Portfolio of a novice investor

In addition to above stocks, I am also investing in following equity mutual funds:

  1. PPFAS flexi cap fund
  2. Quant small cap fund
  3. Quant infrastructure fund
  4. Quant absolute fund
  5. Quant active fund

The monthly investment in stocks is somewhat double of the SIPs going into these MFs.

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Nice portfolio. One query. How you have calculated XIRR of individual stocks? Currently zerodha provides breakdown where buying date and quantity is provided. So i think, you took that data of individual stocks and then calculated on Excel. If some other technique , pls let me know…

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Most mutual funds are in quant. Isnt it a AMC specific risk? And since quant is using algo model which they keep secret, how you have build conviction to invest in most of their funds?

Thanks a lot! Yes, you are right. I imported the portfolio in the Excel and then for each of the stocks, based on 4 inputs - holding amount of investment, date of purchase, current amount of investment and today’s date, calculated XIRR with excel’s inbuilt formula.

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Well, I agree that it could be a risk that majority of my funds are with Quant but frankly speaking, I selected them mainly because of two reasons:

  1. I myself work in the area where we use data science to create predictive models, so I am aware about it’s power and future. I have watched a lot of videos on YT where Quant CEO mentioned about company’s investment strategy, VLRT framework, how it uses macro economic variables etc. for stock selection etc. Further, they call themselves as theme or strategy agnostic which means they are not bound by one single theme such as value investing or growth investing or momentum investing. They are a bit of everything which I really like about them.

  2. Their track record since last 3 years has been phenomenal and that’s the other reason why I selected them.

Let’s see how it goes! :grimacing:

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Paid Google Sheets available from freefincal, with corporate actions like dividend, split, bonus, rights and buyback, along with purchase and redemption. I am using one. Dividend and bonus are working fine, don’t know about split, rights and buyback. There is a lag in calculation, and the return is not updated in real time.

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You are amazing and a lot of us including me and experts in this group as well need to learn from you.

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Thanks a lot for your kind words. :pray::blush:

Going by returns, all your stocks may have been bought at mouth watering prices, i suspect, in 2020-21. But the best thing is that you have kept them.

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Thanks a lot! Yes, I bought quite a few in 2020. Missed the March April in 2020 down time due to lack of funds but then invested quite a lot in July- Sep 2020. However, many of the companies in the portfolio I bought much earlier as well. For example, Berger Paints and First Source solutions I bought in 2014 and 2012 respectively.

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I too planing to invest in quant small cap soon i found its rewarding investors excellently

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Awesome!! Last 3 years in this fund has been spectacular!! Hope next few years are as good as well.

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Great approach and goal plan :+1: Few questions for learning:

  1. what is the valuation approach you are following to buy.

  2. do you have any custom screeners which can be shared.

  3. capital allocation framework for this portfolio - any changes planned for goal. (Sip vs stocks).

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Thanks a lot for the feedback and queries.

  1. Valuation approach - it’s a complicated question :grimacing:. But to summarise, I try to find companies which are extremely attractive from valuation perspective like all other value investors would do. I don’t understand technical strategies so rather I try to concentrate on fundamental analysis. A few things which I definitely consider are as follows:

a. High sales growth in last 3 to 5 years. It’s extremely important. No matter how cheap the company is, if it’s not growing, I would stay away.

b. High OPM growth in last 3 to 5 years. Increase in OPM over last few years without cutting down on the costs means company has pricing power.

c. High ROCE in last 3 to 5 years.

d. Debt to equity less than 0.3.

e. Promoter holding more than 40-50%.

f. Pledged percentage to be 0%.

g. Growth in EPS on consistent basis and must be higher than current long term bond yield.

h. Free cash flow yield to be higher than 5.

i. Growing FCFF.

j. Margin of safety ( self sustained growth rate > sales growth)

k. EV to EBITDA lower than 5 or 7.

  1. All my screens are public. If you search by my name, perhaps you will get the results. Please note that I change all my screens way too often. Also, I don’t rely on any specific screen. You will find a flavour of all above metrics in variety of screens that I created. Basically I run all 5-6 major screens and find out if there are any stocks which appears in all of them.

  2. Besides MF and Stocks, I have 10% in cash and investment in few ETFs, PPF, NPS etc. With regards to stock investment, I follow SIP approach in the selected stock for at least 6 months to year.

Hope it answers the queries. :blush:

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I used MProfit (https://www.mprofit.in/) to calculate my XIRR. It is easiest and fastest way

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Thanks for sharing this. While Zerodha is very easy to connect with mProfit, brokers like Sharekhan is a nightmare to connect with it. Any views on that?

But its not free service above 50 lakhs portfolio. And also it provides only portfolio XIRR, not individual stock XIRR.

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A few recent additions in the portfolio:

  1. Andhra Papers - valuation looks pretty cheap to me. Though it’s a cyclical sector, I think next 2-3 years will be good for the growth for cheaper stocks like this. I have 2-3 years horizon for investment in this stock. Recent reduction in the prices for pulp will be beneficial for the sector. Few other characteristics which I normally assess in the stocks:
    • Positive and increasing FCFF and FCFE since last 3 years
    • Highest score under fragility scorecard
    • SSGR > sales growth
    • Last 3 years, CAGR under CROIC and FCF / Invested capital has been over 40%
    • FCFF yield higher than bond yield.
    • Most importantly, If we look from equity perspective, over 10 years, nearly 100% of reinvestment rate and company earning nearly 45% return on this incremental capital invested (ROIIC). This means value generation by company by these reinvestments are over 45% but CAGR in stock price is only 6% over 10 years. Furthermore, if we look from both debt and equity perspective, 52% of capital got reinvested and this reinvestment got the return of nearly 83%.
    • ROIC > WACC means company’s EVA (economic value added) is creating value for the company’s shareholders

  2. Triveni Turbines - they are the market leader in turbines industry (nearly 60% market share in India) and has significant growth potential. Invested for long-term.
    • Nearly zero debt
    • No pledged holding
    • Positive FCFF and FCFE since last 6 years
    • Very high score under fragility scorecard
    • SSGR > sales growth
    • FCFF yield higher than bond yield.
    • From equity capital perspective, over 10 years, nearly 32% of reinvestment rate and company earning nearly 34% return on this incremental capital invested (ROIIC).
    • ROIC > WACC means company’s EVA (economic value added) is creating value for the company’s shareholders

  3. GPIL - This is extremely attractive from valuation perspective even now with such a good bull run under this stock.
    • Nearly zero debt. Debt to equity ratio used to 2.1 in 2014 which is now 0.1 in 2023. This is highly appreciable.
    • No pledged holding
    • Positive FCFF and FCFE since last 6 years
    • Highest score under fragility scorecard
    • SSGR > sales growth
    • FCFF yield higher than bond yield.
    • From equity capital perspective, over 10 years, nearly 76% of reinvestment rate and company earning nearly 28% return on this incremental capital invested (ROIIC).
    • ROIC > WACC means company’s EVA (economic value added) is creating value for the company’s shareholders

  4. Shivalik Bimetals (SBCL) - I think much has written on this on its separate thread so not adding anything.

  5. HBL powers - same as SBCL.

Views are appreciated. This is not a post for recommending stocks. Please do your own analysis before investing.

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Value Research portfolio provides a “Return % per annum” which is the XIRR of each investment and of the portfolio as a whole. It’s the most comprehensive so far. Not an automated one but quite easy to maintain and it’s free too.

hi just want to know difference between hold value and current value

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