide good opportunities for getting growth stocks with good dividend yields.
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Hi Hitesh ji, how do we handle stocks which are in our portfolio, have so far grown considerably and keeps hitting new ATH.
I know it is a âgoodâ problem to have, but I am not sure whether to sell or buy more as at every ATH, I think of buying on dip but it further rises. I am talking about KPIT which is giving good results but whether the CMP will give me margin of safety is something I am unable to gauge.
I have been proven wrong when it crossed 800 and again crossed 900. Your experience and insights can help.
Somehow I have realized that one can learn about how to buy a stocks, but holding and selling is purely based on psychology and experience 
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@paramjeetsingh
Riding winners is like riding tigers. You are too scared to ride, too scared to get off.
I guess the simplest solution is to follow an objective parameter like say 30 week moving average. This will get you stopped out once the major trend reverses⌠But here too there can be false breakdowns. So we have to learn by experience.
If you follow fundamentals, it makes sense to keep riding till the earnings trajectory maintains the same angle. Say a 20% CAGR valued stock grows at roughly 15-25 CAGR, 30% CAGR story keeps growing at 25-35% CAGR or near about and so on.
There is no holy grail for riding fast growing companies. We have to play it by the ear and keep learning on the go.
45 Likes
@hitesh2710
Hiteshbhai, do you track recently listed cash management companies like CMS info system & radiant cash management. I look them as bet on âcurrency in circulationâ growth in India. They have good margin & growth too. Currently may be out of radar for most of the big guys.
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Hitesh sir, what are your views on DLink post the recent results?
Hi Hitesh Sir,
If you can share your views on Caplin Point Lab. The company is consistently posting good set of numbers from long period of time even though operating in 75% of drugs in generic category and most of the market covered is unregulated. Now they have forayed into regulated market of USA with one of its subsidiaries. Can we see some sort of re rating or the stock will remain in the same valuation bracket in which it is trading right now?
Thanks.
1 Like
@Hemal000
CMS info comes across as a good company with a good business model. I had a look at it earlier and found it interesting, but found other options to be better and hence gave up the idea.
@pcygnii In case of Dlink, the thesis was improvement of margins in an otherwise low growth business. But q4 results were a big disappointing. Since company does not give out any details, the wait will have to be till the next annual report and/or next AGM.
@kanishak I donât track caplin point.
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Hi Hitesh (@hitesh2710) bhai: Your CDSL writeup (in another thread) highlighted the tech aspect lucidly. Request few words covering funda aspect as well.
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Hi Hitesh ji @hitesh2710, would appreciate your views on HIL. I have shared my understanding in another thread: Bull therapy 101-thread for technical analysis with the fundamentals - #2251 by anirband87
@Surender
I have not studied CDSL too much in details but basically it should follow market mood. If markets are buoyant, narratives will gather pace and stock prices will rally. Business wise, it remains a solid business, but because of the effervescence, it was taken to unsustainable levels in terms of valuations. When these things happen and mini-bubbles are formed, a pin is always waiting to prick them and then the pendulum swings in opposite direction and stock gets beaten more than it deserves to be⌠That creates an opportunity for short to medium term trades. Sometimes longer term too⌠And after some more drubbing and then some respite in form of sideways consolidation, stocks often tend to move up⌠That is oft repeating story in many stocks over different time periods.
Seems to be such a case in CDSL⌠How it plays out needs to be seen, but these kind of opportunities can be played with low allocations to get some gains and positions should be evaluated from time to time.
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HIL had a stellar run from levels of 600 in march 2020 to 6700 in August 2021, a rally of more than 10 times in less than 18 months. All said and done it remains a cyclical business inspite of noises about diversification into more solid business etc.
The understanding about the business I have formed after watching it over the years is as follows:
It is a business which has margins of 10-15% during good times which often last 2-3 quarters and during bad quarters margin falls to 1-5%. This too lasts few quarters. Idea should be to buy when it suffers from poor business conditions with sales and margins affected for 2-3 quarters and there are signs of bottom formation on charts and sit tight for few quarters and hope the cycle has turned in your favour and plan your exit when company has had a couple of good quarters and there is froth and company is described as a âstructural growth storyâ and starts getting fancy valuations.
