If you follow any small or medium business, you will realize that most of them
Selecting fundamentally strong stocks is the first but NOT THE ONLY principle for successful investing. Everyday many experts are recommending several stocks across TVs and internet. What you need to do to stay away from the crowd? What should affect your investment decision and what should not? Written in easy-to-understand and simple language the following article is based on our real life experience and an attempt to guide retail investors for long term wealth creation. A must-read for you.
A high growth company can’t trade at a cheap valuation unless there are some operational concerns. However, if those operational concerns are not significant enough then the same stock can generate the multibagger return. Similar was the case with Vikas Ecotech. The company had a strong business model offering eco-friendly and technologically superior products to the world with good future prospect due to Govt initiative towards green environment.
While a commodity business transforms into a branded FMCG play, it creates lots of wealth for shareholders. Apart from bottom line growth, margin expansion and improved cash flow result in P.E re-rating that multiplies investor’s return. Sanwaria Consumers (earlier Sanwaria Agro Oils) is the perfect example of it. Let’s have a detailed look at the business and its future prospects.
Few months back, I came across a less known company growing at CAGR of 50%+ over the last 3 years while maintaining 45%+ ROE, debt to equity ratio of below 0.55, paying tax at the rate of 33% while generating huge operating cash flow. The numbers are so interesting that I made up my mind for visiting the company in their head office in Surat (Gujarat). The management didn’t disappoint me. We had a long 2 hours discussion on various business aspects. Check out the full article for the detailed management visit note.
In spite of 100% return over the last one year from our stock recommendation Bodal Chemicals, the stock has still more stem left. Capacity expansion, softening crude oil price, leadership shift from China to India supports well for the company. Let’s have a look at the investment rationale presented during the time of recommendations and what lies ahead in the future.
Century Ply generated 63% return within 3 months in the portfolio of our paid members. Recommended on 22nd December 2016 at Rs.160 amid the fear during Demonetization, the stock price experienced quick jump due to the GST factor. GST rollout is almost certain from 1st July 2016 which will help players like Century Ply as there are many unorganized players in the Plywood market. Post-GST the topline of CenturyPly will get a major boost as business will shift from unorganized to organized players. Check out the full article for the rationale of our recommendation and the future potential of the stock.