ValuePickr Forum

somu0915 (Somenath's) Portfolio

I wanted to post this on 30th Sep but dosen't matter in few days. Here's my portfolio:

Stock Buy Price Current Price % loss/gain % Allocation
Thomas Cook 100 148 48 19.4
VA Tech Wabag 801 1459 82 8.3
Monsanto India 1930 2845 47 7.5
Jubiliant Foodworks 1072 1319 23 6.9
Kaveri Seeds 800 956 20 6.2
Avanti Feeds 904 1422 57 5.9
Kitex Garments 319 366 15 5.8
Suprajit Engineering 45 131 191 5.5
Marico Kaya 545 696 28 4.2
Mayur Uniquoters 259 457 76 4.0
8kmiles Software 195 347 78 3.8
Gruh Finance 97 201 107 3.8
Berger Paints 279 352 26 2.7
Ajanta Pharma 590 1661 182 2.5
Ybrant Digital 36 56 56 2.3
Relaxo Footwear 189 470 149 1.8
Escorts Ltd 130 135 4 1.7
EPC Irrigation 167 215 29 1.6
Nath Bio Genes 110 147 34 1.6
Excel Industries 254 301 19 1.5
Shilpa Medicare 418 547 31 1.4
Poly Medicare 770 750 -3 1.0

You, my friend, face the same problem like me. Way too many stocks in the portfolio. Im trying to cut down from a non-sensical 22 to a more reasonable 15. Ive noticed that having so many stocks in the portfolio leads to laziness and you end up with too many stocks with too little conviction. The main disadvantage is that it becomes difficult to take advantage of corrections because your conviction level is not high in any of the names.

But I myself need to practice what I preach!

Agree with Abhishek. You should cut down on number of scrips. Go through the capital allocation thread on VP. My advice would be to limit your portfolio to less than 10 scrips the ones with highest level of conviction. Think through as to why would you have Kaveri and Monsanto both in your portfolio. I do not understand the rational of buying Kaya at 545 and Poly Medicare at 770.

Most of your stocks are decent ones bought at a very good price. I’m not sure aboutJubiliant, 8kmiles , Ybrant , Escorts, EPC Irrigation though. Also read Donald’s recent comments on Poly as I also think the price is too high now.

I don’t necessarily think that one should limit number of stocks in one’s portfolio for the sake of doing it. In my experience, It’s quite possible to make decent returns with many stocks in portfolio with good diversification and minimal downside risk. It should depend on the availability of a quality stock and your conviction on that. Pitching the stocks in your portfolio against each other is a very good mental exercise though.

@Abhishek:

I have around 75% of my portfolio in 10 stocks and around 88% of my portfolio in 15 stocks â So that should be fairly concentrated. I do have some stocks which I intent to hold for 1-2 years and are sort of trading which generate capitals for long term top 10 stocks.

These stocks are:

8kmiles

Ybrant

Kitex Garments

Poly Medicare

At any point of time my top 10 stocks are the high conviction ones and since I have crossed that limit when my salary savings are not enough to contribute significantly as cash inputs to portfolio, I do not have any choice but to trade 1-2% of some of my holdings for cash generation.

Again, with due respect â Everyone has his own style. When I started back in 2008, I had almost 50 stocks in 2010 at one point of time. Currently I feel confident in this style.

I guess concentration comes with a lot of experience in markets. Hopefully in next five years I have developed conviction to hold 5 stocks with 15% allocation to each.

Views Invited.

@Anant:

I made a 3 bagger in Kaveri and took out some profits to invest in Monsanto. I feel the size of Monsanto is miniscule in India and will be a huge multi-bagger. I like both and hence both of them included in my portfolio. I wish to have a combined 15% allocation to both. Its hard at this stage to choose one from both of them but if I feel at later stage one is more over-valued or business is degrading, I will try to switch into other one.

Poly-Medicure is a trading bet.

I know I have bought Marico Kaya at a little high price but I am betting on good management here. I think it will do good over time, and with very bad experience (Arshiya) have learnt to indulge in better business with fair price rather than buy some xyz at good price. Time will only tell. But I am ready to add more to Marico Kaya at declines.

Portfolio as on 30th Sep 2014:

Stock % Allocation Buy Price Current Price % loss/gain
Thomas Cook 19.0 100 144 44
Monsanto India 9.3 2084 3040 46
VA Tech Wabag 8.1 801 1687 111
Jubiliant Foodworks 6.8 1072 1231 15
Kaveri Seeds 6.1 800 811 1
Kitex Garments 5.9 331 496 50
Avanti Feeds 5.7 904 1667 84
Marico Kaya 4.2 545 602 10
Mayur Uniquoters 3.9 259 446 72
8kmiles Software 3.7 195 518 166
Gruh Finance 3.7 97 192 98
Suprajit Engineering 3.4 53 129 143
Berger Paints 2.7 279 379 36
Ajanta Pharma 2.5 590 1731 193
Relaxo Footwear 2.4 222 478 115
Ybrant Digital 2.3 36 65 81
Escorts Ltd 1.7 130 152 17
EPC Irrigation 1.6 167 191 14
Nath Bio Genes 1.5 110 147 34
Excel Industries 1.5 254 296 17
Shilpa Medicare 1.3 418 555 33
Poly Medicare 1.0 770 825 7





Cash 2.5


Not sure if Jubilant is growing as much as it was growing 2 years back. Its price has been range bound (1000-1300) since last 2 years.

