Update on this report was published in April'14 which we shared with all our Hidden Gems and Wealth-Builder members, We would like to inform our readers that there is no change in our views and we suggest our members to continue holding these companies with a long term perspective. Moreover, one of the Hidden Gem stock of last year was replaced by another stock in April update which has proved to be a good decision..
However, our team while selecting these stocks was confident enough to achieve 5 times returns in period of 5 years by monitoring performance of these companies and taking corrective measures in case any of them does not perform up to our expectations.
Few important parameters which have been looked by our equity analysts while finalizing the stock selection are as under:
- Market leader in the business / any one segment in which the company is operating in.
- Scalable business with significant moat (sustainable competitive advantage)
- Prudent Management with promoters increasing their shares holding in the company
- Zero or negligible debt on books with healthy cash flows.
- CAGR of above 15% with increase in operating and net profit margins in last 5 years.
- Consistent dividend payment with dividend yield above 2% in last 5 years
- Increasing EPS, single digit PE ratio with ROE and ROCE above 20% in last 5 years.
- Zero or negligible share holdings of Institutions (FIIs & DIIs) to get first mover advantage.
We at Saral Gyan recommend good businesses to buy with long term view and any change in our stock views will be based on strong structural trend and not on any short term movement.
We are glad to share that 4 out of 5 Hidden Gems have given astonishing returns in the range of 250% to 500% within first 15 months and investment made by our members in these stocks have already multiplied by 4 times, we have still 45 months left to get our investment multiplied by 5 times which we are sure will be achieved much sooner than later. Moreover, we are positive to see these stocks turning 10-Bagger for our members.
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Team – Saral Gyan
Saral Gyan Capital Services.