Stocks for the long and short term portfolio

[jamit_05]

ACC LTD.

A great company. But, it failed to display a breakout above 2013 highs. This leads me to think, either the breakout will come in not too distant future, that is, if there is steam left in Nifty to scale even higher.

OR (more importantly)

ACC will sharply correct, when Nifty corrects. This is because ACC is weak in numbers. Growth is not there, infra sector has not picked-up nor has construction.

Nifty corrects 10%, ACC, BHEL IDFC will correct 20%.

This may be a chance to buy a little.

 

[shreeux]

Hi,
Jamit_05

What about Havells India, Now splitted its right time to accumulate...or in Correction..?

 

[Catch22]

Sir , Is there any stock that you would suggest to enter now ,or in SIP form [if required ] For long term plz? Thank you.

 

[saivenkat]

Hi,
Jamit_05

What about Havells India, Now splitted its right time to accumulate...or in Correction..?

around 140 to 150:thumb:

 

[shreeux]

around 140 to 150:thumb:

NOw 294.55....Its possible 140 to 150?

 

[jamit_05]

No matter what the market, a good value investor would look for good stocks that are at low prices and low PEs. Stocks that have a good management but are in their downcycles or the ones that have not reached their potential. This is important.

If one purchased stocks that are expensive and Nifty were to lose 30% starting september, then expensive stocks will be the first to crash. A value investor has to pay attention to this risk.

This mindset is for investors who are going to make bulk investments. However, if one is going to SIP throughout his career as an investor, then the risk is much lower or even eliminated.

 

[lemondew]

Jamit how about Indian overseas bank. How do you look at it at 62 Rs now

 

[jamit_05]

Jamit how about Indian overseas bank. How do you look at it at 62 Rs now

It is cheap. Yet, could prove costly to an investor. It has Bad management. Would not recommend it to a long term investor. PSUs are knee-deep in controversies about NPAs, esp IoB.

 

[lemondew]

Yet govt would keep it alive. Management can be changed. Its owned by us isnt it.

It is cheap. Yet, could prove costly to an investor. It has Bad management. Would not recommend it to a long term investor. PSUs are knee-deep in controversies about NPAs, esp IoB.

 

[jamit_05]

IDFC - Chart Buster or Not?

Waiting for that day, till then keeping most of my funds in FD.

A value investor seeks stocks that are available at low price in return for the value the stock may give in future. So, lets see how one may investigate.

Consider, IDFC. Is it low priced for what it would offer in future? Can I expect a 20% Earnings Yield in 5 years. If so, then it is a stock to buy at 140 or 80, alike.

For argument, lets contrast it with another company. PGCIL. A PSU.

PGCIL ROA 6%; IDFC 2.5%
PE 15; 14.

Why then I don't just buy PGCIL or PFC instead. They have a way better ROA, established business, and consistent growth in numbers too? Yet, i see IDFC as a better fit. The answer lies in the future.

My Reasons to buy IDFC:

1) It is not a PSU. When going gets good it is likely to trade at PEs upwards of 20. Currently, PE 13;

2) HDFC lineage. Clean balance sheet, much better than most banks considering that infra is in downcycle. NPA 0.6

Most importantly, IDFC now has a banking licence. Setting up the channels may introduce uncertainties. But, with Deepak Parekh on the board of directors, I feel confident that management of IDFC will be steered back on track. It will only be a matter of time. And not of integrity.

Govt is leaning towards privatization of Infra; bridges, roads, toll bridges, railways, airports, passport offices etc. Therefore, the infra lending business of IDFC is printing a steady growth, and will continue to do so.

With more funds coming in via the banking route and increased scope for lending in infra I know IDFC will flourish in the decade to come.

Now, can I get such scope in PGCIL, PFC, NTPC? I don't expect to. That's why I think IDFC is a chart-buster in the making. But, it will be a decade long wait.

This motivates me put an insight to words:

The decision to buy a stock, the crux of it, lies in what the investor expects from the business in the future. The present is complete factored in. Nothing is at a discount or premium at CMP.