Agree that the path to multi-baggers is riddled with some losses and its best to take out money early.
But my point was that a portfolio of some compounders and some potential multibaggers could be the right balance. It
** an OR situation but an AND one.
Yes most of high moat companies are trading at full valuations and will only be compounders. Some good moat companies are trading pretty cheap (Hero, Exide etc.) but are facing serious issues. If they overcome these issues, they could give good upside with low downside.
I think the hero motocorp story may be over due to the stiff competition provided by hmsi and other players.
Exide is a very interesting story to follow. A great wealth creator in the past and a company operating in a duopoly market, it needs to be bought when the chips are down and things are looking gloomy. Once the auto sector starts looking up this could provide good returns.
HiteshSir. Hero is still perceived to be a low maintenance bike. My friend bought one recently and he was telling me that there is lot of rush in that particular showroom even on weekdays. Its rural presence is the best amongst all 2 wheelers. Add to that the export potential. With increased competition, an investor should seek more margin of safety. But I didnt quite get why are you writing them off.
the onslaught by the honda bikes and other japanese manufacturers will be difficult to be weathered by hero motocorp. Plus high base effect is going to play spoilsport for hero motocorp. Difficult to see hero motocorp maintaining strong growth rates.
At best I think it will be a stalwart in Peter Lynch parlance.
supratik, there is never a price that is comforting for any stock especially growth stocks. depends on your timeframe. they have increased their prices by 5% in nov 12, that full impact will be seen in Q4. Also cotton prices have fallen recently. in recent budget GOI has removed excise duty but page wouldnt pass on that benefit to consumers. they say jockey or nothing. so consumers would keep on buying their products. speedo sales may slowly add to their top line, we need to watch this summer how it comes up
overall they dont want to grow beyond a number even if they could, instead they spend that money in curbing their compititors (more ads). its a steady compunding machine where we can put huge money and sleep well
its a buy on decline. always wait for opportunities. its jockey or nothing for them, but for investors like us its page or something. stocks like page, hdfc bank always give a second opportunity to enter at good price, wait for it if you have patience
page continues to amaze even at such low growth environment. YOY growth of 33% indicates that the growth may be coming back now. this is despite the benefits of excise duty cut not yet coming through which we should see from Q1 this year which should help the profit growth. this remains a core portfolio bet.
Trailing PE of 43 for a 25% grower(last 2 years)ā¦isnāt it a little too much to pay for? What is the gain one can have in next one year if one enters nowā¦I feel not more than 15%, unless something wild happensā¦
i think market is looking forward with expected growth of 30-35% over the next 2-3 years. page is a stock to be bought on any 8-10% dip and held for long. this one will not give you multibagger returns but is a stock where you can put large amounts of money at work without losing sleep over possible losses.
Trailing PE of 43 for a 25% grower(last 2 years)ā¦isnāt it a little too much to pay for? What is the gain one can have in next one year if one enters nowā¦I feel not more than 15%, unless something wild happensā¦
Thanks Hemant for your response. I have been buying it since 650 level, but reduced it to just 12% of my portfolio recently. As you suggested it is a great compounder but not one which can be a multibagger in a hurry. Since capital is always limited, I have put more in others which have better potential in next one year.
Net Sales up 39.4% to 304.1 Cr from 218.12 Cr.
EBIDTA up 36.3% to 63.7 Cr from 46.73 Cr.
Net Profit up 31.6% to 43.11 Cr from 32.76 Cr.
EBIDTA margin is 21% v/s 17.6% (MQ-13) and 21.4% (JQ-12)
NET Profit margin is 14.2% v/s 11.3% (MQ-13) and 15% (JQ-12)
Total Raw material costs as a %ge to Income is 50.3% v/s 49.1% (MQ-13) and 50.1% (JQ-12)
Employee costs to Income is 13.6% v/s 19% (MQ-13) and 15.1% (JQ-12)
Other expenses to Income is 15.3% v/s 14.3% (MQ-13) and 13.4% (JQ-12)
Financial costs to EBIT is 3.1% v/s 8.8% (MQ-13) and 4% (JQ-12)
Tax Rate 34.2% v/s 31.3% (MQ-13) and 33.4% (JQ-12)
EPS 38.65 v/s 29.37
Recorded TTM (sum of 4 quartr) diluted EPS: Rs. 110.17
At 12:25 pm on 08/08/2013, stock on BSE trading at Rs. 4467/- up 3%
In an environment, where some of the biggest brand plays are struggling to achieve double digit growth, achieving 39% top line growth is very impressive. Consistent delivering of such impressive numbers justifies the premium valuation this stock commands.
Recently I went to a couple of sport shops in Chennai. I enquired about the customer response for Speedo. One of the shops was just 2 months old. The owner said that initially he stocked some cheaper alternatives of Speedo but the customers always ask for speedo. Now he stopped the cheaper stuff and almost only has speedo for swimwear/accessories. Even the other shop owner said that the Speedo is very famous and the sales have been increasing continously.
Btwā¦I managed to buy a very small qty at absolute bottom of 3850 during last month. Wanted to add more but Page shot up to 4400 again. I plan to add below 4000 if I get a chance.
Yes, sub-4000 Page is a good buy, esp if one is looking to slowly accummulate consumer facing brands with strong pricing power as evidenced by Page. and the time horizon is long 10+years (not that pageās 2 year or 3 year returns are any worse). Itās certainly a better buy than buying Nestle or GSK at similar valuations for the long term, but at half the growth or half the Return on Incremental Capital invested in the business (that of Page).
just on this one count, Return on Incremental Invested Capital - you take 1 year, or 3 yr, 5yr or 10 yr periods, Page beats every brand with pricing power hollow. If anyone can find a better example than Page on this crucial aspect, please alert me! As per the Guru - the best long term business to own is the one that can keep employing higher amounts of capital at higher return on invested capital - and all the hallowed brands like Nestle or GSK consumer with Horlicks etc or Colgate, pale in comparison to Page!
I am a late convert, and I donāt like paying up hugely, so will keep picking up Page at every decent fall and really load up the next time at the big Crash. I wonāt be confused over which business to pick up like last time - when everything was screamingly cheap in 2009!
And I will finally get around to doing my local shop surveys - why have all of them (in Kammanahalli, Bangalore) changed over to Page. About 2 months back I suddenly found 3 shops in the same neighbourhood (non Jockey guys for last 10+years that I have seen them) -a prominent 40% of the shop getting devoted to Jockey branding.
