I have the following Portfolio and I would like to bring it down to 15 stocks for long term wealth creation. I have been holding most of them from much lower levels except for Edelweiss, Neuland and Strides. Can you please help me trimming down the number of stocks:
This is how the the sectoral allocation looks:
PS: All allocations are based on CMP as on 2021-10-06
You can at least trim one of the Bajaj holdings. Do you see enough value in the insurance arms and cumulative data collected by parent to use for all its subsidaries or do you want to play NBFC cleanly.
You have Pharma overweighted… Can reduce some… I see huge potential in Laurus n Syngene, Strides only for Stelis… rest you can take a call…
Below is more info on how I stand currently and reason for initiating the stock. Hopefully will give you more info on my thought process and hence you can guide me better.
Bajaj Finance is a Free Holding for me i.e., Booked 100% profits in this stock and remaining is free of cost. I do believe in the NBFC story of this, but not sure how long these values will sustain.
Reg. Bajaj Finserv, I initiated this due to the Insurance theme and recent proposal of MF business seems bonus to me.
So, if I have to get rid one of the above, it would be Bajaj Finance.
I am playing Strides due to the Stelis demerger, will get out of this and hold Stelis for longterm once it is listed.
Not sure of which one to get rid of: Piramal Pharma (Leader in CDMO, after demerger) or Neuland or Sequent ? As each of them have good long term story behind.
CDMO of Piramal pharma is 13th largest globally and in top 3 in India, and Neuland is a niche play for API. Both are at decent valuations compared to Sequent which is richly valued even at current levels for FY23 expectations.
Nothing against Sequent specifically, but I do not see as big an upside in it compared to the other two, it may keep trading at rich valuations but a slight jerk in performance in any qrtr will bring it down from those rich valuations (case in point Q1 Fy22). I think with all the media chatter around Sequent it seems un-necessarily overdecorated even at current levels.
Piramal and Neuland have huge runway and enormous market to cater to & expand into. Can’t say the same for Sequent, although it will keep growing with decent rate and will get decent margins as well. The animal Pharma space is also quite big but globally there are much bigger and better players and sequent has a lot of ground to cover to get there but market had already priced in a much larger company few months back.
If I were in your position, I will not sell off either of these but if insisted I would have exited Sequent and held onto the other two. This is my personal opinion and not investment advice. I have already done it. I sold off Sequent when it reached 240+ levels in Feb 21. I will be happy to buy back again if it goes below 150-180 levels hopefully in next 2-3 months.
Disc: Neuland and Piramal are part of my core holdings.
What is the reason for huge fall in Neuland? Only because of results? Am tracking Syngene and Neuland but just curious on any ongoing issues in Neuland…
After the last concall (before the recent results) everyone thought Neuland had good control over its supply costs of raw materials and costs involved but unfortunately recent results showed they still did not overcome old issues related to raw materials & costs involved. Also delays in new product approval caused fall in the stock price.
Thanks Rishu, will consider selling Sequent when it is above 240.
Strides management has not given any clear direction that they have decided on Stellis demerger. Recently, they said that they are looking at all available options. Hence, not sure if demerger theme will play out.
I’m also holding stellis at almost the same price as yours and the same thesis as yours
You have great stocks, and a good mix. If you feel your allocation is too high on some, just trim it, but I would say that if the size of your portfolio is large, then leave it alone. Trim ONLY when you feel something is overvalued or has management issues, but do not trim for the sake of some discussion saying 1cr portfolio should have 10 stocks, and 5cr portfolios should have 15 stocks. It is too arbitrary a decision and not too much of modeling between long term bull/bear and short term bear/bull markets have been done that hold credibility.
Not writing more since moderator will say ‘not relevant’ to the topic.
IMO kkpatel has given excellent advise. I too have an unwieldy portfolio of now 54. Earlier it was 62…have exited 8 when I felt the stocks had run up in the rally.
I am making my portfolio less beta. Exiting most global commodities and cyclical stocks.
Have trimmed Bajaj Finserv to 5%, now my entire holding in this is Free holding (profit booking of 310%).
Increased holdings of Edelweiss to 13%.
Holding 15% in cash to deploy on further corrections.
Considering to add Jubilant Ingrevia and Deepak Nitrite
Entered Jubilant Ingrevia, Solara Active Pharma and PI Inds.
Increased holdings in Laurus and Sequent.
Done some profit booking in Marico - Remaining Qty is Free Holding
List of all Free Holdings in my PF:
However, sitting on 23% losses in Strides
I have a very short suggestion, since you want to trim it down to 15 stocks, sell whatever you are uncomfortable holding more than 5% in PF. I use this simple metric to keep my PF below 20 stocks. Good luck !
Considering to exit Edelweiss above 90 which is about 13% of my PF
Waiting for results of Strides to decide on future course.
Have been constantly accumulating Strides, Sequent, PI Inds and Edelweiss.
Had to offload SIS and Jubilant Ingrevia for lack of free cash and also because I see more opportunity in above.
Have you looked at Piramal Enterprises. This would give you similar opportunities as your recent entries.