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Showing posts with label Past Performance. Show all posts
Showing posts with label Past Performance. Show all posts

Wednesday, February 8, 2023

Performance Update - 6 Hidden Gems to Buy / Accumulate

 Dear Member,

We have seen significant correction in broader market over last one year. While major indices - Sensex and Nifty are merely down by around 7% from their all time high, most of the small and mid caps which turned expensive in 2021 - 2022 have seen significant price correction over last 12 to 18 months. At current juncture, where large caps are fairly priced, small and mid caps segment offers good investment opportunities with plenty of stocks available at attractive to reasonable valuations with significant upside potential from current levels.

BSE Small Cap Index made all time high of 31,304 in Jan 2022 and later witnessed correction of -25.7% making low of 23,304 in Jun 2022. Currently, BSE Small Cap Index is around 27,600 i.e. down by around 12% from its peak of Jan 2022, where as many small cap stocks are down by 20% to 70% from their peak prices.

“The first rule of investment is ‘buy low and sell high’, but many people fear to buy low because of the fear of the stock dropping even lower. Then you may ask: ‘When is the time to buy low?’ The answer is: When there is maximum pessimism.”
Sir John Templeton

Performance Update of Hidden Gems Special Report released in Sept 2018

We would like to inform you that we released our Special Report - 6 Hidden Gems to Buy / Accumulate on 30 Sept 2018. We selected stocks from our past recommendations and advised our members to accumulate them during 2018 and 2019. Below is the performance update of Hidden Gems stocks shortlisted under our Special Report:
We are glad to share that despite the severe correction in broader market over last 12 to 18 months, Globus Spirits is delivering as on date returns of 433% followed by Acrysil (343%), Talbros Automotives (103%) and Sahyadri Industries (99%), other two stocks i.e. Control Print and Bhageria Industries is giving 35% and 13% returns respectively as on date.

Imp Note: You can access our Special Report - 6 Hidden Gems to Buy / Accumulate which we released on 30 Sept 2018, Click here to download the old report. 

Please note we do not advise investment in these companies, the report is shared to update you on the past performance of our small cap picks covered in Special Report (released on 30 Sept 2018) under Hidden Gems service.

Special Report - 5 Hidden Gems to Buy / Accumulate - Released on 29 Jan 2023

Post significant correction in small caps, we reviewed our past recommendations released under Hidden Gems of last 3 to 4 years and short listed 5 Hidden Gems stocks which offer good long term investment opportunity and have potential to give excellent returns on your investment during next 2 – 3 years. These stocks are covered in our Special Report - 5 Hidden Gems to Buy / Accumulate which we released on 29 Jan 2023.

While short listing 5 stocks under Hidden Gems, we evaluated each company on the basis of I-B-M-V-E-D parameters (Industry, Business, Management, Valuations, Earnings Growth & Debt Management) and rated every parameter using a rating scale – E,V,G,F,P (E=Excellent, V=Very Good, G=Good, F=Fair, P=Poor)

One of the important key to successful investing is to pick the right business at decent valuations. We finalized these 5 stocks with a long term view (2-3 years) and find them better over other Hidden Gems stocks in terms of valuations, earning visibility, debt management and integrity of promoters towards their business and interest of minority shareholders.

The 5 Hidden Gems stocks which we finalized have a market capital below 700 crores and seen a price correction between 20% to 60% from their peak (made is 2021 - 2022) without any major change in business fundamentals. We believe these stocks will outperform giving much better returns compared to broader indices in medium to long term. Our members can add these stocks in their portfolio with long term view (2 to 3 years at least). We suggest our members to start investing in these 6 Hidden Gems stocks with initial allocation of 1-2% and increase allocation gradually to 3-4% in staggered way in case stock prices of these companies falls by another 10% to 20% or more during ongoing market correction.
Important parameters which we looked into while finalizing stocks are as under:

1. Industry – Operating in Industry / sector which is expected to grow > 12% CAGR during next 3 years
2. Business – Leadership position in the business or one of its business segment in certain geography
3. Management – Prudent & trustworthy management keeping interest of minority share holders
4. Valuations – Reasonable / attractive valuations compared to peer group companies
5. Earnings – Consistent past performance & strong earning visibility with planned / recent expansion
6. Debt Management – Company is able to generate cash flows with low or reducing debt on books

If you wish to receive our Special Report - 5 Hidden Gems Stocks to Buy / Accumulate, you can subscribe to our Hidden Gems service. We will soon release another Special Report - 5 Value Picks Stocks to Buy / Accumulate in Feb 2023, you can subscribe to our Value Picks service, to receive the same.

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong small and mid cap companies - Hidden Gems and Value Picks.

