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Greetings from Team - Saral Gyan!
We are pleased to inform you that we have released our Portfolio of 10 Mid and Small caps for FY 2024-25 on 31st March 2024 and shared it with all our active members of Hidden Gems, Value Picks and Wealth-Builder. We are confident that these carefully selected stocks can outperform major indices like Sensex and Nifty over the next 12 months.
If you wish to receive our Portfolio of 10 Mid and Small Caps for FY 2024-25, you can opt for an annual subscription of Hidden Gems, Value Picks, Wealth-Builder or any of the combo packs. We will ensure to activate your subscription ASAP and share the recently released Saral Gyan Portfolio of 10 Stocks for FY 2024-25 on your registered email Id.
Performance update of Saral Gyan Portfolio of 10 Small & Mid Caps for FY 2023-24
We are glad to share the performance update of Saral Gyan Portfolio of 10 stocks of FY 2023-24 released by us last year on 4th April 2023. Our portfolio has outperformed Sensex by 101.3%, Sensex has given returns of 24.5% (59,106 on 4th April '23 to 73,561 as on date) since beginning of current financial year where as Saral Gyan Portfolio of 10 stocks of FY 2023-24 have delivered absolute returns of 125.8% in the same period.
Eight stocks out of ten of our FY 2023-24 portfolio are giving positive returns in the range of 1% to 852% and two stocks have given negative returns of -2% and -15%.
The maximum returns of 852% were delivered by our Hidden Gem stock Cupid while our Value Picks stocks like Natco Pharma, Hindustan Copper, Care Ratings have delivered returns in the range of 60% to 170% over the last 12 months. Apex Frozen Foods and Superhouse underperformed the major indices delivering negative returns of -2% and -17% respectively.
Note: We have reviewed these stocks and guided our members with buy / sell / hold updates in our Portfolio of 10 Stocks for FY 2024-25 (released on 31st March 2024).
(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 around ~3,00,000 crores. The fact that India is a booming marketplace of 140 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 and 2019 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. Rising ROE or ROE above 15% 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 return of 20% 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 multi-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, some pharmaceuticals, a pinch of chemical etc will make a balanced portfolio.
Saral Gyan Portfolio of 10 Small and Mid Caps for FY 2024-25 has been emailed to all our Hidden Gems, Value Picks and Wealth-Builder membe
Do write to us in case of any queries, we will be delighted to assist you.
Wishing you Happy & Safe Investing!
Regards,
Team - Saral Gyan.
