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Wednesday, December 27, 2017

Portfolio of 10 Small & Mid Cap Stocks for 2018

Dear Reader,

We are pleased to inform you that we are in process of selecting 10 scrips from universe of small and mid cap stocks which can benefit investors in the year 2018. We are confident that these carefully selected stocks can outperform major indices like Sensex and Nifty over next 12 months. We will share portfolio of 10 small & mid cap stocks for 2018 on 1st Jan'18 with all our paid subscribers of Hidden Gems, Value Picks and Wealth-Builder.

Its time to also review our Portfolio of 10 stocks for 2017 released by our team on 1st Jan 2017, we are glad to share that our portfolio of 2017 have outperformed Sensex & Nifty by 7.1% and 6.1% respectively. Sensex has given returns of 27.7% (26,626 on 1st Jan'17 to 34,011 on 26th Dec'17) and Nifty has given 28.7% (8,186 on 1st Jan'17 to 10,532 on 26th Dec'17) returns during the year where as Saral Gyan Portfolio of 10 stocks for 2017 have outperformed both indices giving absolute returns of 34.8% in same period.

Performance update of our 10 stocks of 2017 since 1st Jan'17
Star performer of our portfolio in 2017 was Emmbi Industries giving returns of 105% followed by GIC Housing Finance (74%) and Stylam Industries (72%) where as laggards were SML Isuzu (-15%) and PNB Gilts (2%).

Saral Gyan Portfolio of 10 Stocks for 2017 Report: Click here to Download

We also take this opportunity to share the performance update of our recently released Diwali Muhurat Portfolio (released on 19th Oct'17) which is outperforming Sensex by 5.4% as on date. Since 19th Oct'17, Sensex has given returns of 4.4% (32,584 to 34,011), where as during the same period, Diwali Muhurat Portfolio has given absolute returns of 9.8%.

As on date performance of Saral Gyan Diwali Muhurat Portfolio - 2017.
Diwali Muhurat Portfolio was shared with all our members on 19 Oct'17 and we will review the performance of same before Diwali 2018. Hence, suggest our members to continue holding these stocks for time period of 1 year.

If you missed the opportunity to invest in Diwali Muhurat Portfolio, you can choose to receive portfolio of 10 small & mid cap stocks for 2018 by subscribing to our services under Merry Christmas & Happy New Year 2018 offer, Click here to know more about the offer.

Our selection process includes lot of research and data analysis. We first identify the sectors that are likely to do well in next 12 months. Having that done, we further refine our search to select companies from that sector. We create a portfolio worth Rs. 1 Lakh comprising 10 stocks so that it can help investors to create a model portfolio with lump sum investment upto 1 Lakh.

We have given the different allocation to each of the scrips keeping in mind the risk versus returns ratio. We have also fine tuned the portfolio with mid-cap and small cap scrips from different sectors so that the investors can invest in a complete mix of stocks to balance their portfolio. Saral Gyan Portfolio of 10 stocks for 2018 includes best of Hidden Gems and Value Picks recommended by our equity analyst’s team during last couple of years.

We continue to follow our simple but effective approach by evaluating each stock on the basis of below mentioned criteria’s.

(i) Top Quality management with high integrity:

This is an absolutely non-negotiable condition. If the management is not honest, will they want to share the goodies with you? No, they will look for the first opportunity to siphon off the profits and pull the wool over your eyes.

(ii) The scale of opportunity must be big:

Multi-bagger stocks are created because they are able to scale the opportunity rapidly. Titan Industries is a great example. In 2003-04, Titan‘s market cap was 500 crores. As on date, it is 75,900 crores. The fact that India is a booming marketplace of 132 crores consumers means that most products and services have a head start at trying to scale up their activities.

(iii) Low debt; free cash flows:

We learnt from the great crisis of 2011 that companies with high debt on their books simply get slaughtered. While debt per se is not bad (if the company is able to borrow at a lower rate and deploy it in its business at a higher rate, the operating leverage works in its favour), excessive debt with high interest and repayment obligations can crunch the stock in times of downturn. So, as a long-term investment philosophy, it is best to steer clear of high-debt companies.

