Portfolio shuffling…

It is important to re-evaluate the portfolio and weed out non-performers, or the stocks in which the story is not developing as expected, or switch to new ideas which look cheaper or have more value than others. We have exited from couple of our ideas over last few days:

1. Jocil – Initially discussed @ 265, it is a good company with good fundamentals. The company has also rewarded with a bonus in the ratio of 1:1 and the stock is cum-bonus @ 285. Yet, we are switching out as we feel better ideas are available. Also a couple of negatives are – 1.) The company hasn’t been growing over last few quarters while the debt has increased. 2.) Company is import dependent and due to strong rupee weakness, they may get a hit.

2. Balaji Amines – Initially discussed @ 48, though the stock seems cheap at 4 times PE multiple @ 35, but the negatives are – 1.) The debt levels are too high to be comfortable with. 2.) Being in chemical sector, stock usually get low PE ratios due to lumpy earnings. At this time, there are several companies which are debt free, domestic business and showing growth, yet available at 4-6 times earnings. Eg: Indag Rubber, IFB Agro etc.

Some new ideas which we are studying and look good are – AMD Industries, Oriental Carbon & Chemicals and GIPCL.

Happy to see the price performance of Avanti Feeds, Astral Poly and Balkrishna Industries. These stocks have made a new 52-week high despite a weak market. We had discussed Avanti Feeds earlier and provided an update. The stock has doubled in about 9 months:

Avanti_Feeds

Looking forward to your inputs on the new stock ideas, keep the comments flowing in.

 

 

  • Balaji is also facing problems in importing raw materials. So, even this quarters margins will be impacted.

    http://valueinvstr.blogspot.com

    • jatinder singh

      its now the time to be away from such counters. very good quality stocks are available at throw away prices. grab them …start accumulating.

  • Sagar27

    Ayush,
    whats your take on Godrej Inds and NMDC? Is it under your review or worth buying in as they are better placed in Large caps?

    • Ayush

      Hi Sagar,

      Sorry, don’t track those two. Well researched small caps would do better than large caps 🙂

      Regards,

  • Hardtoget

    Hi Ayush,

    Have been looking at Puneet Resins,Low Debt,Good Profits, Better management
    Any ideas on the same

    • Ayush

      Hi,

      Yeah, Puneet has been doing well. But we felt there is more value in their group co – Rishiroop Rubber. Have a look at that also.

  • Rare investor

    Hi Mr. Ayush,
    My full appreciation for you and your team for researching great value picks.

    I need your advice on a stock — Punjab & Sind Bank quoting at seemingly attractive valuations @ 0.45 x P/BV against other small PSU banks quotin in a range of 0.70 to 1 x P/BV. A closer look at Punjab and sind bank shows declining NIMs due to provisions and big pension liabilities. Is it possible for Punjab and sind bank to quote at 0.80 x P/BV in 2 years and that will mean it should double in 2 years ?

    Else should i go for Canfin home finance quoting attractive valuations at 0.62 x P/BV (P/e of 4.75) at a discount to larger players but i am not sure about its growth but atleast there is no headache of provisions and pension liabilities.

    What is your pick Punjab and sind bank or Canfin home finance ?

    • jatinder singh

      these two stocks are good but not fancied. i suggest u immediately switch over to rishi lasers …@ 42 levels…some good news in the pipeline, its a takeover candidate .

      • Rare investor

        thanks mr jatinder , but would like Mr. Ayush to throw some further light on the same.

    • Ayush

      Hi,

      PSB does looks cheap and attractively valued but the feedback from investors has been very negative about the quality of mgmt and loan book. People fear that bad loans etc may come up.

      Haven’t tracked Canfin finance.

      Thanks & Regards,

  • Rishant

    Hi Ayush,
    Whats your take on Savita Oil Tech? Good company to invest and if you tracking it?

    • Ayush

      Hi Rishant,

      Yes, it does seems to be a good company.

  • mathew

    hi ayush

    wats ur take on superhouse leather and sundaram brake linings?

    • Ayush

      Not tracking both of them

  • Mathew

    i also found ideas like roto pumps,first leasing,gillanders abru and munjal showa..

    looking forward for your comments on that too…

    • Ayush

      Sorry, not tracking these also 🙁