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Wednesday, November 14, 2012

Switch Strategy Delivered Returns @ 45% in 3 Months

Dear Reader,

We would like to update you on the past performance of our recently recommended Hidden Gem in the month of August 2012.

Before that, let us update you about the Hidden Gem research report which our equity analysts published on 24th July 2011. Our equity analysts released unbiased research report of WPIL with buy recommendation at average buying price of 182, stock has appreciated more than 100% in period of 1 year. We suggested partial profit booking to our members by selling half of their WPIL shares at price of 425 in August this year. The reason to book profits was handsome returns and slightly stretched valuations compared to other peer companies in the same segment.
 
During the same time, our equity analysts picked up another company from the same segment which was available at attractive valuations compared to WPIL with good growth prospects in future. The research report of this company was released by our team with buy recommendation on 5th Aug 2012 as Hidden Gem of the month.

Partial profit booking in one small cap stock and taking exposure in another small cap stock from the same segment has really worked well for our members. Hidden Gem stock – Aug 2012 has seen good appreciation in price giving handsome returns of 44% in short span of 3 months where as WPIL returns during the same period is -1.2%.

Below is the comparative returns of Small Cap Index, WPIL, and Hidden Gem since  5th Aug 2012 (Hidden Gem - Aug'12 release date)


Small cap index  has given 9.6% returns, WPIL has given returns of  -1.2% and Hidden Gem – Aug 2012 has outperformed all major indices giving fabulous returns of 44.2% during the same period.

We expect that stock will make new highs in days to come. Hence, suggest all Hidden Gems members to hold it and add more if stock price come down by 15-20% in case of any market correction.

Switching from one company to another in the same segment is always a good decision when you know that another company from the same segment is performing better, growth prospects & earning visibility looks good and valuations are cheap compared to the one which you are holding.

WPIL is not the only case, another example is of National Plastic & Wimplast, both these stocks were recommended as Hidden Gems by our equity analysts and belong to same segment i.e. Plastic Industry. National Plastic was recommended at price of Rs. 22 in Jan 2011 and when company quarterly results were below our estimates, we suggested to exit at price range of 17-18. A right decision, as company has not performed well delivering minuscule growth and now trading at Rs. 12.

Later, Wim Plast was recommended as Hidden Gem - Aug 2011 from the same segment at average purchase price of Rs. 185 considering better operating margins, capacity expansion pans without increase in debt or equity dilution and open market purchase by promoters to increase their stake upto 75%. Wim Plast has recently made 52 week high of 394 giving returns @ 113%. Wim Plast is our 8th stock out of last 21 Hidden Gems which has given more than 100% returns to our members in span of 10-15 month. Still our team has not suggested profit booking as company management is doing all right things to deliver similar performance in coming quarters like that of last financial year.
To view/download Research Reports of 8 Hidden Gems which gave returns of more than 100% - Click Here.

In fact, stock tally of Hidden Gems giving more than 100% returns is now stands at 9, Mayur Uniquoter is the 9th stock out of 21 (Sept'10 - Jun'12) which has given more than 100% returns to our members.

Mayur Uniquoter research report was published on 31 March'12 with Buy recommendation at Rs. 448 (before bonus issue) and now stock trades at 467 (adjusted bonus price), giving returns of more than 100%. Our equity analysts gave a price target of Rs. 850 (adjusted target price after bonus issue - Rs. 425) which is already achieved in short span of 8 months.

To Read/download Mayur Uniquoter research report - Click here

Needless to say, major indices (Sensex and Nifty) including mid cap and small cap index have given negative returns to those who invested in stock markets 2 years back.

Sensex was at 20,310 on 15th Nov'10 and closed at 18,619 on this Diwali, negative returns of -8.3%. Similarly, small cap index was at 10,885 and yesterday closed at 7,172, negative returns of -34.1% whereas Saral Gyan Hidden Gems average returns in last 2 years stands at whopping +36%.

Investing in stocks is risky but if you invest in carefully selected companies with strong fundamental & keep a longer time horizon (2-5 years), you can earn far superior returns compared to any other asset class like real estate (land), precious metals (gold & silver), bonds and fixed deposits.

If you really want your Money to Grow, Stocks is the only way to Go! Important is to invest in companies with strong fundamentals at justified price based on valuations.

Interested to subscribe to Hidden Gems? Avail attractive discounts upto 40%, Special Diwali gift and Freebies under Saral Gyan Special Dussehra - Diwali Offer of the Year. Hurry! Last 24 hours, offer now closes on 15th Nov'12. Click here for details.

Wish you happy & safe investing.

Warm Regards,

Team - Saral Gyan.