(iv) High ROE – Efficient users of capital:

Some company’s management is able to squeeze that little extra of every buck. A ROE of at least 20% is necessary to make into the hallowed list of model portfolio.

(v) No High Capex Requirements – No Serial Diluters of Equity:

We know the demerits of investing in stocks like Suzlon & GMR which have an insatiable appetite for more and more capital. To feed their perennial hunger, these companies dilute their equity by making FPOs, GDRs & FCCBs resulting in total destruction of shareholders’ wealth. Companies should be lean and mean requiring minimal capital but generating huge returns there from.

(vi) Reasonable growth expectations:

“If you get a tax-free return of 18% for your portfolio, you must be very happy”. So, stop craving for that overnight multi-bagger. You’ll only end up losing your precious capital that way. Instead, look for well established small and mid cap companies that are growing at a reasonable rate of return (15 – 25%). With time and the magic of compounding, you will have your muti-bagger in your portfolio.

(vii) Valuations:

Most investors are obsessed about valuations, refusing to buy any stock that is “expensive”. However, one must remember that “expensive” is a relative term. If a stock is compounding at 25% on an annual basis, paying a price of 30 times earnings may be very reasonable. A stock like Nestle, for instance, has always been “expensive”. However, if an investor had gone ahead and bought the stock, he would have had an incredible multi-bagger on his hands. On the other hand, in trying to buy a “cheap” stock, one may get saddled with unsavory companies. After all, there is a reason why such stocks are “cheap”.

Of course, one should be careful not to buy in euphoric or bubble times when the pricing may be extravagant and not at all reasonable.

(viii) Concentrated Portfolio:

We like Warren Buffett approach, a believer in the concept of a concentrated portfolio. If you believe in the prospects of a stock you should be prepared to put a substantial chunk of money in it – or nothing at all. There is no point in buying a bit of this and a bit of that because that dilutes your returns.

Of course, we are no match for Warren Buffett and we do not have his conviction levels. So, we’ll stick to 10 stocks to begin with, which means that from 5% to 12% of the wealth will be invested in each stock.

(ix) Diversification:

Last but not the least; a proper portfolio must be diversified across sectors. A bit of Finance, a bit of consumption, some autos, a pinch of chemical etc will make a balanced portfolio.

Saral Gyan Portfolio of 10 Stocks for 2018 will be emailed to all our Hidden GemsValue Picks and Wealth-Builder members on 1st Jan 2018. Portfolio stocks holding period is minimum of one year.

We are pleased to inform you that we are celebrating this festive season by offering maximum discounts up to 30% and valuable freebies on our subscription services under Merry Christmas - Happy New Year 2018 offerAttractive discounts & valuable freebies which make our offer special for our readers are as under:

1. Discount up to 30% on combo pack subscription (valid up to 31st Dec'17 only)
2. Portfolio of 10 Small & Mid Cap Stocks for 2018 (to be released on 1st Jan'18)
3. Hidden Gems Flash Back Report - 2017 (to be released in Dec 2017)
4. Value Picks Flash Back Report - 2017 (to be released in Dec 2017)
5. Existing Portfolio Health Check Up under Wealth-Builder subscription
6. Saral Gyan eBook - "How to Grow your Savings?" worth Rs. 599 for Free.

Below table indicates subscription services and discounted prices valid up to 31st Dec'17.

Saral Gyan Merry Christmas - Happy New Year 2018 Offer
Hidden GemsRs. 10,000 9,000
Value PicksRs. 6,000 5,400
Wealth-BuilderRs. 20,000 18,000
Combo 1: HG + VP + WB + 15%Rs. 40,000 28,000
Combo 2: HG + VP + 15%Rs. 20,000 15,000
Combo 3: HG + VPRs. 16,000 13,000
Combo 4: HG + 15%Rs. 14,000 11,500
Combo 5: VP + 15%Rs. 10,000 8,500

Simply choose the subscription service / combo subscription you would like to opt and click on SUBSCRIBE! link in above table to make online payment using your debit / credit card or net banking facility. In case if you are not comfortable in making online payment, click here to know about our other payment options and bank details.

Hurry! Last 5 days... Offer will closes on 31st Dec'17 at 11.59 pm.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing. 

Team - Saral Gyan