I think most of the times even when the whole sector has started delivering good consistent results for a couple of quarters or more there is disbelief in the markets regarding the prospects of the sector. Same thing applies individually to turnaround companies also. But with sectoral thing it becomes easy to spot.
Currently i think the asbestos sheets companies seem to be midway (or early) in their bull phase. One needs to just look at the results posted in last two three quarters and still most of them are below book value and at 4-5 PE and around 4-5% div yields. It then is only a matter of time before market fancy catches on for them.
This is my first post on Valuepickr and I’m silent admirer and follower of you since your presence in TED. I would like to know your opinion on ABBOT India and its long term prospects of allocating 50k amount by investing 40 shares to start with ?
It is indeed great to see that you make it a point to answer each and every query personally and I would just like to thank you on behalf of all the boarders. I joined Valuepickr recently and hence have lost out on the amazing recommendations made by you such as Ajanta. But I guess better late than never.
I dont track abbott too actively but at cmp of around 1400 odd, one can make a portfolio bet and there is likely to be limited downsides.
company has a hefty amount of cash on balance sheet which should cushion downsides.
But regarding upsides one will have to be patient bcos growth seems to be lagging. Only trigger could be some sort of de listing exercise or else some solid growth comes about.
I want to add few points to Hitesh’s analysis. Abbott has one very good product PEDIASURE . It’s on par with or superior to any other health drinks like Horliks,Bournvita etc. Along with that some other well known products like brufen ,Cremafen ,Digene are there.After merging with Solvay showing some signs of momentum.It’ may be due to consolidation of manufacturing facilities , Marketing team Etc.
But Abbott has two other unlisted companies operating in India.So new products are launching through unlisted entities only.It’s just like Procter & Gamble case.
I too was excited about the Pediasure prospects and even bugged Hitesh Bhai to have a look. But gave-up the stock as their IR team confirmed that Pediasure does not come under the listed entity.
Thanks Hitesh for your valuable inputs.I consider myself to be very immature and still learning my babysteps.I got excited about Abbott by looking at the healthy balance sheet with zero debt.I made an entry around 1450 to start with and planning to hold atleast 2+ yrs and hoping for 5% growth in stock annually !
I had asked my wife on the quality of “La Opala” cookwares. Her feedback is pretty good. In turn out that we had bought “La Opala” stuff for our home too and in my in-laws house. So brand wise it seems like a good brand. Plus they are doing some good export.
I will check, what I can do with La Opala. I used to lead the Audit Team which audited the financials of La Opala. This was 5 years back. I will get in touch with my ex-firm colleagues. Let me know if there are any specific questions.
Had come across La Opala at around 40 bucks…kicking myself for getting out early. I think they do have a good brand and the co has worked well on the advertisements etc to improve their brand presence. It may be a good long term story however having seen the stock at very low levels, I’m having a ressistance in re-entering at these levels.
Few months back PN Vijay had recommended as his multibagger, I had entered at 100. For 2 months time, this stock went nowhere, so sold it out with a minor profit. I knew when it started its upward journey at 125, because I was tracking it. As I didn’t have much idea on its growth scope, so I fooled by brain by thinking it is costly now at 125, 140, 155 and so on.
Only today I added bunch of them at 175.
Pretty much same story have happened with me in case of Divis Lab also.
Hence, these days I think 2-3 times before selling a fundamentally appealing stock. I would rather keep it 0.5% of my portfolio (by selling most of it), so as I can add it more in a staggered manner on each increase.
What sectors are highly likely to outperform in next one year.In 2012 it was cement,pharma,and FMCG.though many of us here have benefitted by rally in pharma this year,I donot know how many invested in cement .did we fail in identifying it coming?
Cement stocks have doubled, some 3 baggers.i think one can invest some portion of portfolio in such cyclicals. I am new to investing so I could not invest. What are your thoughts on next likely sectors that are going to deliver spectacular returns in next one year.your comments please.
Mayur is an accumulate gradually kind of stock at cmp.
Kaveri – since I have bought it at around 800-830 these levels of 1270 odd seem relatively expensive to me. But we cant go back in time and buy stocks at prices few months back so maybe one can buy at cmp and add on declines gradually.
A look at chart seems to indicate that a short term bottom may have been formed at around 340 last week. Weekly chart shows a doji formation with a long tail (open and close at same level for the week with a low which is much lower than close).
plus stock seems to have completed an abc type of correction after a five wave advance (this is elliot wave mumbo jumbo into which i dont go too much into details but can make out some clear cut patterns to a limited extent with limited success).
promoters seem to have bought stock again – latest announcement shows them to have bought around 18000 shares .
360 earlier was acting as a strong support but was broken on closing basis for only one day and on next day a low of 340 was formed and close was again above 360-- seems to indicate that some weaker hands were shaken out or in other words some stops were triggered. Now my stop loss based on technicals is a couple of days closing below 360 levels. lets see how the pattern pans out.
shilpa seems to have given the much awaited breakout today. stock made a high of around 325 and closed at around 306. Now it becomes a good buy on declines for momentum trading as well.
Hitesh bhai what happens when they have a negative surprise on tax front in their 3Q numbers? Which is very likely as they were not committal with regards to their tax liability. Once they clarify whatever the figure is the clarity itself would warrant a rerating of the stock.
regarding q3 numbers, we have to cross the bridge when we come to it and that is close to 2 months away. till then stock price may be stuck in a trading range and we might get good entry and exit points.
as u mention, once clarity emerges, there might be further re rating of stock. I think if there is no retrospective tax, markets might take it positively bcos even with higher tax rates company seems to be posting excellent numbers.
