Tuesday, 31 December 2013

2014- Model Portfolio

As promised in the last post, here is my Five stock model portfolio for 2014.

But rather than picking one portfolio, I have picked four different portfolio for four different investment styles.


Value Picks      Low PE     Medium PE             High PE
Nesco - 783      Canfin - 174     Repco - 348           Page - 5164
Selan - 304      RS Soft - 194     Astral - 330            ITC - 322
Piramal - 551        Acrysil - 205    Ajanta P - 946           Nestle - 5297
Noida Toll - 21.5      Avanti - 248 Symphony - 424          Gruh - 256
IL&FS Inv Managers -13      JB Chem - 129     PI Ind- 247          Sun Ph - 568
* stock picks along with recommended price


Value-picks Portfolio has stocks wherein there is a huge asset base supporting the market cap like Nesco has 700 acres of land in Bombay. But there is uncertainty about how that value will be realized. However, I feel, these five have potential of value-unlocking in 2014. Ben Graham & PPFAS Value Fund might well have these picks in their portfolio.

Low PE Portfolio (PE < 10) has stocks which are cheap relative to their current earnings & book value. These five have potential to beat the market in 2014. However, future visibility is low & hence market may not pay very high PE/ PB to these. Who will have these? Don't know... Maybe Howard Marks will have them.

Medium PE Portfolio (PE < 25) has stocks which are growing very fast currently & have good potential to keep doing that in next 2-3 years. These are stocks that have moved from small caps to mid caps in past few years & can become semi-large caps in next few years. Maybe Charlie Munger will have them.

High PE Portfolio (PE > 30) has stocks which are proven great stocks. The Tendulkar, The Kallis of investment world. These are the stocks to buy once market drops 30-40-50%. However, current high PEs makes investors worry whether they are paying too much or not! Stocks which will fall into portfolio of Philip Fisher.

PS- I/ Good investors I know are bullish on all the 20 stocks. I hold some in my portfolio and hence bound to be biased.

Lets see which portfolio performs the best in 2014.
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9 comments:

  1. Nasir Khambatta2 January 2014 at 16:18

    Thanks for sharing. Any insights for triggers for these companies would be good.

    ReplyDelete
  2. Salil2 January 2014 at 22:51

    Do you see value in them at CMP for next 2-3 years?

    ReplyDelete
    Replies
    1. Fundoo_Pupil2 January 2014 at 22:54

      Of-course I do. Tabhi toh pick kiye hain yeh :)
      You don't see value in these?

      Delete
  3. Salil3 January 2014 at 03:36

    I think I should have been more specific. No question about Low and Medium PE ones. Fully agree. However doubts about High PE ones, especially Netsle and Page. But then again past five years have been fantastic, question is will these turn out to be like Infy of 2000. I am watching all Value stocks for past 3 years in PPFAS portfolio and not sure how will ILFS and Noida perform. I guess they are historically at lower end and once interest cycle softens these will run up but my question is it because all market have gone up and hence these two will go up? I like Piramal though. Any crack would be provide better opportunity. Your views please sir. Also If you can share your email address please that would be great
    Thanks
    Salil

    ReplyDelete
    Replies
    1. Fundoo_Pupil3 January 2014 at 09:02

      All people who hate to pay too much just have 1 example- Infy of 2000. But look at HDFC Bank, Page, Nestle, Just Dial of 2-3 yrs back. Read this-
      http://business.outlookindia.com/article_v3.aspx?artid=285698
      This also explains why Nestle can be considered as a good investment.

      For Noida, fall of debt & increase of dividend can become the catalyst. Though its revenues growth is slow, & that's not great for investors. ILFS needs better environment to perform. Till then only dividends.
      Though as of now I am neither invested in Nestle, Page (don't wanna pay 40PEs for quality) nor Noida, ILFS(want better growth), but these are in watchlist.
      I am reachable at jkalra1 (at) gmail.

      Delete
  4. Gyan25 January 2014 at 23:53

    Hi JK,

    Have you ever tried contacting someone from RS Software on mail? Do they respond? I tried to get some clarification and sent a mail to their CFO/CS Vijendra Surana. But, I did not receive even an acknowledgement of the mail. Any tricks in your books to solicit an answer from them?

    ReplyDelete
    Replies
    1. Fundoo_Pupil26 January 2014 at 00:00

      A friend of mine has done 2-3 mail conversations with them.
      They are not that great in replying.. Max 1-2 lines per question.

      Delete

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