Its difficult to exit when price moves up fast and the narratives keep improving, but one has to develop the understanding about the business cycles and act accordingly. At the core of the understanding the fact remains that it is a cyclical business and will remain so unless something drastically changes.
Coming to GMMA charts, there is breakout from two trendlines of different timelines, One is longer term trendline drawn in green solid line and other is shorter term trendline drawn in solid black. On bar chart on weekly chart, there is complex inverted head and shoulders breakout and now it seems to be on a corrective mode on daily charts which could provide opportunities to buy. ( I donât own it but it remains on my watchlist. )
16 Likes
Hi Hitesh ji (@hitesh2710), would appreciate your fundamental views on JMFINANCIL at this valuation as ipo business pickup ,fast progress on pre covid books cleanup and no near term negative surprises from arc(improving mix of retail to corporate)
hello sir,
I wanted to know your views on phantom digital effects??
Hi Hitesh ji, want to add some good compounders in my portfolio from FMCG and Auto sectors for long term view of 8-10 years. I already have HUL, while earlier was holding Nestle but sold due to very high PE, but again thinking of buying it. Also Maruti used to hold during 2018 but sold long back. Current just hold balkrishna industries. Kindly suggest few names for serious consideration and further study.
1 Like
@Mudit.Kushalvardhan
In the compounders category, there are plenty of options. You can have a look at Pidilite, PI inds, Marico, 3M, Food franchises like Jubilant, Devyani, Sapphire, etc, Dmart, Titan, There can be many more names that can fit into these categories.
The main job to be done is to find companies at right valuations and loosen the purse strings at opportune times.
Most of these businesses have durable moats, and long runways for growth.
(Consciously not adding Asian Paints, bcos I donât know how competition from Grasim, JSW etc will play spoilsport.
@siddhakkohli I donât know anything about Phantom.
15 Likes
Hi HItesh Sir
What is your views on Force motors.It looks like a good turn around candidate and that is also reflecting in the stock price as it has almost doubled in last few months.
@naquib_alam
Force Motors had a major breakout above 1600 (fresh 52 week high) and on the back of positive news went up to levels of 2200. It now seems to be digesting the move and consolidating sideways in a tight range. I donât track fundamentals too closely, but if good news continues, it can head higher after the short/medium term consolidation is over.
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Nifty has had a dream run since the last swing low of 16800 and at that level, a lot of technical analysts were predicting levels of 15000 and 14400 or so. But markets always have a mind of their own and most of the times tend to confound everyone. If one recalls the negativity and dark clouds at that time, there were no silver linings visible at that time and inspite of all that markets kept going up and we are again close to touching distance of previous all time high near 18890.
I think this goes to prove that its difficult to pinpoint or forecast markets too accurately in the short term. Rather it would be prudent (investors/traders following technical analysis) to wait for markets to do their stuff and once a trend is established, get on the train because the ride thereafter would be easier and faster and therefore more enjoyable. For the fundamental or long term investor these things do not apply as they should be overjoyed by sharp corrections.
Attaching a daily bar chart of nifty wherein there was a breakout from an inverted head and shoulders pattern on 27 April at levels of 17850 with potential target of 18900. We are close to those targets and at close to previous all time highs. Usually near or slightly above these key levels some amount of profit booking/consolidation is expected. Index may go sideways, or correct but stocks in strong momentum would find it easy to move up during these times. We have examples of such strong momentum stocks like HBL, Usha, Som distilleries ( some stocks which I own and track closely, there will be many more such strong stocks) having strong runs. We have to figure out ways to ride these kind of stocks as many of them end up having parabolic moves, often having short to medium term bubbles. If we ride these properly, a lot of wealth can be created. Best thing is to find out stocks with strong momentum with good fundamentals and good future prospects ( by scuttlebutt, management articulation through annual reports and concalls etc, feedback from sector peers etc. )
After a long time we are seeing strong momentum in small and midcap stocks and if we are into these segments of markets it makes sense to make the most of these opportunities. Many technical guys are now projecting levels of 19000 (not too far away) to 21000 in near to medium term. I usually try to know where my stocks are headed especially when there is good market strength and am not too focussed on short term sideways movements in markets.
43 Likes
Hitesh ji ,
How do you break out stocks?
If the stock has break out its range or previous top ,if its give dips after breaking out does it make sense to run after that stock ?
