Stocks for the long and short term portfolio
- Thread starter jamit_05
- Start date
Hi toocool,
I have benefited from your posts on trading and hence am glad to have this opportunity to revert the favour.
The focus of this thread is to spread the word on safe and lasting investments, which have a little chance of conking.
Most media companies are controlled by mafia/politicians etc. These Cos exist to serve their interests. Sure, they may make profits, but there is a small chance that it will pass-on to investors. There may be growth in EPS, but that earning will first find its way to their pockets... and what the investor will be left with is specualtive gain OR LOSS.
Instead, I will encourage you to look at stocks with strong goodwill and that are available cheap. This is sure-shot and not very difficult either. Such companies are all around you.... pick your heaven
Union Bank has lost noticeable clients in south mumbai from the business community. Reason is straightforward, its interest rates are high compared to private banks.
Quite clearly, nationalized banks are being neglected and privates ones are getting cheaper funds.... doesn't matter how. The bottom-line is if one wants to invest in the banking sector, then he is better off going with the private banks.
In short, SBIN, Union will be good investments only after the weakness is factored into price. Meaning, be ruthless in purchase price. As there won't be growth.
Quite clearly, nationalized banks are being neglected and privates ones are getting cheaper funds.... doesn't matter how. The bottom-line is if one wants to invest in the banking sector, then he is better off going with the private banks.
In short, SBIN, Union will be good investments only after the weakness is factored into price. Meaning, be ruthless in purchase price. As there won't be growth.
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Which stocks should a long term investor call expensive?
Mid caps have developed good business and are on a strong growth path. Current examples are Castrol India, gruh finance etc. They are trading at PE>25, yet they should not be seen as expensive.
Whereas, large Caps, which cannot possibly grow like they have in the past could be termed as expensive. One cannot expect RIL, ITC or HuL to show 15% growth in EPS for the next 10 years hence we need reasonably lower PEs, around 10 to 15. Else, they'd be expensive.
Mid caps have developed good business and are on a strong growth path. Current examples are Castrol India, gruh finance etc. They are trading at PE>25, yet they should not be seen as expensive.
Whereas, large Caps, which cannot possibly grow like they have in the past could be termed as expensive. One cannot expect RIL, ITC or HuL to show 15% growth in EPS for the next 10 years hence we need reasonably lower PEs, around 10 to 15. Else, they'd be expensive.
Castrol has run up quite a long race... since Jan-2008 from a price of 64 to 305.. without any major pullback..
while on Feb-2011.. it had a low of 180
and on Dec-2011 .. it had a low of 190.
Since then no look.. back..
Amit.. what you feel is the fair price for the purchase of this stock... Around 175 to 190 levels .. ok?
Finally.. Amit.. whatz your view about GIC HOUSING AND LIC HOUSING FINANCE.... Both of them looking weak in charts.... If it is considered as a buying candidate for long term portfolio for (>5years)... what you feel is the KILL PRICE FOR ENTERING THIS STOCK?
Regards :thumb:
while on Feb-2011.. it had a low of 180
and on Dec-2011 .. it had a low of 190.
Since then no look.. back..
Amit.. what you feel is the fair price for the purchase of this stock... Around 175 to 190 levels .. ok?
Finally.. Amit.. whatz your view about GIC HOUSING AND LIC HOUSING FINANCE.... Both of them looking weak in charts.... If it is considered as a buying candidate for long term portfolio for (>5years)... what you feel is the KILL PRICE FOR ENTERING THIS STOCK?
Regards :thumb:
Castrol has great numbers. That is beyond dispute.
1. Debt is Nil
2. Working Cap requirement is small, means the business is well managed.
3. Its NP > 10%, means it has a moat. Its getting premium price for products.
4. No equity dilution.
5. It has not gone for any major expansions, hence will easily survive the down economic cycle. This is evident from another angle, where its giving away its profits in dividends. Payout >50%
With that said, one expects its EPS to plateau and hence cannot be classified as a growth stock. This helps me to align my expectations.
I would buy Castrol with the cieling of 350 in mind. 2011 Low would be a very strong support and the safest point of entry at 190-200 range.
1. Debt is Nil
2. Working Cap requirement is small, means the business is well managed.
3. Its NP > 10%, means it has a moat. Its getting premium price for products.
4. No equity dilution.
5. It has not gone for any major expansions, hence will easily survive the down economic cycle. This is evident from another angle, where its giving away its profits in dividends. Payout >50%
With that said, one expects its EPS to plateau and hence cannot be classified as a growth stock. This helps me to align my expectations.
I would buy Castrol with the cieling of 350 in mind. 2011 Low would be a very strong support and the safest point of entry at 190-200 range.
Housing sector is taking a major beating. The worst has only started. Inflation is high and people are less able to buy property. These stocks are in for nice corrections. Now, the question is which stocks to buy in this sector in and after the correction.
Options:
1. LIC Housing
2. DHFL
3. Gruh Finance.
Of the three, only Gruh is a growth stock. It is smallest, has highest PE and consistent EPS growth. A good stock to have for the very long term.
In the other two, an investor should expect sharp correction for one single reason: Both are diluting equity. This is a negative, cuz when the going gets tough investors dump these stocks first. Hence, buying them at 2008 Lows is only fair as it has economic headwinds and problem of equity dilution.
I do not like GIC as much, because it is inconsistent in performance and has mediocre margins for a small company. It is more comparable with Gruh than LIC. Its EPS fell from 21 to 12 two years ago.
Options:
1. LIC Housing
2. DHFL
3. Gruh Finance.
Of the three, only Gruh is a growth stock. It is smallest, has highest PE and consistent EPS growth. A good stock to have for the very long term.
In the other two, an investor should expect sharp correction for one single reason: Both are diluting equity. This is a negative, cuz when the going gets tough investors dump these stocks first. Hence, buying them at 2008 Lows is only fair as it has economic headwinds and problem of equity dilution.
I do not like GIC as much, because it is inconsistent in performance and has mediocre margins for a small company. It is more comparable with Gruh than LIC. Its EPS fell from 21 to 12 two years ago.
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