Patience is the key while investing in equities, start investing in fundamentally strong small and mid cap stocks to create wealth in long term.

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Showing posts with label Nano Champs. Show all posts
Showing posts with label Nano Champs. Show all posts

Monday, October 24, 2022

Multibagger Small Caps: Hidden Gems - SIP Returns @ 395%

Dear Reader,

A small investment of Rs. 10,000 a month over a period of 10 years can help you create a corpus of Rs. 25 lakhs. Total amount invested over period of 10 years by you will be Rs. 12 lakhs and you will have profit of Rs. 13 lakhs. Not Good? This might look less to you as we are assuming returns of 13.5% per annum. If we assume returns of 20% per annum, your corpus will be Rs. 38 lakh and your profits would be more than 2 times of your actual investments that too when you are investing a nominal amount of Rs. 10,000 on monthly basis. Impressive! Right?

Multibagger Small Cap Stocks SIP
You might think that investing in mutual funds could be one of the way to start SIP (Systematic Investment Plan). However, returns may not be that high which you can generate by directly investing into good quality small and mid cap stocks. Hence, we suggest our members to start SIP by directly investing in stocks every month. What you are suppose to do is to invest your savings in a particular stock once in a month instead of putting it into mutual fund. Next month, same amount would be invested in another stock which at that point of time gives you good medium to long term investment opportunity. This could be an ideal choice for salaried employees as well as businessmen / entrepreneurs, as it will help you to directly invest in fundamentally strong small and mid cap companies to build a diversified portfolio of high quality small and mid cap stocks over a period of time to achieve wealth creation.

Investing in stocks is a great way to build your diversified investment portfolio. It is a simple and time tested approach for accumulation of wealth in a disciplined manner. Simply get some savings from your monthly income and invest in equities for long term. It not only allows you to save every month in a disciplined way but also help you ride through ups and downs of stock market.

Invest some portion of your monthly income in good companies without timing the stock market and you will definitely get rewarded in long run. In fact, post severe correction witnessed in small and mid caps over last couple of years, we are confident that small & mid cap companies backed by good fundamentals will deliver far superior returns compared to large cap stocks in coming years.

Just take care of Basic Principle of Investing in Equities:

1. Invest in stock market with a long term view (3 - 7 years or more).
2. Invest in companies which are fundamentally strong with scalable business.
3. Follow disciplined approach by Investing regularly in equities.
4. Build a diversified portfolio by investing in small & mid cap companies.
5. Avoid frequent buying / selling of stocks, Its trading not Investing!
6. Review performance of your holding companies at least once a year to decide whether to buy / sell or hold.

Hidden Gems - SIP Returns @ 394.6% Vs Small Cap Index Returns @ 181.1%

It gives us immense pleasure to share that average returns of Saral Gyan 102 Hidden Gems stocks (Our Unexplored Multibagger Small Caps) released since inception (from Sept 2010 to Dec 2020) during last 12 years is 394.6% compared to 181.1% returns of BSE Small Cap Index. Monthly investment of Rs. 10,000 in Hidden Gems till Dec'20 during last 12 years not only allowed you to save Rs. 10.2 lakh but also appreciated your investment by 4 times making your total Hidden Gems stocks portfolio of Rs. 50.5 lakh with overall profit of Rs. 40 lakh (excluding dividends). However, if you would have invested the same amount in Small Cap index, you would be sitting with overall gains of Rs. 18.4 lakh.

Below is our Multibagger Stocks - Hidden Gems performance scorecard since inception  (from Sept 2010 to Dec 2020) which illustrates value of Rs. 10,000 invested every month in Hidden Gem (Unexplored Multibagger Small Cap Stocks) stock of the month vis a vis value of Rs. 10,000 invested in BSE Small Cap Index during last 12 years as on 15 Oct 2022.
Multibagger Hidden Gems Performance Oct 2022

We are glad to inform you that 65 Hidden Gems stocks out of 102 during last 10 years have given more than 100% returns to our members. Moreover, 24 stocks out of these 65 are giving returns in the range of 400% to 5900%. In fact, we advised to book partial or full profits / exits in many of these stocks during last couple of years.

Note: Total 102 Hidden Gems stocks were released (till Dec'20) during last 12 years, we have not released Hidden Gems for the months not displayed in the table above.

