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Thursday, October 31, 2024

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 reader base covering almost all major states in India and from 20 other countries across globe. During the last 12 years we have interacted with several investors seeking multibagger return from stocks. 

It was 17th Dec 2011, we covered 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 suggested adding it up 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 10,790 this year and currently trading around Rs. 7030, Cera is almost a 70-Bagger stock in 12 years from our initial coverage and is a 20X 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 2-3 years at least and not just 6 to 12 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 cap 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, market cap 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. 530 giving absolute returns of 867% i.e. more than 9 times in 7 years. In fact, we already advised partial profit booking in Rajratan Global Wires to our Hidden Gems around 2 years back at Rs. 1300, booking returns of 2270% (almost 24X) in period of 5 years.

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. 530 is still seems very high for those who looks at low price stock. 

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, EV/EBITDA, 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 10 years, we have reviewed many portfolio of our members under Wealth-Builder 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 business fundamentals of these companies. You may think that a two rupees stock can easily generate multibagger returns even if it touch to Rs. 10. At the same time don’t forget that the same stock 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, GTL Infrastructure, 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 Nano ChampsHidden Gems & Value Picks & Wealth-Builder.

The stocks we reveal through Nano ChampsHidden 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.

We are pleased to inform that we are celebrating this festive season by offering maximum benefit to our members. You can avail discounts up to 30% and valuable freebies on our subscription services under Saral Gyan Dussehra Diwali Offer. Subscribe to our services and get rewarded by making smart investment decision in equities.

Attractive 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 10 Nov'24 only)
Discount of 10% on individual services, and up to 30% on Combo packs

2. Rs. 1 Lakh Diwali Muhurat Portfolio of 10 Stocks (To be released on 01 Nov'24)
Applicable under Hidden Gems / Value Picks / Wealth-Builder subscription

3. Special Report - 5 Stocks - Potential 5-Bagger in 5 Yrs (To be Released in Jan'25)
Applicable under Hidden Gems / Value Picks / Wealth-Builder subscription

4. Existing Portfolio Health Check Up (Review of existing stocks)
Applicable under Wealth-Builder subscription only

5. Three Hidden Gems Reports released in Past (Good to Buy / Accumulate at CMP) 
Applicable under Hidden Gems subscription only

6. Three Value Picks Reports released in Past (Good to Buy / Accumulate at CMP)
Applicable under Value Picks subscription only

Below table indicates subscription services and discounted prices valid up to 10 Nov 2024.

SARAL GYAN
SUBSCRIPTION SERVICE
DUSSEHRA DIWALI OFFER
ANNUAL SUBSCRIPTION PRICE
PAY VIA CARD
(3% CHARGES EXTRA)
Hidden GemsRs. 16,000 14,400 (10% OFF)
Value PicksRs. 11,000 9,900 (10% OFF)
15% @ 90 DaysRs. 6,000 (No Discount)
Wealth-BuilderRs. 32,000 28,800 (10% OFF)
Combo 1: HG + VP + WB + 15%Rs. 65,000 45,500 (30% OFF)
Combo 2: HG + VP + 15%Rs. 33,000 26,400 (20% OFF)
Combo 3: HG + VPRs. 27,000 22,680 (16% OFF)
Combo 4: HG + 15%Rs. 22,000 19,360 (12% OFF)
Combo 5: VP + 15%Rs. 17,000 15,130 (11% OFF)

There is no combo option for Nano Champs, you need to opt for this service separately.

SUBSCRIPTION OPTION

PAY VIA CARD

(3% CHARGES EXTRA)

Nano Champs– 1 Year  - Rs 14,000 12,600 (-10%)

SUBSCRIBE

Nano Champs– 3  Year - Rs. 42,000 35,700 (-15%)

SUBSCRIBE


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.

Wish you happy & safe Investing.

Regards,
Team - Saral Gyan

Wednesday, October 30, 2024

Past Performance: Hidden Gems, Value Picks & Nano Champs

Dear Reader,

Greetings from Team - Saral Gyan.

