Thank you @Pragnesh for your great insight. Do you track faze three ? If you do, would love to hear your view
Not studied yet but will study
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Adding anup engineering
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@Pragnesh Tinna Rubber & Monte Carlo somewhat also fall under your investment philosophy… what’s your views on these 2 stocks…
I have not done study
I have already mentioned (post 21) that jenburkt and auro lab has not any moat.I have completely exited from jenburkt pharma with 13% loss .I invested that money in apcotex,kei and astec
I may be wrong about jenburkt, lets see
Peter lynch quote
"THE BEST STOCK TO BUY MAY BE THE ONE YOU ALREADY OWN
=Because you had learned industry and its behaviour in recession, you can buy same stock when its price fall
=A stock u have bought 2 yrs or 10 yrs before may be worth buying again "
Thats why i invested in apcotex,kei and astec
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Paushak
Few imp points from annual report 2022 and credit rating july 2022
Rebalancing of portfolio done
Stocks which i bought in my early career without moat were sold
1…Jenburkt pharma(13%loss)
2…Rajoo engineer(38% loss)
3…ice make refrigeration(52% profit)
4…Auro lab(17% profit)
From that amount, i bought
1…Astec life
2…kei ind
3…Apcotex
4…moldtek pack
5…Paushak
I was keeping these stocks with some hope that sometime in future they will give return. Holding since 3 to 4 yrs.I was knowing that these stocks dont have significant moat but as i had previously mentioned that i am always reluctant to sell.
Then i thought about peter lynch quote
"THINK THAT IF PERTICULAR STOCK FALL BY 50% AND AT THAT TIME YOU WILL BUY OR NOT.
IF ANSWER IS YES THAN HOLD STOCK OTHERWISE SELL IT IMMEDIATELY"
Second reason to sell ,i think is when you lose conviction in company otherwise you will not hold when it is down.
=E.g. i dont have conviction in auro lab and i did not sell at when it reached at around 195.And lastly i have to sell it at Rs 80.
=But i have conviction in LT foods and i did not sell it when it reached at Rs 13 during corona time and even i bought at Rs 20.
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Hi Pragnesh,
From your sold list, I had a look at ‘Rajoo engineers’. I found it no that bad… I mean good financial ratios and increasing revenue/profit… but yes, current result is not that good. Also the company’s growth is not very fast, but considering the upcoming financial cycle, this sector is supposed to do well.
Just wanted to understand your reasoning for selling.
Thanks,
Satyajit
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Ban on plastic is main reason for sell
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OK, got it.
But pardon me if my understanding is not correct. I thought not all the plastic products under ban, only selected few likes of plastic carry bag etc… Also as I understand Rajoo involves in producing machinery to create plastic products. I didnt do much research but seems like banning plastic (if only few kind of plastic products) would not be a grave concern.
I could be wrong as well… 
Thanks for responding.
Rajoo eng. A.R 2021
The most critical, challenges that Indian plastic industry is facing today is the “image of plastics” and unmindful ban on some plastic
products in some states in India. Some of the myths perpetuated about plastics are:
- Feared as being toxic
- Maybe harmful to the soil
- Could cause acid rain
- Is not environment friendly
- Has high carbon foot print
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Hi pragnesh,
I have been tracking apcotex for some days. Actually, I found its financials, Sales growth, Ratios, etc. lucrative. I didn’t deep dive till now. Can you help me understand its products use case? What is the use case of Synthetic Rubber and Synthetic Latex?
Thank you.
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Hi Pragnesh, you sold rajoo engineer at 38%loss. I am feeling myself stuck in some investment and currently at 30%loss. How did you get courage to sell it at this % of loss. Any framework, mental model or anything else which you can share.
Thank you
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Selling is aways difficult for me.
But it was not performing since begining(profit,not stock price)
dear pragnesh,
your views on the cash flows of last 5 years of racl geartech
|Cash from Operating Activity : 5, 19, 33, 39 & 12 Cr respectively
|Cash from Investing Activity : -13, -31, -26, -49, -56 Cr respectively
negative cash in investing activity more than cash from operating activity is concerning…
See
There are 2 things
1…Cfo should match PAT of last 10 yrs
This will give us idea that cash is not stuck in receivables, inventory etc
2…Free cash flow
=When you invest in growth companies,fcf (CFO-Capex) will be negative in most yrs
=When companies have good cash,they have following options
A…Dividend
B…Buy back
C…Acqusition
D…Cash on balance sheet
E…Invest in Capex for future growth
When companies dont find growth option,it is better to give dividend or buyback
However,when ROE>15,and companies find better growth opportunity ,then better to invest in its own growth story(capex).This will give negative fcf
…
On the contra view, one dark side of consistent negative fcf is
=If company manipulates operating expense into capital expense, then profit will inflate and fcf will be negative
=So there should be genuine expansion
And one suggestion
See “fixed asset purchased” in cash flow rather than cash flow from investment for fcf
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Added Ion exchange
Ion exchange aug 2022 concall
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I really like this post from valurpicker and learned that sometimes best stock to buy may be already you own eventhough it may be 2-3 times higher than your initial buying ptice.
I recently added following stocks after 200 to 300% rise.Lets see what happens to them in future
Kei
Apcotex
Moldtek
Paushak
Astec
Ion exchange
This is post of Anurag agnihotri from “My mistakes with stock market”
“I still own Pidilite, now 5500% profits, goes to show what holding a stock for a long time can do to your money.
So here’s the second mistake. I bought a very low quantity of Pidilite and never added it subsequently, funnily because any new purchase would have increased my average purchase price. Ego over money
So ya, 5500% looks good as percentage.”
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