We also suggested our members, which earlier recommended Hidden Gems stocks can be added more in their portfolio based on company's strong fundamentals. Ex: Mayur Uniquoter, Cera Sanitaryware, Wim Plast, Camlin Fine Chemicals, Balaji Amines, Acrysil, Kovai Medical, Roto Pumps, Atul Auto, Control Print, Sahyadri Industries, Pondy Oxides, Visaka Industries and Stylam Industries were some of the stocks which we recommended to our members to accumulate later also at higher price from our initial recommended price. Also some of the stocks like Anil Ltd, PNB Gilts, Fiberweb etc which not performed up to our expectations have been suggested to exit at an early stage.

As we made most of these reports public, you can access read / download our research reports by clicking on the Read / Download link:
 
 SERVICE NAME  COMPANY NAME RELEASE DATE  MULTI-BAGGER  OLD REPORT 
 HIDDEN GEMS
SAB TV
05 Sep 2010
10-BAGGER
 HIDDEN GEMS
De Nora
07 Nov 2010 
  11-BAGGER
 HIDDEN GEMS
Camlin Fine
27 Mar 2011
21-BAGGER
 HIDDEN GEMS
Wim Plast
30 Aug 2011
5-BAGGER 
 HIDDEN GEMS
Kovai Medical
27 Oct 2011 
13-BAGGER
 HIDDEN GEMS
Cera Sanitary 
24 Dec 2011 
35-BAGGER
 HIDDEN GEMS
Mayur Uniq. 
31 Mar 2012 
9-BAGGER
 HIDDEN GEMS
Roto Pumps
05 Aug 2012 
21-BAGGER
 HIDDEN GEMS
Tide Water Oil
30 Oct 2012 
8-BAGGER 
 HIDDEN GEMS
Acrysil
30 Oct 2012 
27-BAGGER
 HIDDEN GEMS
Bambino Agro
25 Dec 2012 
6-BAGGER
 HIDDEN GEMS
TCPL Pack
31 Jan 2013 
18-BAGGER
 HIDDEN GEMS
Balaji Amines
01 Jan 2014 
60-BAGGER
 HIDDEN GEMS
Rane Brake 
31 May 2014 
5-BAGGER
 HIDDEN GEMS
Gulshan Poly 
29 Jun 2014 
6-BAGGER
 HIDDEN GEMS
Dynemic Prod. 
29 Jul 2014 
11-BAGGER
 HIDDEN GEMS
Acrysil
28 Dec 2014 
5-BAGGER
 HIDDEN GEMS
Mold-tek Pack. 
22 Mar 2015 
7-BAGGER
 HIDDEN GEMS
Visaka Ind 
05 Jul 2015 
6-BAGGER
 HIDDEN GEMS
Ultramarine
11 Oct 2015 
4-BAGGER
 HIDDEN GEMS
Indo Borax 
10 Apr 2016
5-BAGGER
DOWNLOAD
 HIDDEN GEMS
Stylam Ind 
08 May 2016 
10-BAGGER 
 HIDDEN GEMS
Shaily Eng. 
29 Jan 2017 
3-BAGGER
 HIDDEN GEMS
Sahyadri Ind 
30 Aug 2017 
4-BAGGER
 HIDDEN GEMS
Rajratan Global 
30 Nov 2017 
21-BAGGER
 HIDDEN GEMS
Globus Spirits 
12 Dec 2018 
5-BAGGER

We are confident that we will continue to hunt best Hidden Gems from universe of small caps by doing authentic, in-depth and unbiased research work and support our members to make educated investment decision.

Through Nano ChampsHidden Gems and Value Picks, we are providing you opportunities to invest in such small / mid cap stocks today. Infosys, Dabur, Glenmark, Bajaj Finance were the small cap stocks in past and today are the well known companies falling under mid and large cap space.

Nano Champs Hidden Gems Value Picks Wealth-Builder
If you wish to invest in fundamentally strong micro, small and mid cap companies which can give you far superior returns compared to major indices like Sensex or Nifty in long term and help you creating wealth, you can join our services like Nano ChampsHidden GemsValue Picks & Wealth-Builder.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

At Saral Gyan, team of equity analysts keep on evaluating small and mid cap stocks to explore the best Hidden Gems and Value Picks of stock market. Saral Gyan - Nano Champs, Hidden Gems and Value Picks are the micro, 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.