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 27% per annum, your corpus will be Rs. 50 lakh and your profits would be more than 3 times of your actual investments that too when you are investing a nominal amount of Rs. 10,000 on monthly basis. Impressive! Right?

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.

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 Stocks - Average Returns of 152.6% in 3.5 Years

Its appreciation and support of our readers that one of our most admired service - Hidden Gems ranks on top not only in performance but also on Google search engine. Try it out yourself by searching "Hidden Gems SIP" or "Unexplored Multibagger Small Caps" or "Best Hidden Gems Micro Caps" on Google, you will find our website www.saralgyan.in featuring on top in search results. Its your appreciation and word of mouth publicity which make our website featuring on 1st page in Google.

Hidden Gems continue to shine giving higher returns compared to all major indices. As on date, average returns of the last 33 Hidden Gems stocks (released till Sept 2024) over the last 3.5 years is 152.6%. Below is the performance update of Hidden Gems stocks released since March 2021.

Hidden Gems stocks like Lincoln Pharma, Pix Transmission, Ador Fontech, Uni Abex Alloy Products, Cupid, Som Distilleries, Patels Airtemp, Dynamic Cables, Indag Rubber, Bhagyanagar India, GEE, Pakka and V2 Retail turned multibagger delivering returns in the range of 100% to 1700%.

Value Picks Stocks - Average Returns of 78.2% in 3.5 Years
 
Value Picks also outperformed mid cap index delivering higher returns. As on date, average returns of the last 30 Value Picks stocks (released till Sept 2024) over the last 3.5 years is 78.2%. Below is the performance update of  Value Picks stocks released since March 2021.
12 Value Picks stocks - Dalmia Bharat Sugar, Dhampur Sugar, Glenmark Pharma, Hindustan Copper, Caplin Point, Surya Roshni, TTK Healthcare, Kewal Kiran Clothing, Natco Pharma, Care Ratings, National Aluminium and Technocraft Industries have achieved their target price delivering returns in the range of 60% to 300%. Moreover, 18 out of 30 stocks are delivering more than 50 percent returns to our members.

Nano Champs Stocks - Average Returns of 90.9% in 2 Year
 
Nano Champs stocks have delivered average returns of 90.9% over the last two year. Five updates have been released under Nano Champs service with total 6 new stock picks over the last 1.5 years.
Time has shown that smart investors have made their fortune by investing in equities in the long term. None other asset class can match giving you such extraordinary returns. Yes, it's important for you to invest in the right set of companies at the right price.

Grow your Wealth by Investing in Potential Multibagger Stocks

Multibagger Hidden Gems Stocks
Its a fact that 92 Hidden Gems stocks out of 130 released during last 13 years have given more than 100% returns to our members. Moreover, 49 stocks out of these 92 are giving returns in the range of 400% to 7000%. Stocks like Cera Sanitaryware, Camlin Fine Sciences, Acrysil, Balaji Amines, Kovai Medical, Wim Plast, Mayur Uniquoter, Dynemic Products, Roto Pumps, TCPL Packaging, Globus Spirits, Rajratan Global Wires, Stylam Industries etc are some of our multibagger stocks which have given whopping returns in the range of 900% to 7000%.

The stocks we reveal through Nano ChampsHidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. Remember, "If you want your Money to Grow, Equities is the only Way to Go" in long term. If you think to invest in stocks for period of 6 months or say 12 months, we suggest you to stay out of stock market because you are not investing, you are betting on volatility of stock market which could be risky. 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.

We do update our members in terms of profit booking / exits depending upon various factors like overall Industry / Sector outlook, fundamentals of the company, management action plan and annual performance in terms of top line, bottom line, operating margins and other important parameters.

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong micro, small and mid cap companies Nano ChampsHidden Gems & Value PicksMoreover, 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.

We are delighted to share that we are celebrating this festive season by giving maximum benefits to our members. Now you can avail discounts up to 30% and valuable freebies under Saral Gyan Dussehra Diwali Offer. This is a limited period offer and closes on 10th November 2024.


