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Tuesday, August 30, 2011

6 out of 10 Hidden Gems are still in Green

Dear Reader,

It gives us immense pleasure in sharing that our Hidden Gems stocks are doing extremely well during tough time of stock market. Hidden Gems average returns are positive and 6 out of 10 Hidden Gems stocks returns are in green.

Saral Gyan - Hidden Gems are micro / small cap companies with a market capital of less than Rs. 250 crores (2,500 million).

It's a fact that during turbulent times of stock markets, small cap and mid cap companies see more pain in terms of stock price corrections as compared to large cap stocks.

During last one year, stock market has given negative returns to Investors. Below are the returns of Small cap and Mid Cap index compared to major index - Sensex. 
  • Small Cap Index on 30th Aug 2010: 9636.47
  • Small Cap Index on 29th Aug 2011: 7053.81
  • Small Cap Index yearly returns: -26.80 
  • Mid Cap Index on 30th Aug 2010: 7640.96
  • Mid Cap Index on 29th Aug 2011: 6184.25
  • Mid Cap Index yearly returns: -19.06 

  • Sensex on 30th Aug 2010: 18032.11
  • Sensex on 29th Aug 2011: 16416.33
  • Sensex yearly returns: -8.96
Now, question arises - why to invest in small cap and mid cap stocks when they fall so much? Why not to stay with front liner blue chips - Sensex stocks?

Well, its a fact that during stock market correction, losses would be much higher in small cap stocks followed by mid caps. But you should not forget that small and mid cap stocks rises the most during bull phase and have the potential to give you extra ordinary returns compared to large caps. Returns on your investment could be in multiples if you stay invested in fundamentally strong growth oriented small cap and mid cap stocks.

This is one of the strong reason why smart investors like Mr. Rakesh Jhunjhunwala invests only in small and mid cap stocks. He created wealth by investing in small cap stocks and holding them for years. Small cap stocks usually trades at lower PE ratio and when these companies attain a sizable market cap based on continuous YoY growth in revenues and profits and when institutions and domestic funds start buying these stocks, it results in PE expansion because of rerating of such stocks. And early entrants who are holding the same stock from last couple of years enjoy multibagger returns.

Buts it is not as simple as it seems to be. Selecting and investing in multibagger stocks require a lot of research and patience. Small and mid cap stock universe is so large that investors usually get confused what to buy and what to hold. Holding and tracking dozens of stocks is feasible but evaluating hundred of such stocks again make your job difficult.

Equity analysts at Saral Gyan keep on exploring such investment opportunities for you in small cap space. We publish one Hidden Gems research report each month for all our Hidden Gems subscribers.

Saral Gyan Hidden Gems outperform small cap index by whopping 25%. Hidden Gems beat other major indices too. After such a severe correction in stock market, average returns of last 10 Hidden Gems is +4.5% compared to average negative returns of -21% of small cap index.

Below is the past performance of last 10 Saral Gyan - Hidden Gems stocks:

Its wise to give 20% weightage of your equity portfolio to small cap stocks by investing in them. These stocks have the potential to grow your principal sum many folds in couple of years. So what are you waiting for? Do not miss this opportunity and start investing in Hidden Gems during recent stock market downfall with time horizon of 18 to 36 months.

To know more about Hidden Gems, click here. Check out Hidden Gems subscription charges and payment options.

Avail attractive discounts during our ongoing "Ganesh Chaturthi" offer. Hurry! Last 3 Days, offer closes on 1st Sept 2011.


Saral Gyan Team.