I subscribed to HDFC AMC IPO

Below are the key reasons why I subscribed to HDFC AMC IPO :

  • HDFC MF is the most trusted AMC in India
  • It is one of the largest AMCs in terms of AUM
  • HDFC AMC has well-known Fund Managers
  • HDFC AMC portfolio is well balanced across industries

More details can be found here .

When I started investigating in equity markets, I always wondered how to invest in IPOs, and it took me almost an year to figure out and successfully subscribe to an IPO. I have shared one of the ways to subscribe to IPOs without a broker in my next post .

To view a model portfolio of stocks, which has give 66.5% returns till date and 270% returns, excluding current year investments, click here

 

Turning bad news or a crisis into profit

Turning bad news or a crisis into profit is one of the key traits of a long term equity investor.

What does bad news mean ?

Bad news or a crisis is something which creates panic in the market, especially by novice or amateur investors. Some of the examples of bad news could be:

  • Exit of a CXO / President / Founding member of a company
  • Failing to adherence to quality norms, in F&B, Pharmaceutical sectors etc
  • Some violence or Strike in the company
  • Etc.,

How can an Investor benefit from it ?

If we take the current situation of the Inter Globe Aviation (Indigo), where the company announced the  departure of  its President & Whole time director Aditya Ghosh. Adding to this, the company has performed poorly during the Quarter ending March’18. This has led to a steep fall in its share price in last four trading days:

Which shows ~20% drop during this period. This definitely looks like a good buying opportunity.

But, Is this single factor enough to make a buying decision ?

Yes and No.

Yes, if the Company:

  • Is well know in its sector.
  • Has good track record of earnings and profits
  • Is one among the top two companies in that industry

No, if the above mentioned points aren’t true for the company. In that case it may just be another company going towards bankruptcy. It would be better to avoid buying the stock.

Will I buy Inter Globe Aviation (Indigo)?

Of course, I’m buying Inter Globe Aviation (Indigo). Not just because of the steep price drop. But also due to other positive factors about the company:

  • Largest fleet operator in India, with over 1000 flights per day
  • Has performed better than peers on flight schedules
  • In Flight crew is well behaved when compared to SpiceJet or Jet Airways
  • Handles crisis well, for instance: smoothly handled situation when recently Aviation Regulator Directorate General of Civil Aviation  grounding of A320 Neo flights.
  • Future cash flow value per share is Rs: 1884, so current share price is at least at 25% discount.
  • P/E and PB are on a higher side, but this is the risk that an invertor should be ready to take.
  • Expected annual growth rate is ~19.8%
  • Revenue growth is expected to be better than its peers and to that of the Market

In my next Post, I’ll be talking about how to buy a falling stock

Which stocks to buy during Feb 2018 Crash / Correction

I had published an article on 1st Jan 2018: “Time to exit equity market and book profits” the markets have started correcting and this might be the  Crash that has just started. Only time will tell. Now is the time to identify which stocks to buy during Feb 2018 Crash / Correction.

I have sold most of my holdings which are high gain stocks and high gain mutual funds by end of Jan-2018.

I am still holding few stocks that have not appreciated much. So selling them was not a good idea, as the returns would be minimum. Moreover these were potentially good companies, such as Apollo Tyres, M & M etc. I held them as I wouldn’t gain much if I sold them, and moreover It would be good idea to buy more of same stock when the price dropped for a better overall gain, over long term.

Coming to Which stocks to buy during Feb 2018 Crash / Correction: I’ve bought shares of some of my shortlisted companies such as, Kitex(@225.4)[I’ve exited this stock at 114.7 after reading this post , though there are comments countering the views, there is high possibility that one may loose all the investment], Avanti Feeds(@2287.7)[The share price has been falling since and I’m buying at dips], Motherson Sumi(@325.4)[The share price has been falling since and I’m buying at dips], as they are available at discounted price at present. With a conservative target growth of 15% to 20% CAGR. I’ll continue to accumulate them  when the prices fall further, .

I have few more companies in my wishlist, which have not yet reached our purchase price. I’ll mention them in another post when the prices drop further and I buy them for my portfolio.

If you couldn’t book your profits during peak price, don’t worry, just hold the stock for longer.

I still feel there is still downside to Market at current levels, and use every dip as buying opportunity.

Don’t sell in panic. Instead, keep an eye on your watch-list, and buy them when the price is right.

updated this post on : 7th July 2018