Posted on

Portfolio Composition, May 2014

As promised, the top stocks in my portfolio, at the beginning of the month. I have already published this for two prior months, and here is the portfolio as on May 02, 2014.

Notable additions during the month have been an increased exposure to IDFC. After a fairly stellar run in the middle of April due to the announcement of the new bank license, IDFC has been weak. I have taken advantage of this weakness to buy more. For me, IDFC represents an investment for 5 years, at least. Hopefully, over that period, it will become a multibagger. Right now, it is weak because a) It lends mostly to Infrastructure, and infrastructure has been a dog. People are afraid of NPA’s and rightfully so. But IDFC seems to have managed its NPA situation really well, even in a difficult environment. b) There is fear that the short term costs of IDFC transiting to a bank (increased SLR, CRR requirements, and increased expenses on opening branches) may put a lid on profitability and c) Uncertainty over the path to convert to a bank, and the likely FII dilution as a result.

For me, all of these are short term things, and ignores a) the phenomenal performance of IDFC NBFC relative to PSU banks in terms of NPA’s  b) the excellent performance of IDFC PE Fund, IDFC AMC and other subsidiaries. and c) the increased long term profitability resulting from an ability to get CASA deposits.

My largest purchase is the month has been another AMC, IL & FS Investment Managers. I really like the Fund Management business. Once you get a fund going, you have a fixed income for several years, and in addition, you might just get additional income from Carry. IL & FS has a great track record, gives excellent dividends, and I think this will continue, especially if the Indian Investment Climate improves.

Another stock which has underperformed in the last month in Oberoi Realty. While all realty stocks have done poorly, Oberoi has done badly too. I expect the May 10 results to be poor (probably the last set of poor results), and if so, I will buy into the price dip.

This month, I also bought Clariant Chemicals, adding to my earlier position. I think that my initial purchase of Clariant was sound (around 580 levels). I am not sure my current purchases are sound. I will put up a detailed note on Clariant once the March results are out. However, I am holding on, since I expect a dividend of 350 to 400 Rs., and I could use the tax free income, and subsequent stripping loss.

This month, I added to RS Software and Munjal Showa, though the positions are still too modest to show up here. I will keep adding to these positions.

Stock Latest Price Inv. Price Overall Gain % % of Portfolio
Selan Explore 497.6 315.5 57.71 3.9
Cummins 524.45 404.1 29.78 3.7
IDFC 110.55 107.3 2.99 3.6
Balkrishna Ind 528.3 231.2 128.48 3.0
Larsen 1,263.55 949.9 33.01 2.5
ILandFS 13.7 13.6 0.64 2.5
Kaveri Seed 656.35 296.6 121.26 2.4
Oberoi Realty 208.05 177.6 17.14 2.4
Mayur Uniquoter 288.6 111.0 159.92 2.3
Sun Pharma Adv 170.45 121.9 39.8 2.3
Clariant 705 615.9 14.47 2.3
NMDC 152.2 121.7 25.11 2.3
MPS 363.75 123.4 194.85 2.2
NTPC 114.45 131.6 -13.02 2.1
Sesa Sterlite 180.55 151.0 19.57 2.0
Hind Zinc 126.1 121.0 4.21 1.8
Tata Inv Corp 477.1 405.0 17.81 1.8
Jaypee Infra 24.85 18.6 33.48 1.7
EID Parry 152.35 139.7 9.09 1.7
ITC 340.25 301.0 13.05 1.7
IRB Infra 115.8 81.3 42.35 1.7
Bharat Forge 406 272.3 49.13 1.7
eClerx Services 1,239.80 757.3 63.71 1.6
Reliance 928.1 756.1 22.74 1.6
ICICI Bank 1,252.40 933.8 34.12 1.5
Sobha Developer 377.3 288.6 30.72 1.5
TCS 2,208.45 1771.2 24.69 1.5
Indian Hotels 70.95 53.3 33.2 1.4
Poly Medicure 481.25 278.4 72.89 1.4
Bajaj Electric 287.75 209.8 37.13 1.4
Munjal Auto Ind 52.95 34.0 55.77 1.4
PI Industries 249.65 144.6 72.61 1.3
Posted on

Portfolio Composition, April 2014

As is usual, I intend to post a partial snapshot of my portfolio every month. Below is a list of my top portfolio stocks as on April 9, 2014.

My top holdings continue to be Selan Exploration and Cummins. I added a small quantity of Selan during a market drop in the month. IDFC, which was a loser till last month, has now become positive, and because I bought a small quantity last month, and because of the capital appreciation (finally, it has a bank license), it has jumped up the ranking of overall holdings to third place.