Attractive 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 10 Nov'24 only)
Discount of 10% on individual services, and up to 30% on Combo packs

2. Rs. 1 Lakh Diwali Muhurat Portfolio of 10 Stocks (To be released on 01 Nov'24)
Applicable under Hidden Gems / Value Picks / Wealth-Builder subscription

3. Special Report - 5 Stocks - Potential 5-Bagger in 5 Yrs (To be Released in Jan'25)
Applicable under Hidden Gems / Value Picks / Wealth-Builder subscription

4. Existing Portfolio Health Check Up (Review of existing stocks)
Applicable under Wealth-Builder subscription only

5. Three Hidden Gems Reports released in Past (Good to Buy / Accumulate at CMP) 
Applicable under Hidden Gems subscription only

6. Three Value Picks Reports released in Past (Good to Buy / Accumulate at CMP)
Applicable under Value Picks subscription only

Below table indicates subscription services and discounted prices valid up to 10 Nov 2024.

SARAL GYAN
SUBSCRIPTION SERVICE
DUSSEHRA DIWALI OFFER
ANNUAL SUBSCRIPTION PRICE
PAY VIA CARD
(3% CHARGES EXTRA)
Hidden GemsRs. 16,000 14,400 (10% OFF)
Value PicksRs. 11,000 9,900 (10% OFF)
15% @ 90 DaysRs. 6,000 (No Discount)
Wealth-BuilderRs. 32,000 28,800 (10% OFF)
Combo 1: HG + VP + WB + 15%Rs. 65,000 45,500 (30% OFF)
Combo 2: HG + VP + 15%Rs. 33,000 26,400 (20% OFF)
Combo 3: HG + VPRs. 27,000 22,680 (16% OFF)
Combo 4: HG + 15%Rs. 22,000 19,360 (12% OFF)
Combo 5: VP + 15%Rs. 17,000 15,130 (11% OFF)

There is no combo option for Nano Champs, you need to opt for this service separately.

SUBSCRIPTION OPTION

PAY VIA CARD

(3% CHARGES EXTRA)

Nano Champs– 1 Year  - Rs 14,000 12,600 (-10%)

SUBSCRIBE

Nano Champs– 3  Year - Rs. 42,000 35,700 (-15%)

SUBSCRIBE


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.

Enjoy great savings and grab valuable reports under Dussehra Diwali Offer. Hurry! Its a limited period and closes on 10th Nov 2024. Click here for details.

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

Regards,
Team - Saral Gyan 

Releasing Soon - Diwali Muhurat Portfolio of 10 Stocks

 Dear Reader,

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 6.00 PM to 7.00 PM on the Diwali day, 01st November 2024 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 2081.

Since last year Diwali day i.e. 12th Nov 2023, Sensex and Nifty have given returns of 23.3% and 25.3% (as on date) respectively. The probability of getting similar returns like that of last year from small and mid caps in Samvat 2081 is high considering recent correction in broader market, modest inflation and expectation of lower interest rates going forward.

The future looks bright for Indian equities considering the reforms done by the Govt over last few years. Higher infra spending, incentive linked schemes to encourage investments in various sectors, favorable policies to boost local manufacturing are some of the initiatives which will continue to play a major role in supporting economic growth. With pick up in credit growth and rising consumption, we expect the companies from various sectors to report better revenue and profitability over next one year.

We are pleased to inform you that we are in process of selecting 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.

We will share Diwali Muhurat Portfolio 2024 of 10 stocks on 1st Nov'24 with all our paid subscribers of Hidden Gems, Value Picks & Wealth-Builder under Dussehra Diwali OfferIf you wish to receive our Rs. 1 Lakh Diwali Muhurat Portfolio - 2024 of 10 Stocks, you can subscribe to our services under Dussehra Diwali Offer 2024To know about the offer, click here.

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 will give different allocation to each of the scrips keeping in mind the risk versus returns ratio. We will 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 2024 will 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 Rs. 1 Lakh Diwali Muhurat Portfolio of 10 stocks of 2023 released by us on 12th Nov 2023. We are pleased to share that our portfolio has outperformed major indices Sensex and Nifty by 6.5% and 4.4% respectively. Sensex has delivered returns of 23.3% (64,905 on 12th Nov'23 to 79,942 as on date) and Nifty has given 25.3% returns (19,425 on 12th Nov'23 to 24,341 as on date) during the year where as Saral Gyan Diwali Muhurat Portfolio of 10 stocks have outperformed both indices giving absolute returns of 29.7% in the same period.