Moreover, if you have invested in stocks and believe that your investments are not performing well, subscribe to our Wealth-Builder service and get your portfolio reviewed by us. We will review fundamentals of the companies you are holding and guide you which stocks to hold and which to exit. We will also review your equity investments across sectors and companies to ensure that your portfolio allocation is right and outperforms major indices giving you better returns in medium to long term.

Start building your equity portfolio by making educated investment decisions, subscribe to our Hidden GemsValue PicksWealth-BuilderNano Champs annual subscription services.

SARAL GYAN
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Combo 1: HG + VP + WB + 15%Rs. 55,000 44,000 (20% OFF)
Combo 2: HG + VP + 15%Rs. 27,000 22,000 (20% OFF)
Combo 3: HG + VPRs. 22,000 19,000 (14% OFF)
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Click here to know more about our services and discounts applicable on combo packs.

Do write to us at info@saralgyan.in in case of any queries, we will be delighted to assist you.

Regards,
Team - Saral Gyan

Saturday, January 28, 2023

Nano Champs Performance Post Adani Group Stocks Crash

Dear Reader,

The year 2022 turned out be a dull year for broader market as more than 70% small and mid caps are down by 30% to 70% from their peak made in 2021. Market participants were hopeful that new year 2023 will start with a bang with budget around the corner and positive global cues. However, recent crash of Adani stocks post release of Hindenburg research report with various allegations on Adani Group has further dented the market sentiments.

New investors who invested in the year 2020 - 2021 thinking that making money from stock market is very easy might have experienced the harsh reality looking at their losses widening in the year 2022 and beginning of 2023. Since the equity market is volatile, it is advisable to invest for the medium to long term.

In a time frame of 5 years and beyond, even despite the volatility, markets tend to give an above average return. For example, Sensex has given a CAGR of 17% over the past 5 years which means investing for the long term is a gainful strategy. It is often said that a consistent patient investor always wins in the long term. Warren Buffet rightly said that “The stock market is a device for transferring money from the impatient to the patient.”

We released our first issue of Nano Champs [Deeply Undervalued & Undiscovered Micro Caps] report on 09 Oct 2022. The objective of Nano Champs is to achieve 10X returns in a period of 6 years (6Y-10X). Under this service, we have researched on micro-sized companies with market capital of less 120 crores and put our efforts to identify the companies which are not only deeply undervalued but also have the potential to grow at faster pace.

The market capital of 10 Nano Champs stocks covered in the report is in the range of 25 crores to 120 crores. 
As there is always a higher risk involved while investing in micro caps, we have created a well diversified basket of 10 stocks from different sectors / industries. We advise our members to limit their maximum investment exposure in Nano Champs to 10 percent of their equity portfolio. It means, if your equity portfolio is of INR 10 lakh, the maximum allocation in Nano Champs will be 1 lakh i.e. 10k in each Nano Champs stock (maximum 10% in 10 Nano champs, maximum 1% of your equity portfolio in each Nano Champs).

In this report, for each Nano Champs stock, we have covered information related to:
i) Company's Business at a Glance (Important data points)
ii) Company's Background
iii) Financial Performance
iv) Investment Rationale
v) Recommendation & Buying Strategy

We will review these stocks on 6 monthly basis, we may also release an ad-hoc update in case of any major change or development happens in any of these particular companies. As Nano Champs are micro caps, the daily trading volume in some of Nano Champs is just a few thousand shares, hence its advisable to accumulate them over next few weeks / months as per buying strategy rather than aggressively buying them at one go.


We are glad to inform you that Nano Champs stocks are delivering average positive returns even after recent crash of Adani stocks and market under performance, Below is the performance update of 10 Nano Champs stocks released on 09 Oct 2022.
Nano Champs performance post Adani stocks crash

NANO CHAMPS - STOCK SELECTION PARAMETERS:

i) QUALITATIVE PARAMETERS:
  • Quality of Management - able & honest with good integrity
  • Promoter holding - should not be less than 45%
  • Pledging of shares by Promoters - should be nil
  • Demand & supply gap in the Industry - sustainability of business
  • Growth drivers - scalable business / catalyst in business
ii) QUANTITATIVE PARAMETERS:
  • Cash Flows - Positive operating cash flows
  • Leverage - Debt to equity ratio should be less than 1.5
  • Capacity expansion - Capex and financing through equity / debt
  • Visibility of future growth - Expected revenue and profitability
  • Management of Accounts - Any change in accounting policy
iii) VALUATION PARAMETERS:
  • Business valuations should be below its intrinsic value
  • Market capital to Revenue / Sales - should be less than 1
  • Relatively cheap business -  compared to peers and overall market

PAST PERFORMANCE (MARKET CAP < 200 CR):

S.NO

COMPANY

RELEASE DATE

MARKET CAP

X-BAGGER (IN 6 YRS)

% CAGR

OLD REPORT

1

CAMLIN FINE

27 MAR11

56 CR

21-BAGGER

66%

DOWNLOAD

2

WIM PLAST

30 AUG11

123 CR

17-BAGGER

60%

DOWNLOAD

3

KOVAI MEDI

27 OCT11

126 CR

13-BAGGER

53%

DOWNLOAD

4

ROTO PUMPS

05 AUG12

32 CR

9-BAGGER

44%

DOWNLOAD

5

ACRYSIL INDIA

25 NOV12

51 CR

8-BAGGER

41%

DOWNLOAD

6

TCPL PACK

31 JAN13

65 CR

11-BAGGER

49%

DOWNLOAD

7

DYNEMIC PRO

29 JUL14

52 CR

6-BAGGER

35%

DOWNLOAD

8

INDO BORAX

10 APR16

100 CR

7-BAGGER

38%

DOWNLOAD

9

STYLAM IND.

08 MAY16

159 CR

13-BAGGER

53%

DOWNLOAD

10

SAHYADRI IND

30 AUG17

166 CR

5-BAGGER

36%

DOWNLOAD


These companies were covered under Hidden Gems service over last 10 years, all above companies market capital was less than 200 crores at the time of recommendation. Over last 7 to 11 years, companies like Acrysil (51 Cr), Camlin Fine Sciences (56 Cr), Kovai Medical (126 Cr), TCPL Packaging (65 Cr), Roto Pumps (32 Cr) etc. have multiplied investment by 20X to 50X. You can click on the download link to access these reports.

Ongoing market correction is giving good opportunity to long term investors to start accumulating good quality companies at lower levels. Do not get panic if you recently started investing, riding through difficult times in equities is most important step towards long term wealth creation. In fact, we need to be greedy when others are fearful. If you wish to receive our first issue of Nano Champs you can subscribe to the service. 

SUBSCRIPTION OPTION

PAY VIA CARD

(3% CHARGES EXTRA)

Nano Champs– 1 Year  - Rs 12,000 10.800 (-10%)

SUBSCRIBE

Nano Champs– 3  Year - Rs. 30,000 27,000 (-10%)

SUBSCRIBE


Click here to know more about Nano Champs service.

Regards,
Team - Saral Gyan

Tuesday, June 18, 2019

Facts of Investing in Small & Micro Cap Companies

Value investor Warren Buffett also falls in the inefficiency camp, claiming that individual investors should be able to earn 50% annual returns with small amounts of money because they have access to high-return small-cap stocks that he can no longer buy because of Berkshire’s huge asset size

Facts about Small Cap Companies

1.If you want out sized returns, you must invest in small-cap value stocks.

2.All ten of the top-performing stocks of the past decade were small caps and most were value stocks. We can almost guarantee that the top-performing stocks of the next decade will be small caps as well.

3.Most small caps under perform, so the key is either finding the few small caps that will produce the 30, 40, and 50-baggers, or instead buying the entire small-cap universe to insure that you won’t miss out on the big winners.

4.Small caps have above-average volatility and can under perform for long periods, so their out sized returns may require a long time frame to be realized.

5.Whether small caps are inherently more risky or just inefficiently priced is undecided, but investment prudence dictates that you normally limit your small cap allocation to less than half (some say 35%) of your total equity portfolio and avoid them altogether during incipient periods of severe economic distress.

For a stock market investor, it is financial information of the company which guides him whether he should buy or sell the company’s stock. For a micro cap stock, this information is sometimes not available since some micro cap companies do not even file their financial reports to stock exchanges. Therefore, it is hard to evaluate a micro cap company using normal technical analysis methods.

What is a micro cap stock?

A micro cap company is a company having low or micro market capitalization. The term micro-cap stock (also micro-cap) is used to describe publicly traded companies which have a market capitalization of roughly Rs. 500 crore or less. Micro cap stocks are usually not able to satisfy the eligibility criteria of being listed on major exchanges.

Micro-cap companies are known for their volatility and many such companies are involved in fraud. Since the institutional investors are rarely involved in these stocks, the stock price can be manipulated by the investors. Even though these stocks come in high risk category, investors can’t turn their eyes away from them since these can be highly profitable as well. These stocks have given higher returns than large cap stocks since last 10 years. This is the reason there are a few indices specially track the performance of micro cap stocks globally. Some of these indices are Russell Micro-cap Index, the Dow Jones Select Micro-cap Indexes, and the Dow Jones Wilshire U.S. Micro-Cap Index.

In India, BSE Small Cap Index is a well known index. BSE Small Cap Index is a composition of 865 companies. Its good to point out that most of the fortune investors invested in small/micro cap stocks in early stage of their lives, hence a small pie of your portfolio could be of small / micro cap stocks, which can have the potential to change your fortune in years to come by turning to true multibaggers creating enormous wealth.