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

Regards,
Team - Saral Gyan

Diwali Muhurat Portfolio 2022 of 10 Stocks is Released!

Dear Reader,

Saral Gyan Diwali Dhamaka Offer
Saral Gyan team wishes you Happy Dhanteras & Diwali. May you have a fabulous festive week ahead!

Samvat 2079 (2022-23) Diwali Muhurat Date: 24 Oct’22 Time: 6.15 PM to 7.15 PM

Muhurat trading is the auspicious stock market trading for an hour on Diwali (Deepawali). It is a symbolic and old ritual, that has been retained and observed for ages, by the trading community. As Diwali also marks the beginning of the New Year, it is believed that muhurat trading on this day brings in wealth and prosperity throughout the year.

The "muhurat" trading session will be of 60 minutes, to be conducted between 6.15 PM to 7.15 PM on the Diwali day, 24th October 2022 on leading bourses NSE and BSE. The special trading session would be conducted to pay obeisance to Lakshmi, the Hindu goddess of wealth and prosperity. It would also mark the New Year for traders as per the Hindu calendar, or Samvat 2079.

Since last year Diwali day i.e. 04th Nov 2021, Sensex and Nifty have given negative returns of -0.8% and -1.4% (as on date) respectively. The probability of getting better returns compared to last year in Samvat 2079 is high considering correction in small and mid caps over last one year. Moreover, with fall in commodity prices, pick up in credit growth and valuations turning reasonable to attractive, broader market is expected to do better compared to major indices - Sensex & Nifty.

The future looks bright for Indian equities as most of the economic activities are back to pre-covid levels. Rising interest rates scenario and high inflation is a concern, however with fall in commodity prices,  pick up in credit growth and overall robust demand, we expect the companies from various sectors to report better revenue and profitability over next one year.

Diwali Muhurat Portfolio 2022
We are pleased to inform you that we have released Diwali Muhurat Portfolio 2022 of 10 stocks today on 24th Oct'22 and shared with all our active subscribers of Nano Champs, Hidden Gems, Value Picks and Wealth-Builder under Dussehra - Diwali Offer 2022 (closes on 31st Oct'22). To know about the offer, click here.

If you wish to receive our Rs. 1 Lakh Diwali Muhurat Portfolio - 2022 of 10 Stocks, you can subscribe to our services under Dussehra - Diwali Offer 2022. We will ensure to activate your subscription and share our Diwali Muhurat Portfolio at earliest today before Diwali Muhurat Session.

We have selected 10 scrips from universe of large, mid and small cap stocks which can benefit investors during next 1 year. We are confident that these carefully selected stocks can outperform major indices like Sensex and Nifty during next 12 months.

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 up to 1 Lakh.

We have given different allocation to each of the scrips keeping in mind the risk versus returns ratio. We have also fine tuned the portfolio with large cap, 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 Diwali Muhurat Portfolio of 10 Stocks for 2022 also include best of Hidden Gems and Value Picks recommended by our equity analyst’s team during last couple of years.

Its time to also review our Rs. 1 Lakh Diwali Muhurat Portfolio of 10 stocks of 2021 released by us on 04th Nov 2021. Sensex has given negative returns of -0.8% (59,772 on 04th Nov'21 to 59,307 as on date) and Nifty has given -1.4% returns (17,829 on 04th Nov'21 to 17,576 as on date) during the year where as Saral Gyan Diwali Muhurat Portfolio of 10 stocks have outperformed both indices giving absolute returns of 0.0% in same period.

Performance update of our Best 10 Diwali Muhurat Stock Picks - 2021
Diwali Muhurat Portfolio 2021 Performance Update

Five stocks out of ten of our Diwali Muhurat Portfolio of last year have given positive returns in the range of 9% to 20%. And another five stocks have given negative returns in the range of -3% to -32%.

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. In 2022, it is more than 2,36,000 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. A ROE of at least 15-20% is necessary to make into the hallowed list of model portfolio.

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

We know from past experience 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 shareholder's 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, mid and blue chips 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, some IT with a pinch of chemical, pharma etc will make a balanced portfolio.

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

Wish you happy & safe Investing.

