Everyone is looking for profitable investments, but has a little idea how to identify them. I am going to share my approach which has worked successfully in the recent past. I will also share few of my investment mistakes. I track stock market closely and always look for potential mid cap companies having potential to become large cap.
In the month of August 2016 I identify DHFL as a potential company, the company during that time successfully raised money from the market and its NCD issue got oversubscribed 4 times if I remember correctly. The company is in the business of landing and if they are able to raise funds then there is defiantly demand and housing finance is one of the most secured ways to fund. Without getting into much details I bought at Rs. 237 and today on March 1, 2017 I exited that investment @ Rs. 335 so around 41% return in 7 months time.
In the month of November 2016 I identified another company Cox&King @ Rs. 165. Travel market in India is growing and there are very limited listed companies available in this space. This company I also heard from various analysts as top pick so without getting into much detail I bought it. This investment also I exited today @ Rs. 191, so around 15% return in 4 months time.
In the month of November 2016 I identify another company City Union Bank @ Rs. 135; it’s a small bank growing steadily and has good potential, private sector banks are safest investment in India and I have made lot of money over a period in private sector banks. I did not analyse the Balance Sheet but saw profitability and also the NPA number and decided to put my money, it went up to 168 I exited in the month of February @ Rs. 155, so again around 15% returns in 4 months time.
In the month of August 2016 I identified another bank ( my favourite sector ) Federal Bank and with some simple analysis I put the money @ Rs. 62 I still hold that investment the today’s closing rate was Rs. 88 so around 42% return I am getting on my investment in less than 7 months.
In the month of October 2015 I bought Syngene International a Biocon Group Company. The company came out with an IPO price of Rs. 260 but I bought it @ 360. The rationale for that investment is that its a unique company and managed by good promoter with steady growth rate. I didn’t analyse the Balance Sheet much just saw the shareholding pattern and profitability history and put my money into it. It went Rs. 617 currently quoting @ Rs. 500 I am still holding that investment, so I am getting a return of 39% in 16 months time.
All the above investments are based on my analysis without any recommendation from anyone, so commonsense works most of the time. I had some failure stories as well.
I bought Network 18 Media & Investments in the month of June 2016 purely on the success of book my show @ Rs. 42.50. Current rate is Rs. 39 so almost no return for more than 18 months and I am still holding that investment.
I took a large position in Just dial in June 2015 @ Rs.1000 around. The rationale for that investment is that just dial has good market reach, they were coming out with new products, the company announced buy back @ Rs. 1650. I attended the AGM of the company and met CFO and CEO and they were very confident and assure me that they will be launching some advertisement champagne for the new products. Nothing worked and I had to exit that investment @ around Rs. 650 so around 35% losses in 1 year. The learning I had from that is never take a concentrated position on one stock.
So I am not suggesting that you don’t analyse the Balance Sheet but along with your analysis the commonsense is most important part in deciding the investment.
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