Sunday, July 14, 2013
The legendary Walter Schloss checked the stock on the following 4 criteria to determine if the stock merits a place in the portfolio:
1. Zero or very low debt equity ratio
2. High Promoter holding
3. Dividend yield of at least 3%
4. Stock purchase price lower than book value
Warren Buffett's method of evaluating a company is based on its fundamentals. Specifically, he asks us to look for companies that:
1. Are in a business that you can truly understand
2. Have a large competitive advantage (huge moat) over existing and new entrants to the business
3. Provide a service that is likely to be needed for a long time, and is unlikely to be replaced any time soon.
Benefits of Investing in Micro & Small Caps:
1. Small companies adapt fast to changing environment - they are nimble and can therefore move fast.
2. Given low liquidity, while retail investors can buy small caps, many fund managers cannot - so retail investors have a first mover advantage with a good small company.
3. Small caps are high in demand but less in supply - that means prices rise really fast when demand increases
It’s dedication & passion of our team that even during bearish phase of equity market since last 2.5 years, 8 out of 28 Saral Gyan Hidden Gems gave more than 100% returns to our members. Hidden Gems have given average returns of +12.7%, maximum returns of +78.2% whereas small cap index has given negative returns of -22.7% in last 2.5 years. Our equity analysts have suggested regular profit booking at higher levels in few of best performing Hidden Gems and exists from non performing stocks to maximize returns on investment of our members.
Our 5 Hidden Gems stocks of 2011 which gave more than 100% returns:
1. Camlin Fine Sciences (BSE Code - 532834): Camlin Fine Sciences was recommended by our equity analysts at price of 60 (price adjusted due to stock split) considering positive developments in the company. We suggested partial profit booking by selling 75% holding of Camlin Fine Sciences at price range of Rs. 130 (price adjusted due to stock split), returns of 115% in short span of 8 months.
Camlin Fine Sciences Research Report - Read/Download
2. Cravatex (BSE Code - 509472): Cravatex belongs to consumer segment and was attractively valued before bonus issue, company own rights to sell brands like Fila and Proline and was expanding its reach to customers in different geographies of the country, stock was recommended at price of Rs. 700 (bonus adjusted) in May 2011 by our equity analysts. Stock made high of Rs. 799 in April last year registering maximum returns of almost 130%. We suggested partial profit booking at Rs. 700 (post bonus) to our members.
Cravatex Research Report - Read/Download
3. WPIL (BSE Code - 505872): Our equity analysts noticed that WPIL promoters are doing aggressive open market purchase. Later our analysts tried to dig out the reasons and found that WPIL has made few acquisition/ tie ups globally to synergize their business and is going to be benefited tremendously in coming quarters. Stock recommended at price of Rs. 182.5 made high of Rs. 458. Partial profit booking was suggested to our members by selling 50% of stock holding at Rs. 425 (returns of 130%) & holding the remaining quantity for long term.
WPIL Research Report - Read/Download
4. Wimplast (BSE Code - 526586): Management has been conservative in past but with new developments since last year with expansion plans in existing facilities and set up of new plants gave visibility for revenue growth in coming years. Commencing of new facilities gave opportunity to the company to expand their network & customer reach. High earning visibility & low valuations made Wimplast an attractive bet, recommended at Rs. 185 in Aug'11, now giving returns @ 93%.
Wimplast Research Report – Read/Download
5. Cera Sanitaryware (BSE Code - 532443): Cera Sanitaryware was attractively priced and was trading below its intrinsic value in Dec 2011. Our analysts were confident enough about decent returns in this scrip and suggested a buy at price of Rs. 157, stock has recently made 52 week high of 570 (returns @ 262%) and almost treble the investments of our members in short span of 1.5 years. As valuations are attractive and fundamentals are intact, we suggested our members to hold it for long term. Cera Sanitaryware Research Report - Read/Download
Now you can subscribe to Hidden Gems availing more than 50% discount with 3 year subscription under Saral Gyan 3rd Anniversary offer. Hurry! Last few hours, offer closes on 15th July 2013 at 11.59 pm. Click here for complete details of the offer.
In case of any queries, please do not hesitate to contact us.
Team - Saral Gyan.
5 Hidden Gems which gave ROI above 100% in 6-15 months