Regards,
Team - Saral Gyan

Tuesday, October 18, 2022

Why Share Price is Not Important while Buying Stocks?

Dear Reader,

Why is a stock that cost Rs. 50 cheaper than another stock priced at Rs. 10?

This question opens a point that often confuses beginning investors: The per-share price of a stock is thought to convey some sense of value relative to other stocks. Nothing could be farther from the truth.

In fact, except for its use in some calculations, the per-share price is virtually meaningless to investors doing fundamental analysis. If you follow the technical analysis route to stock selection, it’s a different story, but for now let’s stick with fundamental analysis.

The reason we aren’t concerned with per-share price is that it is always changing and, since each company has a different number of outstanding shares, it doesn’t give us a clue to the value of the company. For that number, we need the market capitalization or market cap number.

The market cap is found by multiplying the per-share price times the total number of outstanding shares. This number gives you the total value of the company or stated another way, what it would cost to buy the whole company on the open market.

Here’s an example:

Stock price: Rs. 50

Outstanding shares: 5 Crores 

Market cap: Rs. 50 x 50,000,000 = Rs. 250 Crores

To prove our opening sentence, look at this second example:

Stock price: Rs. 10

Outstanding shares: 30 Crores 

Market cap: Rs. 10 x 300,000,000 = Rs. 300 Crores

This is how you should look at these two companies for evaluation purposes. Their per-share prices tell you nothing by themselves.

What does market cap tell you?

First, it gives you a starting place for evaluation. When looking a stock, it should always be in a context. How does the company compare to others of a similar size in the same industry?

The market generally classifies stocks into three categories:

• Small Cap under Rs. 1000 Crores 

• Mid Cap Rs. 1000 - Rs. 10000 Crores

• Large Cap above Rs. 10000 Crores

Some analysts use different numbers and others add micro caps and mega caps, however the important point is to understand the value of comparing companies of similar size during your evaluation. You will also use market cap in your screens when looking for a certain size company to balance your portfolio. Don’t get hung up on the per-share price of a stock when making your evaluation. It really doesn't tell you much. Focus instead on the market cap to get a picture of the company’s value in the market place.

IMP Note: This article is written to safe-guard our readers who are new to stock market, and make them understand about the actual facts. We keep on receiving mails from our readers regarding the price range of stocks we covers under our Hidden Gems or Value Picks service. The misconception in mind of new investors is regarding the stock price, majority of them believe that if stock price is less, like below Rs. 50 or even below Rs. 10, changes of stock price appreciation is very high and they can buy more no. of shares rather than buying a limited no. of shares of high priced stock. 

We have a subscriber base covering almost all major states in India and from 20 other countries across globe. During the last 10 years we have interacted with several investors seeking multibagger return from stocks. 

It was 17th Dec 2011, we recommended Cera Sanitaryware as Hidden Gem stock of the month at price of Rs 157, later it went up to Rs. 450 in period of 15 months. Based on strong quarterly numbers, attractive valuations and consistent performance, we recommended buy again in the range of 400-450 which was taken as a surprise by our members as we received several queries and feedback.

Below are some of the common queries of our subscribers which often lead them to opportunity losses.

1. How come a stock priced at Rs 450 can generate Multibagger returns?
2. Cera is almost 3 times moving from 170 to 450, why are you suggesting buy again?
3. Where is the room to generate Multibagger return from this level?
4. I don’t like such high-priced stock, please give me stocks priced below Rs. 100.
5. I want to buy more no. of shares, hence please recommend low price stocks below Rs. 10.

Cera Sanitaryware touched its life time high of Rs 6450 last year and currently trading around Rs. 5500, Cera is a 40-Bagger stock in 11 years from our initial recommendation and is a 12X stock from our reiterated buy at Rs. 450, which was not liked by our subscribers.

The story does not end here, there is a long way to go. Our suggested stocks is with a view-point of 1-3 years at least and not just 6-9 months. If fundamentals of the company are intact, we would not suggest our members to do profit booking or exit. Investors who stayed away just because of high price simply missed yet another opportunity. We held Cera for long term and suggested complete profit booking to our members in the stock around 3500 - 4000 levels in 2017.

