The Best Ideas and stuff of 2012

Best wishes from Dalal Stree team

Welcome 2013!!!

Hello Friends, we wish you and your family a very Happy & Prosperous New Year!

2012 has been a good year for our financial markets with the sensex gaining over 25% this year and beating all other asset classes. The best thing was that the mid caps (the area we focus on) outperformed the broader markets and the high quality stocks were the major wealth creators. Those feeling that they might have missed the bus and it is late, have a look at this stat – markets are still 4% lower than they were 5 years back. It may be just a start of a long term bull market.

We went through the timeline and compiled the list of the best articles, learning and experiences of 2012. (They are not in any particular order):

Favorite Articles:

New Finance Blogs:

In 2012, we had some very interesting new finance blogs; we would love to congratulate them. We expect to see more new investing blogs in 2013.

  • Alpha Ideas – Nitin shares the best of the finance articles, videos and reports – everyday
  • Safal Niveshak – Vishal simplifies the teachings of the investing geniuses and makes them understandable in Indian market’s context
  • Value Investing by Dhwanil – Discusses value investing stock ideas with a clear thought process
  • Safir’s Picks – Safir is an opportunist investor, always with many interesting and winning ideas in his pockets (do follow him on Twitter too)

Best Videos:

Best Company Visits:

  • Astral Poly Technik – We met with the dealers and plumbers in Ahemdabad to do groundwork and were amazed by their feedback for a strong conviction
  • GRP – We were amazed by sincerity and knowledge of the management. Looking forward to attend AGM of 2013 too
  • Mayur Uniquoters – The grip and vision of the management on the business helped us in increasing the conviction

Our Best performers during the Year (with percentage change):

  • Astral Poly Technik (171%) – The growing brand presence and stock discovery led to high returns
  • Atul Auto (142%) – Company went pan-India from its home market of Gujrat
  • Liberty Phosphate (134%) – Favorable government policies for SSP sector led to mis-pricing opportunity
  • Mayur Uniquoters (130%) – Fantastic financial ratios along with growth led to a good re-rating
  • Apcotex (101%) – Earlier part of the Asian Paints group, this company did well on growth and dividends

The close runner-ups were up 100% each: Poly Medicure, Indag and BKT

Market learning of 2012:

Earlier we had a lot of focus on undervaluation while looking at a stock ideas. Now we have also started giving more weightage to the business quality and the scale of opportunity available. The three of the worst performing ideas were: Piccadily Agro, Faccor Alloys & BNK Capital

The common thing among all of them was that though they were good on ratios temporarily, but they had a poor business model or management.

Developing ideas for 2013:

Screener Developments:

During the year, we experimented with lots of ideas and things. We are highly excited about the developments on Screener and the feedback of users. Our favorite features of Screener are:

  • Export to Excel – Screener is the first website in the world to provide such a customization functionality
  • Alerts for Screens – We love to set the email alerts for the favorite screens in the Screener to keep an easy track of the latest results

Plans for 2013:

We are expecting the credit rate-cuts in early 2013 and are optimistic about the markets ahead. We plan to create more new tools to make investing happier and easier. We hope to discover more new stocks ideas. And above all, we look forward to your comments and support!

Wish you a very happy and prosperous new year ahead.

Best Wishes

  • Roberto el S

    Hi Ayush,

    I wish you and your family a very happy new year. Thanks for all the views and recommendations. Did pick up few of them including OCCL & Muthoot. Was a good year for me relative to 2011 in equities.

    The screener was like icing on the cake. Do keep blogging.

    Regards
    Roberto

    • Ayush

      Thanks and all the best wishes for the new year!

  • Anoop R

    Hello Ayush,Mrs Ayush & Pratyush

    Have a wonderful New year filled with joy. Please do keep posting nice articles.

    • Ayush

      Hi Anoop,

      Thanks and all the best wishes for the new year!

  • Sandeep

    Dear Ayush, I am a big fan of yours and a regular follower on your blog, you recommendations have immensely benefited me as a small investor, however I was wondering if it would help also a look at “what didnt work” esp. when we look back at the year that went by.. just my two cents… One again wishing you a pleasant and prosperous 2013 – Sandeep Rao

    • Ayush

      Thanks, Sandeep. All the best wishes for the new year!

  • Sandeep

    Apologies – I didn’t read the post properly… I take my two cents back… Sandeep

  • Kushal Dalal

    Ayush,

    Happy and Prosperous New Year to you and your family.
    Thanks for your hard work and hope to see more rocking idea in 2013:)

    Kushal

    • Ayush

      Thanks, Kushal. Do look forward to your ideas too.

      All the best wishes for the new year!

  • Pawan Dhawan

    Ayush,

    I am really proud of you. You are gem among those gems which you share

    • Ayush

      Sir, thanks for your continued support, encouragement and guidance

  • mub

    thanks for all your good work ; especially like screener. Would it be possible to add a comment section for screen filters like in a blog where people can comment and discuss while browsing the filters. Just thought it might be useful.

