Portfolio Review

Dear Experts,

I have the following portfolio.

NAVA BHARAT 10%
ONGC 9%
PUNJ LLOYD 24%
TITAN 14%
L & T 12%
CANARA BANK 13%
BLUE STAR 10%
VOLTAS 5%
ASHOK LEYLAND 3%

Reviews/suggestions/comments are welcome. My outlook is for the next 10 years or more.

Happy Investing !!

I assume with Nava bharat you mean Nava Bahart ventures. If that's so, you are concentrationg too much on capital goods which has been underperformance since inflation and rise in interest rates. Even if you want to have penetration in CG, keep LnT and forget others.

Punj lloyd is worst performing infra CG company and living on speculators will these days. Company has a very healthy order book, execution history but still they keep showing losses after losses every new quarter. Punj is "eye-close" buy if it gives a full year of profit in qaurterly result. Even if you end buying 20-30% higher, it make sense as share is down by almost 70% it's peak! Until than bid goodbye to Punj, it's only going lower and lower with every new quarter. Check it's price history!

ONGC is pretty confusing story. Govt can't live without ONGC but it has lobby filled with Reliance backing power-holders. With multimillion FPO round the corner and with FPOs being treaded pretty badly by investor, you can sell your shares once FPO is declared and not before that. Bid for same quantity you hold in FPO, get 5% discount and a lower than market price allotment.

Titan is dark horse which everyone wants to ride just like jubilant food. Titan has changed is business knowing watches now are no more used and nakshtra is popular brand in jewellary these days. It can remain dark horse or can become HMT if any new compition comes. Until new compition arises, keep Titan.

LnT is best stock you picked but next year with 9 divisions and all new CEOs and directors and without AM Naik, will LnT perform as it is doing, a big question mark. Having said this, LnT still hold ground in any portfolio!

Ashok Leyland is dead story now. Trucks = 70% Tata 25% Mahindra and 5% AL. So why not buy multi vehical maker Tata or were Indian growth story is intact, Bajaj auto? With high price rises of fuel, high loan costs and lesser frieghts, trucks sells are down to low and expected to remain low for next few years. Instead buy bajaj or tata motors which have either small towns and village penetration or big chain of products.

Voltas and Bluestar are from same feild so I'll be buying say NMDC or Coal India or PFC/REC instead of one of these. Since bluestar has higher percentage but drop is sales also high, I'll sell bluestar on a good day and buy any PSU navaratna on a bad day. Canara Bank is ok kind of bank, when bank nifty runs, can bank too runs when it falls, can bank also falls. I'll be happy with Syndicate or Andhra bank in small size banks in PSU, indusind or yes in pvt banks.

All and all your portfolio is too much infra related which has seen worst performance so far since 2008 fall. If govt do not release new orders in last 2 years of it's power these stocks will keep going down barring LnT which has sound order book, good management and skillful manpower. tata steel is way better than Nava Bharat Venture and Tata motors better than Ashok leyland. Titan is on a dream run. Keep it till dream is going sell it as and when dream is over without any second thoughts but don't worry on small knee jerks like what happened in past 2 weeks. Bluestar or Voltas, choose any one. Either a pharma share which is a secure bet or a PSU preferably from Power (not generation) fits instead of either 1 of 2. HUL/ITC/Nestle also fits any portfolio for safe and long term returns. You can keep adding any of them on dips.

asterix24, I like your posts on various mutual funds questions and read them without a miss. As you are asking about direct equity investment, so thought of sharing my views..(it might be a bit bitter pill here..)

10 years ? For the prospect of a corporate?
IMO, even if you ask the CEO of these companies, they will not be able tell with confidence. Infact, most of the time,they will be optimist and will fail to anticipate /accept the -ive performance or downplay the competition.
We are in such a dynamic world, where rate of change is increasing day by day. That makes old elephants difficult to adopt and change, whereas new companies just overtake them easily. (Check the case of microsoft v/s apple, google v/s facebook, Sbi in 1990s v/s hdfc or icici, TCS of early 90s v/s infy, wipro, hcl).

So IMO, to be realistic, it is better to be flexible in equity investment and ride the performer in chosen field/sector. It is easier to bet on a sector or secular theme then individual company. As you are putting your money on Media, oil and gas, infrastructure, bank, engg, auto.. so go ahead with this. Whether your bet is wrong or right only time will tell you. You will always have people who agree with your selection and there will always be people giving you extra sector. Finally it is your decision to make your selection.

Check out the following reality of your portfolio based on the price.
i.e. except 2 of them, all others have given -ive return in last 3 year and yet to beat the previous high. They all are great companies, analysts will tell all great fundamental stories about them..but reality is shown in their stock price. I am sure, if you dig deep into the sectors, then you will be able to find other companies that has given stock mkt performance then these stocks.

I believe in market, cause people who put the money here are financially smarter then analysts, ceo, media. If they are not convinced with company, the prices will not sustain in long term chart.

Hope you get my point.

To restructure my portfolio, I start with a clean board and ask the question - Will I buy this sector today / Will I buy this company today. If answer to any of these question is no, then time to get out of the stock.

And once in the stock/sector, I do answer the question - what will make me think about exiting from the sector / from the stock (Price, corporate action, action in the sector, development in economy etc). eg - when interest started going up and anybody is not thinking of exiting sector like auto or real estate..then he is not able to read the long term direction of economy.

Hope this give you few point to think about and to adjust your approach.
Sorry about not giving the straight forward answer,if that is what you were looking for.

Happy Investing.