There is a general misconception among the investors that high priced stocks can't generate multibagger returns. They often think that high-priced stocks are overvalued. In terms of valuation, a 50 rupees stock may not be cheaper than that of a 1000 rupees stock. There is no co-relation between the valuation and market price of a stock. To understand whether a company is small or large, you must look at market capital of the company and not at stock price. To judge valuation you must have to look at Price to earning ratio, Price to book ratio, Price to sales ratio etc.

Lets try to understand this with an example, Rajratan Global Wires share price was Rs. 54.77 on 30 Nov 2017 (stock split and bonus issue adjusted price, actual price was 639). Today the stock price is at Rs. 1225 giving absolute returns of 2137% i.e. more than 22 times within 5 years against double digit return of Sensex in the same period. 

We suggested Buy on Rajratan Global Wires at price of Rs. 639 under Hidden Gems service on 30 Nov 2017 and if any of our subscribers have not invested in the company thinking he/she can get only 15 shares by investing Rs. 10,000 has made a big mistake. Today those 15 shares have increased to 175 shares on account of bonus shares issued by the company in the ratio of 4:3 in 2019 and later stock split of 1 shares into 5 shares (face value of Rs. 10 to Rs 2 per share) in March 2022. And the current share price of Rs. 1225 is still very high for those who looks at low price stock. We advised partial profit booking in Rajratan Global Wires to our Hidden Gems recently at Rs. 1300, booking returns of 2270% (almost 24X) in period of 5 years.

There are many examples like above by which we can illustrate that there’s nothing called high price. Multibagger returns is not dependent on the current market price of a stock, so don't be afraid of investing in high priced stock. You need to look at fundamentals like future growth prospects of the company, PE ratio, PB ratio, ROE, ROCE, debt on books, cash reserves along with other parameters to judge a stock whether it is undervalued or overvalued. We agree with you that judging valuation is not an easy task. So, take expert’s advise when ever required.

Another misconception among investors is to buy more no. of shares. They often think that its better to buy more no. of shares of a low price scrip (ranging below Rs. 10 or say below Rs. 50) instead of buying less no. of shares of high priced stocks. They often think that low price stocks can generate multibagger return quickly. During last 5 years, we have reviewed existing portfolio of our members under our Wealth-Builder (an offline portfolio management service) subscription, we have noticed that many of their portfolio is filled with such low-priced stocks and most of those are in great loss because of poor fundamentals. You may think that a two rupees stock can easily generate multibagger returns even if it touch to Rs. 5 or 6. At the same time don’t forget that the same can even come down to Rs. 0 levels which can evaporate all your investment giving you 100% loss! In terms of valuation a two thousand rupees stock may not be expensive than that of a two rupees stock.

Lets try to understand this also with a simple example, Lanco Infratech was a well-known company from Infrastructure sector. At the beginning of 2010 the stock was around Rs 55. After 10 years, it was hovering at just Rs 1.30 and today its not operational any more. Those who purchased the stock during 2010 are in 100% loss! Rs. 1 lakh invested in Lanco Infratech in Jan 2010 was valued at merely Rs. 2,000 in 2020, a complete wealth-destroyer! Isn't it? Those who bought this stock at levels of Rs. 30 and later again at Rs. 10 or Rs. 5 to average out thinking that stock has came down from all time highs of Rs. 85 are still waiting to get their buying price back. There are many such stocks like Suzlon Energy, GMR Infra, GVK Power and Infrastructure etc which have continuously destroyed wealth of investors over a period of last 5 to 10 years.

We do not state that all low price stocks are wealth-destroyers, it all depends on the fundamentals of the company. So, do ensure that you check out the fundamentals and valuations while investing in stocks instead of looking at stock price. Please get out of the misconception that low priced stocks will fly high faster giving you extra-ordinary returns. Always remember that stock price is just a barometer, actual valuations of a company can be determined by its fundamentals.

If you wish to invest in fundamentally strong micro, small and mid cap companies which can give you far superior returns compared to major indices like Sensex or Nifty in long term and help you creating wealth, you can join our services like Hidden GemsValue Picks & Wealth-Builder.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

At Saral Gyan, team of equity analysts keep on evaluating small and mid cap stocks to explore the best Hidden Gems and Value Picks of stock market. Saral Gyan - Nano Champs, Hidden Gems and Value Picks are the micro, 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.

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

Regards,
Team - Saral Gyan

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.

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

Regards,
Team - Saral Gyan