Stocks for the long and short term portfolio

[jamit_05]

Banking Stocks

What about the banking sector? YES bank and SBI look attractive now. Also, what about Gitanjali Gems and Wockhardt? I'd like to know your opinion about on these stocks.

It is a question of your objectives. Why do you want to invest (in any sector)?

I invest in stocks with the intention to hold for a long period. I see it as a good place to park my money for twice the return of FDs, saves me taxes, gives me dividend and attracts no maintenance cost (as opposed to MFs).

In that light, I have recently included SBIN @1800 in my portfolio allocating 2%. Will buy a little more at lower levels of 1500 and 900.

Yes Bank, Axis Bank, Allahabad Bank, IDFC, HDFC and Andhra bank are on my pending list of purchase in the mentioned order. I am waiting for a better price.

To answer your question,

I like Yes and Axis bank for their good businesses and reputations.

I will buy,

Yes bank Rs.230
Axis Bank at Rs. 800

and not a rupee higher.

 

[jamit_05]

Banking Sector

I like the Banking Sector. I intend to allocate 20% of my portfolio to this sector. The reason is simple:

The have a constant stream of income. Excellent business model. EMIs keep coming in and loans keep getting paid.
They run on interest difference. RBI lends them at X, and they lend further at X+2%
They don't manufacture hence do not need huge capital expenditure that companies in Steel and Motors need to.

Simple business. Less cyclical. Their incomes turn with the economy. Only issue with them is, Non Performing Assets.

With time, NPAs build up on the balance sheet. SBIN has 2% in NPA and it is on the higher side. But, its all good as long as it is factored into the Share Price.

HDFC has the lowest NPA but the Share price is near all time high.
SBI on the other hand has high NPA but the Share price is 55% below its all time high.
Therefore, I prefer SBI at current price.

 

[jamit_05]

Also, what about Gitanjali Gems and Wockhardt? I'd like to know your opinion about on these stocks.

Wockhardt is a risky bet but since it is in the pharma industry the next 5 years will give it another chance to go up. So, there are two things I intend to watch for.

1. Wait for a rock bottom price.

If the bet is risky, then I want it even cheaper. It is currently trading at 575, way below valuations but US gov has cracked its whip on it. So investors are shaken and filling every buy order.

My price of purchase will be Rs.250; I do not intend to hold this stock forever. So, I will look to exit near Rs.2000, which I believe will come once the wind has blown over.

2. Invest not more than 2% of my portfolio.

It is not a stalwart as SBI and HDFC are. So, I do not want to lose a good night's sleep. Even if the stock gets delisted, I am prepared to lose 2% of my wealth.

I do not know about Gitangali Gems. Small caps are not worth investing precious money into.

 

[jamit_05]

Wockhardt is a risky bet but since it is in the pharma industry the next 5 years will give it another chance to go up. So, there are two things I intend to watch for.

1. Wait for a rock bottom price.

If the bet is risky, then I want it even cheaper. It is currently trading at 575, way below valuations but US gov has cracked its whip on it. So investors are shaken and filling every buy order.

My price of purchase will be Rs.250; I do not intend to hold this stock forever. So, I will look to exit near Rs.2000, which I believe will come once the wind has blown over.

2. Invest not more than 2% of my portfolio.

It is not a stalwart as SBI and HDFC are. So, I do not want to lose a good night's sleep. Even if the stock gets delisted, I am prepared to lose 2% of my wealth.

I do not know about Gitangali Gems. Small caps are not worth investing precious money into.

Wockhardt continues monster momentum... 10% down.

Only a strong support has the potential to absorbs such stiff selling. God Bless the Khokariwalas.

 

[jamit_05]

HuL has corrected from a high of 725 to 630 today. If this correction continues and 560 breaks, then it will present an opportunity to buy. It would be swell to have HuL, will hold it forever, and even buy more till Rs.300.

 

[jamit_05]

I am in no position to take a call on Tata steel's lifeline. I guess, what I meant was Tata Steel will show some drastic levels, in 100's. That would probably be a time to buy. Now, or even next year is too early. It has some really tough times ahead.

Hindalco is a very complex web. It has one major acquisition in EU and that too has several other Cos under it. Plus its capacities are being long delayed and has big interest on Bal Sh. Just like Tata Steel. Profitability is only going to get worse for another two years. This Interest cost will prove heavy on the outcome. Nalco has very small debt, most important in bad times.

The above post was made when Tata Steel was near 300. At that time, in April, I was aiming for Rs. 100. Now it doesn't seem to distant after the EU arm posted record loss in billions.

Still a tough time ahead... It did not take much time to see the blaring gaps in the valuation. Stay miles away from the metal sector. More pain to come.

Today, Hindalco is back below sub 90 levels.

For another year or two, look at IT and FMCG. Forget all else.

 

[Mr.G]

The above post was made when Tata Steel was near 300. At that time, in April, I was aiming for Rs. 100. Now it doesn't seem to distant after the EU arm posted record loss in billions.

Still a tough time ahead... It did not take much time to see the blaring gaps in the valuation. Stay miles away from the metal sector. More pain to come.

Today, Hindalco is back below sub 90 levels.

For another year or two, look at IT and FMCG. Forget all else.

Tata steel is a clear value trap, it's buffing up earnings through heavy amortizing of assets. Trying to fool investors. Look at its cash flow you can spot it, it has been doing it ever since they bought nova steel (don't remember the name)

 

[jamit_05]

Is it justified to be very bearish to putting together a long term portfolio?

To make and hold a portfolio, it is very important for me that the price is good. Even if stock were to sharp fall below my purchase price, I should still be comfortable.

If BNF touches 52 W low, which is well within the bounds of reason, then SBI will trade at 850. This is a respectable price to have 5% of SBI in ones portfolio.

 

[rockstar1982]

Is titan industries a good buy from long term investment point of view.

 

[jamit_05]

Is titan industries a good buy from long term investment point of view.

Not following it. But, it sure is expensive. Lots of big investors have opted to exit.