These are not my top 6 holdings(couldn’t miss out anything over other) but this will definitely be added more into my portfolio as i move on and have good view on it. I current have around 50% of my portfolio in this 6 holdings.
This is in no particular order
All of these have Good management ,Excellent growth and very good future potential
Yes Bank
Cera Sanitary
Cravatex
Gujarat Reclaim and Rubbers
VST Tillers
Mayur Uniquoters
Please post your view on this,i know many of this are extensively discussed in here ,but any new views are welcome here
1). Yes Bank - the stock has done nothing in the last1.5- 2 years. It is languishing lower than the highs toughed in Oct 2010. So for someone staying put in the stock for the last 2 years, you have gained very little.
Another story on the same lines is Opto Circuits. You have gained precious little by staying invested.
When I used to talk about these kind of stellar/somewhat pedigree stocks, a market veteran (Ayush’s Dad) used to confront me with 5 yr charts for these stocks. Look at the Price chart of Yes Bank for last 2 years and you will see what he meant. I reasoned that for a well-discovered stock all expectations get built into the stock price, and it becomes difficult for it to keep outperforming.
In contrast, you will see a very different price-performance chart for most of the other stocks in your portfolio.
2). Cravatex - Disclaimer, I have not pursued the stock beyond the initial work at ValuePickr. I believe for the kind of brands it owns -Killer, Lawman,etc, and its business profile a P/E of 20x (TTM) - is fully priced. Difficult to see a 25% CAGR from these levels in the next 2 years.
Form a Capital allocation perspective, a 25% CAGR is a must for me.
Donald, in Cravatex, I have more than doubled my money in the last one year. I remember having the same discussion with you that time and you pointed out about the relatively high PE.
It has gone up 1,791% compared to 23% for Sensex!! It does go through months of consolidation but the general price trend is upwards. Also, the stock has poor liquidity and very high volatility. But the opportunity space is high and even if it can get to a number 4 position in the sports shoe market, after Adidas, Nike and Reebok, it will worth much much more. No reason it cannot. FILA, as a brand is getting resurrected in the dominant markets like US and Europe, so it may see a rub off effect. Add to it the gym equipment business, which is also growing and there is decent prospect in the future.
Prabeesh, other than VST Tillers, I have all the others in my portfolio, so hope your portfolio does well
Donald Sir Lawman ,Killer belongs to KKCL another company.
Cravatex is just a trader the margin is 5-6 % .It’s getting PE of 20 just because of consumption boom otherwise It would trade half of the CMP. Also I donot see fila as a aspiring brand .
Hey Abhishek and Shashi - Thanks a lot. Shashi - please drop the Sir - I am a fellow traveller - very little market experience!!
Sorry for the confusion. In my mind Cravatex and KKCL occupy the same bias - 2nd order brands that looked expensive (to me), and there were unanswered questions.
Since Cravatex has done so well in an uncertain last year, there is something in that story - that needs revisiting - may be clear my bias, by trying to undrestand more of the business.
I looked at this useful Price History table of Cravatex
As Abhishek says, there is huge volatility in the stock. Every month there is a big gap between the highs and lows - sometimes as much as 30%. There are many stocks with low floats, but not this volatility - that can’t be the reason (my experience has shown low float with steady performance, has worked in favour of the stock almost always). At the same time, the movement has generally been upwards!!
Like more comments from Prabeesh, Abhishek and others who follow this company. May be a good time to revive the discussion in the Cravatexdiscussion thread.
@Donald while i agree there is huge volatility with respect to cravatex it has largely been upward. Yes liquidity due to low float is a major concern,but i think this is still not explored business by big investors.Once they come in this should solve the issue.
And i don’t expect this to give 25% CAGR. My estimation and future CAGR is always capped at 15% CAGR
Thanks for the flag up again on Kaveri Seeds. As you said it has outperformed in the last 12 months. We should revisit the story - but has it got over-priced already??
sir, i have been having close look @ cravatex for last 6 months, i have looked at all the positives of stock, but can u give things that go wrong in this company, after it is a small cap stock it has already been 6 bagger for most the investors ,the reason fo asking such question is that there no exit door in small caps if things turn out to be bad…
The biggest risk with shoes retailing company is inventory pile up. This is the single biggest reason in the past for the failure of this kind of retail company.
Cravatex has many lines of revenue which kind of eliminate the risk of over dependence on shoe business.
@zulfiqar: The risk is Cravatex is IMHO related to management capability and the FILA brand to garner some marketshare & mindshare. If it fails to expand and grow, it will automatically die its natural death and the stock will have a severe PE contraction.
To my mind this is NOT a bet-your-house kind of stock. It’s more like a take-a-small-chance-and-wait-and-see!!
