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Dear Reader,
The Reserve Bank of India (RBI) governor Raghuram Rajan widely disappointed markets by cutting repo rate by just 25 basis points to 7.25%. Most analysts termed the rate cut a non-event, with the broader consenus being that 50 basis points cut was warranted. Lead by fall in Bank Index today, Sensex and Nifty are down by more than 1% each.
We also take this
opportunity to share our Value Picks – 2014 performance update. We are glad to
share that Value Picks recommended by us in 2014 have given average returns of 37% compared to mid-cap index average returns of 20%.
The Reserve Bank of India (RBI) governor Raghuram Rajan widely disappointed markets by cutting repo rate by just 25 basis points to 7.25%. Most analysts termed the rate cut a non-event, with the broader consenus being that 50 basis points cut was warranted. Lead by fall in Bank Index today, Sensex and Nifty are down by more than 1% each.
Why did the RBI cut repo rate by just 25 basis points? First and foremost reason is that there
is an upside risk to inflation due to uncertainty on the monsoon front.
Secondly, crude prices have been firming amidst considerable volatility, and
geo-political risks are ever present. Volatility in the external
environment could impact inflation and hence a concern.
However, the ongoing market correction gives good opportunity
to invest in those companies which are least impacted with change in interest
rates. We are glad to inform our readers that our recently released Value Pick Stock
– May’15 (released on 31st May’15) is one of such opportunity.
Few facts about our Value Pick - May'15 stock which make it an excellent pick are as under:
1. Company has posted excellent set of numbers in its last quarter compared to peer group companies. It has substantially gained market share in the industry with growing popularity of its brand.
2. The company has a strong dealer network and the management has guided that company would be expanding its dealer network in rural India by adding more dealers in future. In addition, the company is also looking for opportunities to expand in new geographies in south.
3. Company has doubled its capacity in last couple of years and company’s manufacturing plants are strategically located, this provides logistic advantage and helps company to cover more customers and ease the logistics problems by reducing transit time and ensuring regular supply of its products to its dealers.
4. Management has taken various initiative (capacity expansion, entry into new geographies, launch of new products in different categories) to drive growth and is capable enough to deploy the capital efficiently to achieve higher rate of returns.
5. Company has paid regular dividends to its share holders and dividend payouts have increased every year since last 7 years. Moreover, company is a debt free company, hence fundamentals are strong and financial risk is not a concern.
6. Recent initiatives taken by management is expected to augur well for company's growth during next 4 to 6 quarters. Company has delivered healthy top line and bottom line growth in past and expected to grow its revenue above 20% CAGR in coming years with operating margins of 18%.
7. On valuations front, stock is reasonably priced considering FY-16 earning estimates and currently trading at forward PE multiple of 19 which looks discounted compared to peer group companies. As per our views, company offers good investment opportunity with upside potential of 40% - 55% in period of 12 to 18 months.
1. Company has posted excellent set of numbers in its last quarter compared to peer group companies. It has substantially gained market share in the industry with growing popularity of its brand.
2. The company has a strong dealer network and the management has guided that company would be expanding its dealer network in rural India by adding more dealers in future. In addition, the company is also looking for opportunities to expand in new geographies in south.
3. Company has doubled its capacity in last couple of years and company’s manufacturing plants are strategically located, this provides logistic advantage and helps company to cover more customers and ease the logistics problems by reducing transit time and ensuring regular supply of its products to its dealers.
4. Management has taken various initiative (capacity expansion, entry into new geographies, launch of new products in different categories) to drive growth and is capable enough to deploy the capital efficiently to achieve higher rate of returns.
5. Company has paid regular dividends to its share holders and dividend payouts have increased every year since last 7 years. Moreover, company is a debt free company, hence fundamentals are strong and financial risk is not a concern.
6. Recent initiatives taken by management is expected to augur well for company's growth during next 4 to 6 quarters. Company has delivered healthy top line and bottom line growth in past and expected to grow its revenue above 20% CAGR in coming years with operating margins of 18%.
7. On valuations front, stock is reasonably priced considering FY-16 earning estimates and currently trading at forward PE multiple of 19 which looks discounted compared to peer group companies. As per our views, company offers good investment opportunity with upside potential of 40% - 55% in period of 12 to 18 months.
Value
Pick – May’15 stock report was released on 31st May and shared with all our Value Pick subscribers. If you wish to receive the same, simply subscribe
to our Value Picks today. Wait, you can avail discounts on our combo packs, click here to know more about our services and discounts available on our combo packs.
Below is the performance update of mid cap stocks recommended by us in 2014 under our Value Picks subscription service:
As illustrated in the table above, average returns (as on date) of Value Picks stocks recommended in 2014 is 36.7% compared to mid cap index average returns of 20.1%, Value Picks out performed mid cap index by 16.6%. Our top performing Value Picks of 2014 are Mind Tree and Bajaj Corp, 4 Value Picks stocks of 2014 have already achieved their target price giving returns of more than 45% to our subscribers.
At Saral Gyan, team of equity analysts keep on evaluating small and mid cap stocks to explore the best Hidden Gems (Unexplored Multibagger Small Cap Stocks) and Value Picks (Mid Caps with Plenty of Upside Potential) of stock market. Saral Gyan - Hidden Gems and Value Picks are the small and mid cap stocks with high probability to become multi-bagger stocks in future and a path for our investors to create wealth through equity investments in a long run.
At Saral Gyan, team of equity analysts keep on evaluating small and mid cap stocks to explore the best Hidden Gems (Unexplored Multibagger Small Cap Stocks) and Value Picks (Mid Caps with Plenty of Upside Potential) of stock market. Saral Gyan - Hidden Gems and Value Picks are the small and mid cap stocks with high probability to become multi-bagger stocks in future and a path for our investors to create wealth through equity investments in a long run.
We also take this as an opportunity to inform our readers that our Combo - 2 (Annual subscription of Hidden Gems, Value Picks and 15% @ 90 Days) is the best selling subscription service of Saral Gyan in 2015, we have registered maximum subscription of Combo 2 during 2015 so far, followed by Wealth-Builder which is our offline portfolio management service.We keep on updating our subscribers on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.
Note: Hidden Gem - May'15 is yet not released and will be released on or before Sunday, 7th, Jun'15.
So what you are waiting for? Subscribe to Hidden Gems & Value Picks and start investing systematically in fundamentally strong small and mid cap companies in 2015 to get rewarded in long term. Avail attractive discounts by subscribing to our combo packs, click here for details.
To know more about our payment options and bank details, click here. In case of any queries, simply write to us. We will be delighted to assist you!
So what you are waiting for? Subscribe to Hidden Gems & Value Picks and start investing systematically in fundamentally strong small and mid cap companies in 2015 to get rewarded in long term. Avail attractive discounts by subscribing to our combo packs, click here for details.
To know more about our payment options and bank details, click here. In case of any queries, simply write to us. We will be delighted to assist you!
Regards,
Team - Saral Gyan.