You’ve any reason to keep it as a part of your PF ?

Pizzas are here to stay for a very long long time.

I am very much content if it gives 15-20% compounded returns for a decade or more.

That is the only reason to keep it in portfolio.

Gruh and Berger fall into the same category. I am very much happy buying these slow compounders over a long period of time. You can buy a large quantity over a period of time without the risk of loosing capital with these stocks.

You have selected few good stocks like kaveri, kitex, gruh, mayur, berger, suprajit, polym. But due to other stocks, your over all returns per year will be diluted.

If some stock don’t perform till 6 months and more than exit from that stock and divide that amount in rest of all stocks. you can’t stay with stock just like that for 2 years on jubilian. If this stock gives 20 % returns in 3rd & 4th yr than still your gain is 42% max returns in 4 years which is very less returns.

Thanks Amit.

But I don’t quite agree to your comments. What you say is trading and not long term investments.

Moreover I don’t see a stock in 6 month - 1 year view.

Like I said earlier-I am perfectly fine to hold 5 years, a low growth stock but where there is a good probability that the business will not vanish but grow slowly.

Hi Som

Nice stock selection but if you are looking for compunders why not add something like atul auto, lupin/ipca/alembic pharma etc in your portfolio?

BTW curious if your rationale for investing in Jubilant was more from dining theme perspective? wouldn’t speciality restaurants be a more safe bet here?

Hi Som

Nice stock selection but if you are looking for compunders why not add something like atul auto, lupin/ipca/alembic pharma etc in your portfolio?

BTW curious if your rationale for investing in Jubilant was more from dining theme perspective? wouldn’t speciality restaurants be a more safe bet here?

Hi Sreekanth,

Yes - Jubiliant Foodworks is a dining theme. I do not see Pizzas vanishing from India in next 50 years atleast.

I will not choose speciality restaurants because of obvious reasons that I can’t see the predictability in speciality as I can in Jubiliant.

Dominoz is a global brand across the world with many tier-3 cities still untapped.

I am from a small town and a dominoz has opened in my town 2 years ago - Whenever I go to my place, I can see waiting outside dominoz.

It is a play on the rising levels income. Sure I admit it is not growing at a fast pace - But I cannot see the business going down the drain. Its only a matter of time before it will catch frenzy. I can see it growing at 20% for next decade. I can’t see Speciality do the same.

And that is the reason for keeping it in portfolio and not Speciality Restaurants.

I already have Ajanta Pharma in my portfolio and its a wonderful stock. Its inclusion in A-group is certainly a big big positive. I am positive on Alembic Pharma, but can’t see a suitable price for entry. Will try to take a look at correction. I am also mulling to add Ajanta at current levels. I see a PE-rerating on this one.

Jubilant just seems very costly as compared to its growth. Any dip in growth takes the stock spiraling down. I used to hold it during its IPO days but got out of it when momentum stopped and same store growth started lagging.

Som

True that dominos has an established brand presence and pizza is a stable consumption theme…

But if you see the philosophy of the management that something i have not been comfortable with they have been too hasty in expansion of new stores to catch the consumption theme. Once they have grabbed the market share, the delta incremental growth is lagging mainly as the footfalls in same stores are starting to be a big drag on their margins.

As against this what i liked about speciality was the very essence of its fine dining concept where expansion need not be too much rapid and the core essence of growth will be coming from profitability. The management has also been very conservative in not to expand into many restaurants and focus more into its restaurants adding value through new themes/new menus etc

Regards

Sreekanth

Request seniors here to comment on Thomas Cook. It has corrected quite a bit now. Is it a good time to enter?

Ignore the above comment. I overlooked the company name.

Sreekanth/Deepen,

I admit to your comments.

I also admit that management in Jubilant has been expanding mindlessly and this is causing drag in same store sales.

Deepen - Any dip in growth taking stock down will be a happy buying opportunity.

It is my personal opinion that the opportunity is huge here. In my opinion you cannot measure every company by same yardstick. That’s why its art and not science. I will still look at the growing income and the young population of India which provides immense potential to this theme.

When it comes to management yardstick, yes I admit its not in place right now. I will still give it time and add it on declines. You need time for a good business to pick up. It is not a one year or two year story. I will still stick with the leader which has replicated its success in countries over the globe.

Above are my personal opinions and a market is made by different opinions only.

Updated Portfolio as on 31st March 2015: