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NANO CHAMPS (DEEPLY UNDERVALUED & UNDISCOVERED MICRO CAPS)

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SARAL GYAN ANNUAL SUBSCRIPTION SERVICES

Tuesday, September 20, 2022

Saral Gyan Nano Champs



We are glad to introduce our new service – Nano Champs (deeply undervalued & undiscovered micro caps) with an objective to achieve 10X returns in a period of 6 years (6Y-10X). Under this service, we will research on micro-sized companies with market capital of less than 100 crores and put our efforts to identify the companies which are not only deeply undervalued (available well below their intrinsic value) but also have potential to grow at a faster pace. 

As there is always a higher risk involved while investing in micro caps, we will have a well diversified basket of 10 stocks from different sectors / industries under this service. Based on our past experience, we realized that micro caps have the potential to deliver maximum returns (higher than small caps and much higher compared to mid and large caps). However, as the universe of micro caps is large enough, picking the right companies requires extensive research. Another very important aspect of investing in micro caps is patience, stock prices of micro caps consolidate for longer time period and deliver maximum returns in shortest span of time. Some of our micro caps which we picked when market capital was less than 100 crores have created enormous wealth for our members over last decade. 

You will agree that Investment decisions for the long term can’t be taken by timing the market movement. It is important to understand the Industry potential, company’s fundamentals and valuations with a real long term perspective. This service is suitable for those investors who have an investment horizon of more than 5 years, want to see some of their stocks turning out to 5X, 10X, 20X or even 50X to 100X over next 5 to 10 years, and have the courage to digest the negative returns of 40 to 70 percent from top during market crash / bear phase of the market.

NANO CHAMPS SUBSCRIPTION DETAILS:

SUBSCRIPTION:

1 YEAR & 3 YEARS

SUBSCRIPTION PRICE (1 YEAR):

INR 12,000

SUBSCRIPTION PRICE (3 YEARS):

INR 30,000

NO. OF REPORTS:

BI-ANNUALLY (2 PER YEAR)

EACH REPORT CONTAINS:

10 NANO CHAMPS STOCKS UPDATE

ENTRY / EXIT UPDATE:

AD HOC (AS & WHEN THE NEED ARISE)

PROFIT BOOKING:

AS PER THE PROFIT BOOKING STRATEGY

ACCESS TO REPORT & UPDATES:

WILL BE SENT TO REGISTERED EMAIL ID

1ST REPORT SCHEDULE RELEASE

 MID OCT 2022



NANO CHAMPS - INVESTMENT HORIZON: 5 YEARS & ABOVE

The time frame over which investors stay invested in a particular asset class is referred to as an investment horizon. Determining the investment horizon is one key decision an investor must take in the investing journey. 

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. 

BSE SMALL CAP INDEX - YEARLY RETURNS

YEAR

1ST JAN 

START YEAR

1ST JAN 

NEXT YEAR

RETURN %

  2003*

834.59

2481.95

197.4%

2004

2481.95

3505.83

41.3%

2005

3505.83

6027.56

71.9%

2006

6027.56

7004.1

16.2%

2007

7004.1

13703.07

95.6%

2008

13703.07

3810.41

-72.2%

2009

3810.41

8491.73

122.9%

2010

8491.73

9845.05

15.9%

2011

9845.05

5556.48

-43.6%

2012

5556.48

7452.88

34.1%

2013

7452.88

6649.16

-10.8%

2014

6649.16

11225.22

68.8%

2015

11225.22

11940.75

6.4%

2016

11940.75

12190.15

2.1%

2017

12190.15

19279.96

58.2%

2018

19279.96

14766.86

-23.4%

2019

14766.86

13786.69

-6.6%

2020

13786.69

18261.03

32.5%

2021

18261.03

29807.95

63.2%

2022

29807.95

(01 Sep'22) 28789.30

-3.2%

* starting 1st April 2003

Source: BSE


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.”

NANO CHAMPS - EXPECTED RETURNS:

NANO CHAMPS – EXPECTED RETURNS:

BEST CASE SCENARIO

COMPANY NAME

MARKET CAPITAL

INV. AMOUNT

PERIOD

(IN YRS)

X

TIMES

EST. CAGR

NET

RETURNS

XXX1

< 100 CR

10,000

6

10X

 47%

 100000

XXX2

< 100 CR

10,000

6

10X

 47%

  100000

XXX3

< 100 CR

10,000

6

10X

 47%

 100000

XXX4

< 100 CR

10,000

6

10X

 47%

 100000

XXX5

< 100 CR

10,000

6

10X

 47%

 100000

XXX6

< 100 CR

10,000

6

10X

 47%

 100000

XXX7

< 100 CR

10,000

6

10X

 47%

 100000

XXX8

< 100 CR

10,000

6

10X

 47%

 100000

XXX9

< 100 CR

10,000

6

10X

 47%

 100000

XX10

< 100 CR

10,000

6

10X

 47%

 100000

INV. AMOUNT

1,00,000

 ROI:

10X

47%

1000000


As illustrated in the table above, if all 10 Nano Champs stocks deliver 10X returns over period of 6 years (best case scenario), the investment capital will grow by 47% CAGR. If only 4 stocks out of 10 deliver 10X returns, other 3 stocks deliver half of expected returns and remaining 3 stocks deliver 0 returns, investment capital with grow at CAGR of 35% delivering 6X returns. 

NANO CHAMPS – EXPECTED RETURNS:

BULL CASE SCENARIO

COMPANY NAME

MARKET CAPITAL

INV. AMOUNT

PERIOD

(IN YRS)

X

TIMES

EST. CAGR

NET RETURNS

XXX1

< 100 CR

10,000

6

10X

47%

 100000

XXX2

< 100 CR

10,000

6

10X

47%

  100000

XXX3

< 100 CR

10,000

6

10X

47%

 100000

XXX4

< 100 CR

10,000

6

10X

47%

 100000

XXX5

< 100 CR

10,000

6

7X

 38%

 70000

XXX6

< 100 CR

10,000

6

5X

 31%

 50000

XXX7

< 100 CR

10,000

6

5X

 31%

 50000

XXX8

< 100 CR

10,000

6

X

 0%

 10000

XXX9

< 100 CR

10,000

6

X

 0%

 10000

XX10

< 100 CR

10,000

6

X

 0%

 10000

INV. AMOUNT

1,00,000

ROI:

6X

35%

600000


Even if we take bear case scenario considering that only 2 out of 10 stocks deliver 10X returns and another 3 stocks deliver half of expected returns and remaining 5 stocks deliver 0 returns, investment capital will be quadrupled (4 times) in period of 6 years achieving CAGR of 26% which is also significantly higher compared to any other asset classes or major indices - Sensex and Nifty

NANO CHAMPS – EXPECTED RETURNS:

BEAR CASE SCENARIO

COMPANY NAME

MARKET CAPITAL

INV. AMOUNT

PERIOD

(IN YRS)

X

TIMES

EST. CAGR

NET RETURNS

XXX1

< 100 CR

10,000

6

10X

 47%

 100000

XXX2

< 100 CR

10,000

6

10X

 47%

  100000

XXX3

< 100 CR

10,000

6

5X

 38%

 50000

XXX4

< 100 CR

10,000

6

5X

 38%

 50000

XXX5

< 100 CR

10,000

6

5X

 38%

 50000

XXX6

< 100 CR

10,000

6

X

 0%

 10000

XXX7

< 100 CR

10,000

6

X

 0%

 10000

XXX8

< 100 CR

10,000

6

X

 0%

 10000

XXX9

< 100 CR

10,000

6

X

 0%

 10000

XX10

< 100 CR

10,000

6

X

 0%

 10000

INV. AMOUNT

1,00,000

ROI:

4X

26%

400000


However, we are confident to achieve CAGR returns of 35% to 45% over a period of 6 years by monitoring performance of these companies and taking corrective measures through entry in new stocks / exit in existing stock and following profit booking strategy.