    • Ayush

      Thanks for the input. Will try to work on the same.

  • Navneet

    I have brought geodesic last month ,it is hitting lower circuit everyday

    • Ayush

      Hi,

      We don’t track the co closely but would advice caution in such stocks.

      • G S Ramakrishna

        Hi Ayush,
        A very Happy new year to you. Your screener has been very helpful for me. Wanted to know your thoughts on TV Today Network in media space??

        • Ayush

          Hi,

          Thanks. We are still studying TV Today but till now, it looks good considering the major upcoming changes in the industry.

  • Congratulations on fantastic selfless work being done by Mittal Family & Dalal Street Blog. Its rare to find such selfless blogs as yours n Valuepickr.You are doing yeoman service to millions of Indian retail investors. Keep up the good work.God Bless you.

    • Ayush

      Hi Vivek,

      Thanks for your appreciation and support. Look forward to inputs and updates from you.

  • Pravin

    Hi Ayush,

    Happy new your to you, I have been tracking ur blog for long time and learned a lot from ur picks, Thanks.

    I have also been looking at Lumax Auto tech recently, It is extraordinary that these people supplying some oridnary spare parts to Bajaj and few other cos. but maintaining such a high efficient operations for such a long time. I think major driver for this stock in near future could be revenue expansion due to planned Bangalore plant for Honda Motorcycles which is going to be operational by Q1FY2014. Any idea how much it will add to their bottomline?

    Also do you track Butterfly Gandhimati?

    • Ayush

      Hi Pravin,

      Yes, the new plant could be a trigger as it may bring growth. Yes, its actually surprising that they are doing so well in a highly competitive industry…we should try to dig more about them and reasons behind the same.

      Sorry, don’t track Gandhimati

      • Pravin

        Thanks Ayush, I will get back if I find some reason 🙂 otherwise its just the same u mentioned in other comment,

  • HI Ayush

    Wish you a happy and prosperous new year.

    Can you elaborate more on Lumax Auto tech. Number wise it looks quite attractive. I had a brief look at the company numbers. ROCE and ROE is quite high without debt, EBITA margin 6-8% looks better than average margin of the peers. valuation is quite attractive at 5x PE, 1.2 PB and div yield of 3-4%. But the business of the company looks pure commodity business with no entry barriers. But high and consistent ROCE suggest otherwise. Not sure what am I missing?

    • Ayush

      Hi Anil,

      Wish you too a very Happy & Prosperous New Year!

      Have a look at Suprajit. Its from the same sector and it also has no entry barrier but yet they have been super successful and become the largest and the best in their industry. The moat for them would be there scale, execution capabilities, mgmt quality etc. Many often moat won’t be by way of just entry barrier to product development.

      So I think that something similar might be applicable for Lumax too. There are other things to note like multiple plants, relationship with customers, quality etc.

  • Suresh

    Dear CA Ayush, Wishing you & family a happy & prosperous 2013.,

    • Ayush

      Thanks and all the best wishes to you too!

  • N K Rana

    Kudos to Ayush Mittal and All Member of Mittal family for their selfless and praiseworthy efforts in imparting knowledge of value investing to small investors like me.

    I wish all members of Mittal family, a healthier and propsperous New Year 2013. May Lord Krishna Bless us all and show us the path of righteousness, welfare and peace.

    Sincerely

    N K Rana

    • Ayush

      Hi Mr. Rana,

      Thanks for your good wishes. Wish you too a very Happy & Prosperous New Year!

  • Tony

    Pretty awesome stuff. Happy new year to you!

    • Ayush

      Hi Tony,

      How are you? Hope you had a great New Year. All the best wishes to you and your family!

      • Tony

        Thanks Ayush. I had a very peaceful new year. Looking forward to continued great material on your blog from you.

  • Prashanth

    Wish you and your family an awesome new year , people!

    2012 was eventful, to say the least! It was the year of birth of
    screener, an year to learn new things, an year of some great picks and
    great returns.

    Ayush and co, you are creating a new cult of informed investors!

    Thank you!

    Here’s looking forward to a more eventful 2013.

    As they say, keep some patience, the best things come late.

    P.S: Attached a Calvin and Hobbes strip on this note

    • Ayush

      Hi Prashanth,

      Thanks for sharing a nice comic 🙂 Very relevant to our investing world!

      Wish you too a very Happy & Prosperous New Year!

  • Nikhil

    what are your views on RS Software ltd. ? company is virtually debt free, good ROE, good consistent growth.

    • Ayush

      It does look good on several financial ratios and recent results.

      • Nikhil

        so is it a buy at current level ? your take on this.

        • Ayush

          Had looked at it recently and did like the nos. But gave it a go as we don’t understand IT cos well

  • severus

    Ayush & Pratyush – you guys did an awesome job this year. Both in terms of meaning ful value investing articles and the superlative job with screener.in.