Performance update of our Best 10 Diwali Muhurat Stock Picks - 2023
As on date, seven stocks out of ten of our Diwali Muhurat Portfolio of last year are giving positive returns in the range of 7% to 80% while three stocks have given negative returns in the range of -5% to -17%.

The maximum returns were delivered by our Value Pick stocks, Natco Pharma has delivered returns of 80.4% followed by large cap Sun Pharma which is giving as on date returns of 57%. However, our Hidden Gems stocks like Aimco Pesticides, KIC Metaliks and Superhouse underperformed delivering negative returns over last one year.

Note: We will review these stocks and guide our members with buy / sell / hold updates in Diwali Muhurat Portfolio 2024. Our Diwali Muhurat Portfolio 2024 of 10 Stocks will be released on the auspicious day of Diwali i.e. 1st Nov 2024, it will be shared under Hidden Gems / Value Picks / Wealth-Builder service.

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 2024, it is more than 2,90,000 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.

Saral Gyan Diwali Muhurat Portfolio of 10 Stocks will be emailed to all our Hidden GemsValue Picks and Wealth-Builder members on 01st Nov'24. Portfolio stocks holding period is minimum of one year, same will be evaluated by our analysts next year before Diwali festival.

We are pleased to inform that we are celebrating this festive season by offering maximum benefit to our members. You can avail discounts up to 30% and valuable freebies on our subscription services under Saral Gyan Dussehra Diwali Offer. Subscribe to our services and get rewarded by making smart investment decision in equities.

Attractive 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 10 Nov'24 only)
Discount of 10% on individual services, and up to 30% on Combo packs

2. Rs. 1 Lakh Diwali Muhurat Portfolio of 10 Stocks (To be released on 01 Nov'24)
Applicable under Hidden Gems / Value Picks / Wealth-Builder subscription

3. Special Report - 5 Stocks - Potential 5-Bagger in 5 Yrs (To be Released in Jan'25)
Applicable under Hidden Gems / Value Picks / Wealth-Builder subscription

4. Existing Portfolio Health Check Up (Review of existing stocks)
Applicable under Wealth-Builder subscription only

5. Three Hidden Gems Reports released in Past (Good to Buy / Accumulate at CMP) 
Applicable under Hidden Gems subscription only

6. Three Value Picks Reports released in Past (Good to Buy / Accumulate at CMP)
Applicable under Value Picks subscription only

Below table indicates subscription services and discounted prices valid up to 10 Nov 2024.

SARAL GYAN
SUBSCRIPTION SERVICE
DUSSEHRA DIWALI OFFER
ANNUAL SUBSCRIPTION PRICE
PAY VIA CARD
(3% CHARGES EXTRA)
Hidden GemsRs. 16,000 14,400 (10% OFF)
Value PicksRs. 11,000 9,900 (10% OFF)
15% @ 90 DaysRs. 6,000 (No Discount)
Wealth-BuilderRs. 32,000 28,800 (10% OFF)
Combo 1: HG + VP + WB + 15%Rs. 65,000 45,500 (30% OFF)
Combo 2: HG + VP + 15%Rs. 33,000 26,400 (20% OFF)
Combo 3: HG + VPRs. 27,000 22,680 (16% OFF)
Combo 4: HG + 15%Rs. 22,000 19,360 (12% OFF)
Combo 5: VP + 15%Rs. 17,000 15,130 (11% OFF)

There is no combo option for Nano Champs, you need to opt for this service separately.

SUBSCRIPTION OPTION

PAY VIA CARD

(3% CHARGES EXTRA)

Nano Champs– 1 Year  - Rs 14,000 12,600 (-10%)

SUBSCRIBE

Nano Champs– 3  Year - Rs. 42,000 35,700 (-15%)

SUBSCRIBE


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.

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.

Wish you happy & safe Investing.

Regards,
Team - Saral Gyan