Grow your Wealth by Investing in Hidden Gems Now!

Its a fact that 50 small and micro cap stocks out of 87 recommended by our team under Hidden Gems service during last 9 years have given more than 100% returns. Stocks like Cera Sanitaryware, Camlin Fine Sciences, Kovai Medical, Wim Plast, TCPL Packaging, Mayur Uniquoter, Roto Pumps etc are our multibagger stocks have given whopping returns in the range of 400% to 2000%.

Below are some of the Hidden Gems stocks released by us which turned out be multibaggers during last 9 years. Even after severe correction in small caps over last 1.5 years, as on date returns is in the range of 150% to 1800%.  In fact, we already advised partial / full profit booking in many of these stocks at higher levels. The update of the same was published in our Hidden Gems Flash Back report.

 HIDDEN GEMS STOCKS 
 RELEASE DATE 
 MULTIBAGGER 
OLD REPORT
1. Camlin Fine Sciences
27 Mar 2011 
8-BAGGER 
2. Wim Plast
30 Aug 2011 
5-BAGGER 
3. Kovai Medical
27 Oct 2011 
7-BAGGER 
4. Cera Sanitaryware
24 Dec 2011 
19-BAGGER
5. Mayur Uniquoter
31 Mar 2012 
5-BAGGER 
6. Roto Pumps
05 Aug 2012 
7-BAGGER 
7. Acrysil
25 Nov 2012 
5-BAGGER 
8. TCPL Packaging
31 Mar 2013 
5-BAGGER 
9. Rane Brake Lining
31 May 2014 
3-BAGGER 
10. Dynemic Products
29 Jul 2014 
2.5-BAGGER
11. Mold-Tek Packaging
22 Mar 2015 
2.5-BAGGER 
12. Visaka Industries
05 Jul 2015 
3-BAGGER 
13. Chemfab Alkalies
06 Sep 2015 
2.5-BAGGER 
14. Ultramarine Pi.
11 Oct 2015 
2.5-BAGGER 
15. Stylam Industries
08 May 2016 
3-BAGGER 

Post election outcome, Sensex & Nifty made all time high and delivered positive returns of ~15% since Jan 2018 where as broader markets i.e. Small Cap and Mid Cap indices delivered negative returns of 29% and 20% respectively during the same period. Most of the liquidity in small & mid caps has dried up and found its way to large caps over last 1.5 years. At this juncture, large caps looks fairly valued or expensive in terms of valuations, however small & mid cap companies look attractive and can reward long term investors in big way. In fact, some of the worst times to get into the market turned out to be the best times for long term investors and same seems to be applicable now for small & mid caps.

Small Cap Index has not delivered negative returns for 2 consecutive years in past 16 years

We believe this is a blessing in disguise because for the first time in many years, several small companies having robust business fundamentals are available at attractive valuations. Do you know in last 16 years, small cap index have not given negative returns for 2 consecutive years. In 2018, BSE Small Cap Index has given negative returns of -23.4% and since beginning of this year, index is down by another -4.4%. Below is the table which indicates Small Cap Index returns YoY since 1st April 2003 (the data is available from April 2003 onwards only in BSE).
BSE Small Cap Index 15 years yearly return table
Whenever, Small Cap Index delivered significantly high negative returns in a particular year during last 16 years, it has delivered double digit positive returns the very next year. The divergence between Sensex / Nifty and Small & Mid Cap Index will not last for long going forward considering valuations gap emerging between large caps in comparison to mid & small cap stocks.

Tide to turn favourable sooner than later for small cap stocks

If you analyse the bear phase of stock markets cycle since 1990, you will find that such bear phase has not lasted for more than 18 months. Small cap index which made high in Jan 2018 with end of its bull run corrected by -35% from its peak of 20,184 in Feb 2019 and we believe bottom in broader markets is already in place with lows made in Feb 2019 post Pulwama attack.

Greed which was seen in broader market (small & mid caps) in the year 2016 and 2017 has turned to fear these days. Are you also fearful? This is the time to do opposite of the herd, its time to be greedy when others are fearful. If you are not investing in equities during these opportune times and taking the back seat, you are making a bigger mistake.

Remember, in the long run, you do not make decent returns on your investments by following the herd i.e. when everyone is buying stocks; instead you get handsome returns on our investments by investing in stocks at significantly low prices as no one else is buying, and by selling to them when they come back in herd due to greed in future.

Be a disciplined investor who keep on investing in systematic way irrespective of market conditions and not an emotional investor who usually buy stocks during bull phase when stock prices are moving higher because of greed and sell them in panic during bear phase due to severe fall in stock prices, making mistake of buying high and selling low.