    Wish you guys the very best for 2013. And Thanks !

  • Ayush

    Thanks and wish you the very best for 2013.

  • rare investor

    hi Ayush bhai , do you still track BNK capital , i am slightly frustrated as most of the stocks are moving up but not BNK as I had alrady invested before seeing on your website. Can I still buy now…. please my urgent request is to let me know before 3.15 pm today .. Your muthoot capital is going great guns and if you remember i discussed canfin and it has moved up 70% .. Please advise on BNK now

    • Ayush

      Hi Rare Investor,

      You had given a very timely call on Canfin…congrats. Recently we had some good discussions on the same – http://www.valuepickr.com/forum/untested-worth-a-look/461716698

      I do track BNK and have a small qty but holding cos can high opportunity cost as they are the last to move. Won’t advice high allocation to the same.

  • Ramesh Kumar

    Hi Ayush!

    Do you track Gujarat Fluorochemicals?

    What is still holding the stock back..if you could provide some insights pls……..

    • Ayush

      Guj Fluoro, gets majority of its income from carbon credits. The future of the same is uncertain as the prices have already crashed and there are less chances of the same getting continued. Hence there is uncertainty of the current performance getting continued into future.

  • Ramesh Kumar

    Hi Ayush,

    Do you track Hercules hoists? Does it have upside looking at its numbers?

    • Ayush

      Sorry, we don’t track the same

  • Sreekanth Narayan

    Hi Ayush and Pratyush

    First of all wishing you guys a Very Happy New Year…

    I Just have one request this year; if you guys can increase the frequency of stock focus more on weekly basis then i feel it would help out all the investors here. Secondly I would like you guys to discuss more of these stocks during 2012-13 and cover a detail report if possible

    1. Cenlub Industries

    2. 3i infotech

    3. Gujarat Gas Co.

    4. Rossell India

    5.Gujarat Intrux

    6. Ecoplast Ltd

    7. Porwal Auto Components

    • Ayush

      Hi Sreekanth,

      Among the above, we do track Guj Intrux and like and own the same. Cenlub is also a interesting co.

      Haven’t been tracking others. Would be nice to have your logics/note on above.

  • Suresh

    Dear CA Ayush Good Evening. Based on your recommendation, I have purchased 200 shares of Caplin @Rs 71 which is on upper limit for last two days. Thanks for your guidance. Regards

    • Ayush

      Dear Sir,

      Will request you to always do your own research and homework. Buy only when you are convinced.

      • aditya

        Agree that caplin is a good share but it has quadrupled in last 52 weeks.Seems a risky buy at current level.What is your take on it ayush?

        • Ayush

          Yes, the upmove has been quick. But one must look at the prospects first and then the stock price.

          Being a growing pharma co with some unique points, if they are able to execute well their upcoming expansion, the stock can do well over a longer term

  • Anil

    Hi Ayush,

    You were looking at Aarti drugs, any update on the same. Have you met the management? Any views?

    • Ayush

      Hi Anil,

      We do like and own Aarti Drugs. The co has quite improved over the recent years and looking at the actions of the mgmt and promoter buying, it could be a very interesting story. However high debt and moderate ROE is a negative.

      No, we haven’t done any management visit.

  • aditya

    i Liked your blog.great work with stock screener.I have one question abt lumax.The auto sector will take some time bfre it recovers.Is it a good time to invest in it?

    • Ayush

      Yes, the sector may take time to recover. But look at the valuations the co is available at. We feel there is a good margin of safety at these levels.

      We may be wrong too, hence its important to do your homework 🙂

  • aditya

    on the similar lines of ajanta pharma is another company ,venus remedies.Though the cash flow is bit strained none the less the company has been able to bag some patents in the recent days.What is your take on this stock

    • Ayush

      We don’t have comfort on the earning quality of venus remedies.

  • aditya

    hi Ayush,
    I have one suggestion.You have recommended quite a few stocks in the past year.Is it possible to have something like an excel sheets listing all the stocks which are still to be kept under our radar and listing those too which have been discussed but are a strict “no buy” under current circumstances. I see one such stock is ajanta pharma which is still a buy given your analysis .

  • aditya

    If one had been observing the price of caustic soda doubled in the last one year.I want to discuss abt two stocks from the same sector
    1.AB chemicals-Recently bought kanoria chem caustic soda plant and did a huge capacity expansion.Cons-Debt is too high
    2.Gujrat Alkalies-Profit rose in the last quarter and given the caustic soda price rise the quarter results are expected to be good.
    Does it look like a good medium term bet to you?

  • aditya

    Any views on pix transmission ,it popped up on one of the screens as a turn around candidate

  • Srinivasan

    Hi Ayush,

    Do you have Caplin point Labs latest annual report for 2011-12 pdf? I am not able spot in their website. Any links will be appreciated. Thank you.

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