I have shown around 67% of my portfolio this month, as opposed to last month. This is because several of my top holdings have appreciated. New companies which have made it into the list include IRB Infra, Jaypee Infra (where I made fresh purchases), Sobha Developer, Bajaj Electric and Munjal Auto and Tata Steel, all of which have come into the list because of capital appreciation.

I had excellent performance this month in PSU Banks, IDFC, IRB Infra, Mayur Uniquoters, EID Parry, Selan, Cummins, Balkrishna Industries, and lots of other cyclicals. Disappointing was mostly the defensives, IT (MPS, Eclerx, TCS), Pharma (Unichem, Ajanta), NTPC (which I intend to sell of soon), Clariant (which I intend to build on) and FMCG. Luckily my exposure to these sectors is limited.

 

Posted on

Investment Performance for the March 2014 Settlement

This post is a little late. I had promised that I would put up my investment performance on the day after every settlement on the stock exchange. This time, I am posting it a little late. I was abroad, and my computer did not work.

However, late as it might be, I have got reasons to be pleased with my performance in March. In the previous month, my annualized return was nearly 40% in the previous analysis period. On March 27, 2014 my portfolio NAV rose to 1233 (from 1000 on November 8, 2013, and 1114 on 26th February, 2014). Hence the absolute return is 23.3% in a little under 5 months, and the annualized return is 56%, higher than the 40% earlier. And I have achieved this from a 100 stock portfolio, not a highly concentrated one. The last months return was 10.68%, which annualized is nearly 130%.

Of course, the NaMo effect was in full play in March, and most portfolio’s have done well. However, as the chart below indicates, the portfolio handsomely beat the sensex, nifty, midcap and small cap indices.

In the previous month analysis, I had suggested that I was disappointed that my return was behind the return obtained by SBI Magnum Midcap Fund, though I had beaten the Kotak Classic Fund, a diversified large cap fund. I am happy to report that this month, I have finally beaten the SBI Midcap fund too. In March alone, the SBI Midcap Fund returned only 4.6%, much below the 10.68% my portfolio achieved.

Here is a chart showing the comparative performance:

 

 

As you can see, the Assets under Management (AUM) has had the highest growth, since I have been investing fresh money. And my overall performance has now just crossed the overall performance of the SBI Midcap Fund.

All in all, a satisfactory performance.

Posted on

Portfolio Composition: March 2014

Let me share something I am ashamed off. My portfolio has more than 50 stocks. It is such a large group of stocks, more like a mutual fund, that it is likely to give only mutual fund like returns.

On another occasion, I will discuss the theme of Concentration and Diversification. At the moment, let me state that my objective is bring down the number of stocks to less than 20, with the top 10 constituting 60% of the portfolio. However, there are lots of constraints in achieving this-my tolerance for risk, the fact that I may have to pay short term tax if I sell things with less than a year’s holding, and the fact that some of my stock is pledged. Hopefully, after July 2014, I will have less of these constraints. I also have to curb my enthusiasm for various stock stories.

Anyway, this is my current portfolio, along with the purchase prices, and the approximate average holding periods:

As you can see, the average age of the portfolio is only 6 months. And these 25 odd stocks also constitute only 60% of my portfolio, by value!! Tells you that my investing journey is still nascent. And I am in desperate need for trimming a whole bunch of stocks. Also, most of the best performances are from MPS, Kaveri Seed, Mayur Uniquoters, PI Industries. These are all ValuePickr stocks. The biggest loser is NTPC. I kind of got blindsided with the new CERC norms. However, it pays decent dividends, so I have kept it. Perhaps before March end, as part of tax planning, it will go. The other negative figure is in IDFC and in Hindustan Zinc. IDFC is a stock which I am accumulating, to test the theory that you buy stocks of good companies when they are down because of some extraordinary set of events (Infra Slowdown, Gas Shortage, and FII limit revision due to Bank License Application), and I hope it will rebound very well in the future. Hindustan Zinc, in my opinion, is simply undervalued. It gets confused with Vedanta group debt woes, and the constant tussle with the GOI regarding sale of its stake. At some point, in the next year, I think both of these will get resolved. So, I intend to hold on to both IDFC and Hindustan Zinc.

The table below has the average purchase price, the gain/loss in percentage,(as on March 4, 2014) the value of the stock as a percentage of the whole portfolio, and the average holding period. The return for IDFC is wrong-it is not zero, but -5.5%.