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Topic: Smartcat - Portfolio Checkup

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smartcat
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Joined: 29/Mar/2007
Location: India
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Posts: 4243

Topic: Smartcat - Portfolio Checkup
Posted: 25/Apr/2007 at 12:54pm

Hello Everybody,

I found this forum via Google when I was searching for RJ's portfolio. Can you take a look at my portfolio and make suggestions?

Bharti Airtel                    14.77
Reliance Industries        11.08
Infosys                            9.98
TCS                                  9.48
Reliance Comm                7.98
ICICI Bank                       5.70
Aban Offshore                  5.40
Larsen & Toubro             4.17
BHEL                               4.01
UTI Bank                          3.73
Thermax                          3.59
Bharati Shipyard              2.62
Lakshmi Machine Works 2.52
Suzlon Energy                 2.19
Pantaloon Retail              2.18
Tanla Solutions Ltd.        2.00
Marico                             1.83
Maruti Udyog Ltd            1.64
Mahindra & Mahindra      1.36
Madhucon Projects         1.30
Praj Industries                1.24
JP Associates                  1.23

A little bit of background info -

- My goal is to get a CAGR returns of 25 - 30%.

- I would like to increase my holdings in Praj and Pantaloon. But I'm not sure if this is the right time to do it. Comments?

- I was once bullish on Suzlon with 6% portfolio weightage but later sold a few shares after 2 consecutive poor quarters.

- Is somebody playing with Tanla solutions scrip? Why does it keep going up by 2% (or going down by 2%) everyday?

Thanks -

Ashwin

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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403

Posted: 25/Apr/2007 at 1:17pm

Hello, Great to hear the way you found this site! If we do a sectoral weightage of your portfolio this is how it works out to:

Telecom: 7.98 + 14.77 = 22.75%

Chemicals + Oil = 11.08 + 5.40 = 15.48%

Technology= 9.98 + 9.48 = 19.46%

Retail Banking = 5.70 + 3.73 = 9.43%
Construction = 4.17 + 1.3 + 1.23 = 6.7%
Capital goods and energy = 4.01 +3.59 +2.19 + 1.24 = 11.03%
Ship Building = 2.62
Textile manufacturing = 2.52
Retail = 2.18
Mobile aggregators =2.00
FMCG = 1.83
Auto = 1.64 +1.36 = 3%

You should be congratulated on having managed to create such an extraordinary portfolio. The salient features of which are:

1) Well balanced

2) Mostly has sector leaders

3) Less dependent upon commodity and cyclicals

But some positions need to be ramped up for instance as you said the retail exposure is meaningless if you want to be exposed to Pantaloon then it shoukd take up at least 5% of the portfolio otherwise it would not matter.

Similar with Praj and Marico.I think Tv broadcasting is an area which should grow exponentially from because of changing industry dynamics.So an exposure should be considered in this sector.

For the rebalancing some money could be moved out of Technology, Chemicals and Telecom - in that order.

Edited by basant - 25/Apr/2007 at 1:22pm

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

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smartcat
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Location: India
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Posts: 4243

Posted: 25/Apr/2007 at 1:36pm

Basant,

Where did you place Aban Loyd? I thought they were into ship building too (rigs, drilling ships etc). Or do they buy the rigs/ships elsewhere and just give it out on rent/lease?

I originally didn't have such a high telecom weightage. But Bharti and Rel Com pushed it up thanks to the recent rise in share prices. Now whenever Bharti sneezes, my entire portfolio catches a cold. But thankfully, Bharti doesn't sneeze so much

If a stock you like powers up quickly and messes up your sector/stock weightage, would you sell it or hold it?

I am not that bullish on Reliance Industries actually (in the short term). The only reason I have it in the portfolio is because of sensex weightage of Reliance. I hate it when Sensex beats my portfolio and I hope to avoid that by keeping Reliance at 10%.

I have extra cash to deploy. I will put that in Pantaloon. What is the FY07E PE of Pantaloon? Can I expect 30 - 40% growth in EPS over the next 2 years?

I am scared to invest in TV stocks because of eye-popping PE ratios. So I have invested in Rs. 40,000 in Reliance Entertainment and Media Fund.

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basant
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Posted: 25/Apr/2007 at 1:50pm

Can I expect 30 - 40% growth in EPS over the next 2 years?

_________________________________________________

That seems achievable.

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

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deveshkayal
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Joined: 04/Sep/2006
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Posts: 3903

Posted: 25/Apr/2007 at 2:22pm

Hi Ashwin, Welcome to TED!

Your portfolio looks extremely good except some:

I would prefer HDFC Bank over UTI and sell Maruti, M&M,Madhucon and JP Associates (1.64+1.36+1.30+1.23=5.53) and deploy all the maoney in Pantaloon.After which Pantaloon will constitute 7.71% of your portfolio. Try and bring the number of stocks to 10 so that you can follow and manage it.

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

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smartcat
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Joined: 29/Mar/2007
Location: India
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Posts: 4243

Posted: 25/Apr/2007 at 3:20pm

Madhucon is a real dog. It is down 30%. I have no qualms selling it. I bought JP Associates during the cement stock run up. I own M&M because I heard they own 40% of Tech Mahindra. So if Tech Mahindra performs well, will it rub off to M&M too?

Warren Ji, I have lots of time on my hands to track so many stocks.

You might find me hovering on this forum now - there is so much to read.

Can somebody point me to rules of TED forum? Can I post links? I've noticed that forum newbies are not allowed to post in certain forums. When will that change?

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BubbleVision
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Joined: 05/Aug/2006
Location: India
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Posted: 25/Apr/2007 at 3:46pm

Smartcat...You should first of all introduce yourself here, and then proceed to read the fourm rules here.

You can also post external articles on the forum, but make sure that you give the source for the article at the bottom. Everyone is allowed to post on everythread, however only the administration can start threads in certain Sub-Forums.

Elsewhere you can start threads also. Last but not the least...You are Welcome!!!

You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

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kanagala
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Joined: 31/Mar/2007
Location: India
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Posts: 1229

Posted: 25/Apr/2007 at 9:26pm

Originally posted by smartcat

Madhucon is a real dog. It is down 30%. I have no qualms selling it. I bought JP Associates during the cement stock run up. I own M&M because I heard they own 40% of Tech Mahindra. So if Tech Mahindra performs well, will it rub off to M&M too?

Warren Ji, I have lots of time on my hands to track so many stocks.

You might find me hovering on this forum now - there is so much to read.

Can somebody point me to rules of TED forum? Can I post links? I've noticed that forum newbies are not allowed to post in certain forums. When will that change?

Each M&M share owns 1/4.2 share of Tech Mahindra. But, M&M share holders are never going to get shares in Tech Mahidra. This is like a strategic investment for M&M. Tech Mahindra should help M&M by contributing to consolidated EPS. It helps quite a lot if all of us get our share of Tech Mahindra being M&M share holders.

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