NANO CHAMPS - PROFIT BOOKING STRATEGY:

PROFIT BOOKING STRATEGY  ILLUSTRATION:

NANO

CHAMPS

PORTFOLIO 

ALLOCATN

INITIAL / POST 

INV. VALUE

ROI

CURRENT

VALUE

PROFIT BOOKING

PROFIT BOOKING AMOUNT

STK-01

1.00%

10,000

3X

30,000

 30%

 9,000

STK-01

0.70%

7,000

5X

35,000

 30%

  10,500

STK-01

0.40%

4,000

10X

40,000

 100%

 40,000


As per profit booking strategy, 30% profit has to be booked once a particular Nano Champ stock delivers 3X returns, another 30% profit will be booked once stock turns 5-Bagger and full profit booking can be done once Nano Champ stock delivers 10X returns.

Q: Why profit booking before 10X returns?

A: Mostly, once a stock delivers 3X or say 5X returns over a period of time during market upturn, it also falls by 30 – 60 percent during market downturn. Profit booking strategy not only ensure that you take out your initial investment capital but also give you a cushion to invest in same stock later at lower levels during market / sector down cycle.

Q: Why initial investment allocation is just one percent?

A: As Nano Champs are micro cap companies having less liquidity and high volatility, we suggested 1% allocation in each stock. In fact, just 1% allocation can do wonders in long term. Assuming that your portfolio value is of 10 lakh, you invest 10,000 each (1% of 10 lakh) in all 10 Nano Champs (1 lakh allocation in total 10 stocks) and continue to hold them, now If only 2 Nano Champs stocks turn out to be 50-Bagger stocks in period of 6 to 12 years, it will make up your entire portfolio value (10 lakhs).


NANO CHAMPS - STOCK SELECTION PARAMETERS:

QUALITATIVE PARAMETERS

Quality of Management – able & honest with good integrity

Promoters 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

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 

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. Please note that Nano Champs will not cover the stocks which were already covered under Hidden Gems service, so there will not be any over-lapping of stocks. However, there is a possibility that Nano Champs of today may get recommended after couple of years under Hidden Gem service so that our members can either continue holding the stock or may increase the investment allocation from 1 percent to 2-3 percent of portfolio

NANO CHAMPS - FAQS:

FREQUENTLY ASKED QUESTIONS

Q: What is the subscription period of Nano Champs?

A: We offer 1 year and 3 years subscription for Nano Champs service. You need to renew your subscription every year / every 3 years to continue receiving the Nano Champs update.

Q: How many reports will I get under Nano Champs service?

A: You will get 2 detailed reports with coverage of 10 Nano Champs every year. Moreover, you will also receive individual stock specific update in case of any entry of new stock / exit of existing stock or profit booking update as per defined profit booking strategy.

Q: Shall the report covers 10 new stocks in every detailed report?

A: This report will cover 10 Nano Champs stocks and update about these stocks only in next issue. As this report will be released on 6 monthly basis, there may be changes (entry / exit) based on covered companies business developments / change in govt policies / sector tailwinds or headwinds etc

Q: What if a particular stock rice goes down by 30% to 40%?

A: Nano Champs are less liquid stocks, hence we will advise a price range to accumulate them slowly over a period of time. There is a high possibility that a particular stock price rises or fall by 30 to 40 percent in short term, however being a long term investor, you need to simply hold the stock. 

Q: What is suggested investment allocation in Nano Champs?

A: As Nano Champs are micro caps, we suggest maximum portfolio allocation of 10 percent in Nano Champs, 1 percent allocation to each Nano Champ stock.

SUBSCRIPTION OPTION

PAY VIA CREDIT CARD

NANO CHAMPS – 1 YEAR (INR 12,000 + 3%)

SUBSCRIBE

NANO CHAMPS – 3 YEARS (INR 30,000 + 3%)

SUBSCRIBE


NOTE- Additional charges of 3% applicable towards credit card payment.

Please write to us at info@saralgyan.in or sales@saralgyan.in in case of any queries.

Regards,
Team - Saral Gyan