Hi
There is no fixed Rule for this.
1.Some people put trailing stoploss ( say 10-15 percent from 52 week high)
Some follow 10 week ema
Some follow Vstop- the intervel is tighned to 2, 1.5 like that
Some people take away their investment and leave the remaining like free shares ( as ling as company is growing). There are people who made 100’baggers like this by leaving the free shares like this for years together
So in nut shell, it all depends on ones risk appetite etc
Hi
There is no fixed Rule for this.
1.Some people put trailing stoploss ( say 10-15 percent from 52 week high)
2. Some follow 10 week ema
3. Some follow Vstop- the intervel is tighned to 2, 1.5 like that
4. Some people take away their investment and leave the remaining like free shares ( as ling as company is growing). There are people who made 100’baggers like this by leaving the free shares like this for years together
So in nut shell, it all depends on ones risk appetite etc
V stop works very well in consolidation phase…you can back test with your stocks by applying.
Anyways as i said, every thing depends on each individual investor way of handling things…no specific rule to follow.
But as we always believe market is supreme…raid it as long as it gives returns , instead of exiting just based on over valuation from fundamental angle
Off-topic but since you mentioned about MarketSmith India, wanted to check if you find that subscription useful? If yes, how so? I was contemplating taking it but thought will check with someone who has used it before and get some feedback? Thanks.
I find it useful. I generally use it to keep track of sector rotation, investible companies and get insight into a company’s fundamental data, particularly EPS growth rate, sales growth, alpha and beta. Although this data is also available from Screener, but quarterly EPS and sales growth is not available. You will have to use an Excel template for getting data not available as default in Screener. So MarketSmith is a convenience.
Do u use their RS score to.invest? Have you invested in their idea list? How much it is correct ? Profitable?
I recently got their subscription.
Their RS rating, EPS strength, price strength and buyer demand all seems proprietary. I do not have any insight as to how they are calculating it, but it seems to work. Their pattern recognition algos are good, although they do have a list of stocks with failed patterns.
They do have two things that may be of interest- Growth list of 50 stocks generated algorithmically which can be a list for stock picks for trading and their model portfolio, which per their data has consistently generated a good alpha. So far, I am not using any of their suggestions, as my portfolio is doing better everyday than theirs. They send a notification about how much their portfolio went up or down everyday.
I am going to re-read William O Neil’s book to see if I missed anything and scour internet to see if I can garner any insight into how they are generating their proprietary ratings and numbers.
KEI Correcting from 5000 levels to 4200 now, Fundamentals not changing!! what is the reason for this sharp fall? any takers please.
It has gone under very high PE re-rating…Now that is rationalising.
I have been waiting for this kind of correction in this stock. I invested in this stock like two years ago at 960 levels and believe be I have been praying every single day since then and regretting that I didn’t buy more.
If the Fundamentals are not changing at it just a price correction, I would love to buy this stock at a rational price. It is not trading at 70PE which is a 40% premium to Polycab which is a leader in this segment. Assuming a benchmark of 50PE for this stock, since sales growth and profit growth is 15-20%, I am keen to buy this stock around 3000 level. Any price below that is a bonus.
Hi Ishu, although i appreciate what you are saying and your willingness to buy this as it corrects one has to consider something very important - how many Indian industrials stocks are there that fit into category of KEI - benefiting from structural tailwinds, Power and Transmission, Housing, Exports, Data centers. On top of that you add the consistent commentary by management around margins and prudent capital management with new capacity coming in next year. The management has so far been clean and if you consider the forward looking multiple it is actually not that bad of a name. RR Kabel, a much more inferior business has been given similar or even higher rating than KEI in the past so I think if KEI continues to deliver the multiple will remain steady unless investors find a very good replacement for KEI in their portfolios
Hi, I am not sure if I understand your pov. Can you please elaborate?
The summary of my point is that in the context of their outlook and the lack of companies that come with such clean managements in the Industrials space in India the severe derating that you are waiting for might be less likely unless something fundamentally changes about this company
But even in cable segment , the total sector has got very high PE Rating. If you do reverse DCF , I think, this may not be sustainable
Its a little tricky phase. With this pace it might very well break 30 weekly ema which indicates sell…but on the other hand, upcoming budget may continue to spend in infra which will need cable and wires extensively which can benefit KEI. Though in general 70PE is considered high for sure. Open for thoughts
I am not expecting a derating as such. Even though this company has amazing fundamentals and a very clean management, I don’t think current valuations are even close to fair valuation.
I am expecting a time correction and let the fundamentals catch up to these stock valuations. And if not, if there is a price correction, that is even better. Polycab, which is a much bigger player in this category, has a PE close to 50. KEI is now at 70.
As of now, price is running ahead of Fundamentals and this is not sustainable.
Exactly, my only worry is that overvaluation can persistent for a very long time. If there is some positive news on Capex in the budget we can again see an upward momentum and the wait for fair valuations will be longer.
KEI Industries has respected 30 Weekly EMA in last 3 years and from that line it has taken support .
