Stocks for the long and short term portfolio

[jamit_05]

Hi Jamit_05!
What do we do now? We wait for your further inference. Thank u.

Well, for starters if you are invested in LT then it is time to get worried and go back to the planning stage. Re-look the reason why you purchased LT. Are those factors still in place? Most probably not.

Then look at the sector. Does the sector hold any promise?
I don't think so. The sector leader is in shambles.

If the sector had any hope, I'd suggest you move on to the next best company in that sector. But that is not the case.

Cummins India, Siemens, Bhel are all very nice companies. But, the sector has more pain left. More PE re-rating is on the cards.

 

[Pradipjee]

Jamit_05!

I value ur suggestion. Thank u.

 

[Einstein]

Investing-Research is a very interesting process.

After "Project LT" I have found motivation to go deep into the Reports of the leading Banking companies to understand their structure.

I hope, at the end of this project I will be able to, quantitatively and qualitatively, tell the difference between HDFC, ICICI, AXIS and SBI.

Much thanks for the kind words.

rather look for assets heavily sectors like metal and manufacturing sector. they are oversold, heavily beaten and boring stocks as per market.

 

[jamit_05]

Banking sector is an interesting one. It is very different from other sectors. For one, even decent banks almost always have operating cash flow. Banks are never strapped for cash. But, they have their own share of pitfalls.

Once, we are through with investigating the "Popular Ratios" of ROE, ROA, CASA%, NIMs, NIIs, CAR% etc, our work really begins. The entire investing world sees these ratios. To be successful, every craftsmen must have his original perspective which is aware of and immune to the a wash-out done by the company's management, broking houses and all intermediaries.

Will start a detailed analysis of Axis Bank next post onwards, but will introduce it here.

Axis Bank has all the important ratios set very pretty, but a notch below HDFC.

Ratio, Axis, HDFC
ROE 15.8, 18.7
ROA 1.5, 1.7
NPA 0.4, 0.2
CAR 17, 16.80
NIM 2.90, 4.20
CDR 78%, 83%


Yet, what makes Axis attractive is its PE ratio of 10, whereas HDFC goes to 20 plus. You can find explanation of ratios all over the internet. So I won't expound further. These only go to show that the bank is comparable to HDFC Bank, which is an epitome of an Indian Bank.

So, fine Axis is good and cheap? But, is it good enough to allocate 5% of our capital? To answer this question, we will have to look deeper into its model of business and its source of capital, which will tell us its cost of funds. We will find out whether Axis is generating real cash in amounts comparable to HDFC or are they just pretty numbers to go for equity dilution once every five years (A Red Flag for ADAGs here).

This work very interesting I must tell you. Will keep you posted.

Ciao.

 

[oilman5]

Amitji,..........can u show some light on Ranbaxy...........how bad is really?
i plan a speculative long on it. .......aprx 10%, recent fall 33%

 

[jamit_05]

Amitji,..........can u show some light on Ranbaxy...........how bad is really?
i plan a speculative long on it. .......aprx 10%, recent fall 33%

There were two companies on which USFDA imposed bans. One was wockhardt and the other is Ranbaxy.

The first time when ban was imposed on Ranbaxy, its share price fell strongly. But, soon recovered as it got the ban revoked. Now, this is the second round. And price has fallen again. It may recover, or may not.

Therefore, I find Ranbaxy very volatile. The kind that can give me Acidity. So, I suggest don't even bother with its fundamentals. Same with Wockhardt.

So much for fundamentals. For speculative gains, I have not idea how would one go about it.

 

[oilman5]

gambling with strict stop, buy near last fall value, hoping fund manager average.

 

[oilman5]

Amitji..........after today ,do u feel shortterm upbias ?

 

[DKALA]

Nice picks my friend

 

[DKALA]

What about geetanjali gems