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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403
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   Topic: The Multibagger portfolio
Posted: 26/Jul/2006 at 5:16pm |
Hi Guys,
I am trying to gather a lot of data in order to prepare a multibagger portfolio. The rules are simple. Each participant gets to put in a maximum of 5 stock. Merely putting in names is not sufficient. It is better if each of these names are substantiated by at least a couple of lines on the company's activities and business processes.If you do not ahve the fundamental factorsd you may make a case on busienss processes also.
As we go along other members could contribute to ideas or ask for explanation from the person who innitiated a buy on each stock.Please put in the current market price at the time of filling in with your views.
My ideas are:
Pantaloon Retail (CMP Rs 1125): The leader in the organized retail space is expected to grow at 70%+ over the next 4 years. The company has already demonstrated its ability to set up newer formats. In fy 2007 Pantaloon Retail sghould do asale of Rs 4000 crores with an EPS of Rs 56. At a price of Rs 1125 the stock is dicounted by around 20 times current year. At a market cap of Rs 3000 crores it makes sense to load on.
TV 18 (CMP Rs 617)- The leader in the dmedia sector Tv 18 will benefit tremendously once CAS (Conditional Access System) is innitiated the stock will see no stopping. Read the recent report posted on the forum at:
TV 18 is a media cum internet play.With increasing broadband penetration internet busineses will be in demand and by 12008 Internet shall contribute to about 20% of Tv 18's consolidated revenue.
So Guys fill in with your ideas and let us see how best we can make of it!!!
Edited by basant - 26/Jul/2006 at 5:19pm
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posted: 26/Jul/2006 at 6:45pm |
Dear All,
My 5 picks will be:
1.Varun Shipping
2.Great Eastern Shipping
3.Pidilite Industries
4.BASF India
5.Foseco India
I dont think I need to throw much light on them. they are unusual but familiar names.
Regards,
Vivek
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sajanvm
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Joined: 18/Jul/2006
Location: India
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Posts: 91
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Posted: 27/Jul/2006 at 12:25pm |
I would like to add 2 stock ideas that I think have the potential to be multi baggers and offer a decent margin of safety at current levels
1) Balaji Telefilms. At about 100 bucks/share, you are really only paying 75 since the company has around 25 in cash. Stripped off cash, company quotes at a very low trailing PE of 8.5 This is very cheap for the premier content provider to many channels like Star. Everyone talks about CAS benefiting broadcasters, but I think it should rub off on content providers also. Company has desrisked its model since the bulk of its programs are commisioned programs (as opposed to sponsored). There is also the value of its software library which is never factored in (for re-runs etc).
2) JB Chemicals - A glance at its 5 year performance will be very revealing. Its annual report reveals that 95% of its business is from formulation sales (not bulk drugs). Why should it then trade at commodity valuations with a trailing 10 PE ? It has built an excellent brand in Russia - Doktor Mom which has been awarded Superbrand status. and has licensed the same to Ranbaxy for other countries in Eastern Europe. In addition, the company is debt free and is available at 3% dividend yield.
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Sajan
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sajanvm
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Posted: 27/Jul/2006 at 12:29pm |
Vivek
Could you outline your investment case for BASF & Foseco briefly ?
On Pidilite - I have always viewed this as a steady compounder than a multi bagger since valuations are not exactly cheap at this point. It is one of my favourites and have held it for a long time .
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Sajan
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The Lord
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Joined: 23/Jul/2006
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Posted: 27/Jul/2006 at 12:44pm |
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you talked about pantaloon retail yesterday and today it increased abt rs160/- and is at a current level of 1280 and yesterday it was 1120 i'm impressed and bemused as to why idid'nt bought it yesterday
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wining is not everything, for me it is the only thing
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basant
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Posted: 27/Jul/2006 at 12:51pm |
Dear Student,
In the short term we can only be lucky to make money like that I do not think that any one knew how Pantaloon Retail would behave today and any one who says he did, is not telling you the truth.
My premise was on a 2 - 3 year view and in the meantime it can fall by Rs 160 also who knows. the idea is to keep the terminal value in mind and stick with your conviction.
Any way thank you for your kind words!
Edited by basant - 27/Jul/2006 at 12:52pm
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posted: 27/Jul/2006 at 5:42pm |
BASF has been a consistenet performer for last 10 years. I am very bullish on BASF simply because of its capex plans last year. these MNCs are far more objective when it comes to pressing ahead with capital expenditure. Also, this is one MNC among very few, who are balanced in their dividend pay-out policy which ensures good availability of internal accruals and alaso shareholder valye creation. Also, with plastics likely to see tremendous increase in consumption, such chemical intermediaries are likely beneficiaries.
As far as Foseco goes, I am bullish simply because I see a huge demand for metallurgical chemicals in the coming years, seeing the way steel and other metal companies are coming up. Also, this company has lovely policies in place. It has an excellent corporate governance.
Regards,
Vivek
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posted: 27/Jul/2006 at 5:56pm |
I know MNCs are out of favour at this moment, but then we as findamental investors must noy worry about that in the short term. The markets will take time to recognise value, and it should be given that much time. As far as Pentaloon goes, I would like to ask Mr. Basant if he has any target, or is forever a hold. I need to clarify here, most of the companies I have listed above are forever a hold for me.
Regards, Vivek
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