The company looks strong on several fronts, including a low debt-to-equity ratio, significant fixed assets, and its highest YoY profit, with TTM profits continuing along the same trajectory.
However, the stock price is currently at an all-time high and appears to be in Stage 3 (consolidation at upper levels), which could be risky. If demand remains steady or grows, the Stage 2 (bull trend) may persist.
While profitability has dipped due to rising material costs, the company has managed to control other expenses. Additionally, 20-30% of its income comes from non-core sources.
Are you talking about India Gelatine or something else? As it is not trading at an all-time high currently, rather the other way around if we consider the last one year.
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I think the spam is because of the name of the topic. I myself thought its a thread where people post smallcap stocks with triggers instead of portfolio QnA until I read this post. Would have never guessed that.
Alright folks, time to address the sloth in the smallcap space?
May be the post is not related to specific names but intentions to learn and identify smallcap indices direction and some views on smallcap space as a whole.
Since many weeks, ~8 weeks , the index has gone into consolidation. the PF which is 90% small cap hasnt gone anywhere…contrary to nifty50 which saw continous rise during this period
it seems smallcaps are on a slow grind, which i didnt observe in past 2 year.
While the picture is all rosy,With the FED rate cuts and all this liquidity in the market, I’m starting to wonder: are we being hoodwinked here? Are we at the top, with nowhere to go but down?
What are the other understanding or observations on this.what do you hear on the smallcap space as a whole ?
I’ve been used to continous action and excitement for so long. i am like, on a withdrawal symptoms !.
Mid & Small cap fund houses are sitting on cash right now expecting a correction after a strong run of 1-2 years. It can start correcting from tomorrow or even after 6 months… who knows. But indicators are there that a correction is likely.
Were you not in market between Jan 2022 to March 2023? see how long it was sideways ?
After a run up like we have had in past 18 months , it’s very ok if it goes sideways for a while. Mutual funds are just as dumb as us …this sitting on cash thing has been going on for 12 of those 18 months . It’s likely there will be some sector rotation and some money might move from small caps to large caps but whether it will correct by 30% as it did in 2022-23 is anybody’s guess . Nobody knows anything … it might fall tomorrow and it might run for further 3 years …who knows ?Be aware of doomsday prophecies ….they just sound more impressive but are just as accurate as the optimists …
Disc …70% portfolio in small caps …not running after high fliers but not running away nor sitting out .
As someone who invests a lot in small caps and has seen many up and down cycles, my take is that corrections should be expected and welcome and NOT feared by retail investors.
Thing with small caps stocks is that when they are in a bull run and making new highs every week or month, no one stops and wonders if it’s normal for a stock to give 2-3x returns every year when underlying earning growths are nowhere close… Or how much story market is pricing in and how much of price is just bubble.
In bull markets many take those crazy stock prices rises as a given and not a matter of concern. And when money starts exiting at insane valuations we feel scared (instead of being happy) thinking something is wrong with the market.
So it’s a problem of expectations. Mean reversion is par for the course for stocks and over a period of time, price corrections will happen for every stock to reduce gap between valuations and earning growth. At the same time companies with earning growths will never disappoint their investors regardless of the market cap, interest rate cycles, fed actions, liquidity etc.
So if one is confident of their portfolio companies doing well on earnings, they need not be afraid. Even if the stocks correct they will recover quickly to make new highs. However if one just bought the stocks because they were running and big (or dumb) money was chasing them, then one needs to be very cautious because without conviction fear can take over very quickly resulting in all sorts of reaction to news flow.
I generally welcome corrections because it allows me to buy more of the stocks that I have in my portfolio and increase my allocation at lower prices in case I missed out on betting big on a good opportunity.
So what happens with many of the scrips under ESM is that there are fixed times when the order can be placed. Maybe Emerald finance is also one of them. The time duration is 45 min starting from 9:30, for placing orders then the next 15 mins is a gap time and so on…
All these stocks have made huge gains for investors who rode on the promise of new and renewable energy. And suppose we keep seeing poor historical performance without seeing the tailwinds and the reasons for the turnaround. In that case, we will end up not investing in future-oriented stocks and be happy with HUL, Tata and Nestle. Just my 2 cents.
