Royal Equity Trades π°π°
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Channel Posts
| 2 | Those who are uncomfortable with sitting on cash can switch to other stocks where the margin of safety is higher ππ» | 204 |
| 3 | Booked 60% profits in many profitable stocks.
Not a sell call, but many stocks are showing weakness and market seems overheated so waiting for an opportunity ππ» | 207 |
| 4 | Hits a new 52-week high π₯
Hits a double century ππ
504 to 750 ππ
49% Returns so farππ
HOLD βΌοΈ
#DeepakFertilizer | 336 |
| 5 | Hits a new 52-week high π₯
Hits a century ππ
211 to 321 ππ
52% Returns so farππ
MORE TO COME βΌοΈ
#Rallis | 440 |
| 6 | WHEN TO SELL A STOCK βοΈ
In our opinion, the most difficult skill in Investing is NOT the ability to find a great stock.
It is to know WHEN to sell the stock.
We keep reading - if you had invested money in XYZ stock in 2010, you would have made so much wealth. π
But what happens if you remove the benefit of hindsight. π€
Take Bajaj Finance for example. The stock was available at Rs 7 (adjusted for bonuses / splits) in 2009. Yes, you read that right! π€
Now assume someone bought it at 7. Do you think they would have held on till today?
The investor would have seen the price go to 20, then 50, 100, 1000, 3000, 7000.
Also a decline from 4800 to 1800 in 2020. π€―
At what point do you think the investor would have had enough?
Sitting tight on a stock is easier said than done. Behavioral biases would not allow for it.
Add to that survivorship bias. We keep talking about Infosys, HDFC Bank, Asian Paints, Bajaj Finance, Titan. β¨
But for each of these, there is a Unitech, Punj Lloyd, Idea, Suzlon, Yes Bank, which promised gold but went to dust. π€‘
And others which seemingly were great but stopped going up at one point. Bata, HDFC Bank, Nerolac, IndusInd Bank, Biocon, PVR Inox, Ramco Cement are some of the names that have given < 5% CAGR return over the past 5 years
How does one know when the stock has done enough. π€·π»ββοΈ
So to us, the toughest skill in investing is to know when to sell a stock. Something that even we are still trying to understand and learn.
We can learn a lot of concepts to identify great companies. But only those who can master when to sell or hold a stock can really create a process around creating wealth. π°
#LowRiskInvesting
#PersonalFinance | 443 |
| 7 | Two recurring questions that are overpowering investor thoughts :
1. Election impact on markets
2. SIP flows to keep markets afloat
Two things that are blindspots for people :
1. A focus on valuations
2. Appreciation of risk
Pick your pair.
#LowRiskInvesting | 412 |
| 8 | Hits it's 4th century ππ
404 to 893 ππ
DOUBLE DONE π°π°
121% Returns in 14 months ππ
You can book partial / full to enter new stocks and hold free shares π
#Sudarschem | 429 |
| 9 |  Made a low of 21821 and bounced roughly 150+ points since then ππ
Hope our view helped ππ» | 478 |
| 10 | Dividend Yield, Dividend Rate and Dividend Payout π°
What is the difference? π€
Let's Decode ‡οΈ
Taking Canara Bank as an example:
Stock Price - Rs 560
FY24 Dividend Declared - Rs 16.1
Face Value - Rs 10
FY24 Earnings Per Share - Rs 84
Dividend Yield π
This is what you make on your investment. Since you are buying the stock at market price, this is calculated as
Dividend / Market Price
In our example, this will be 16.1/560
= 2.9%
Dividend Payout π
How much of its profit is the company paying out as dividend.
Calculated as :
Dividend / Net Profit
or
Dividend Per Share / Earnings Per Share
Since dividend per share is 16.1 and Earnings Per Share is 84,
Dividend Payout is 16.1 / 84 = 19%
Dividend Rate π
Probably the most meaningless number of the 3 - yet most companies quote it.
Calculated as Dividend / Face Value
In this case, Dividend Rate = 16.1/10 = 161%
But as we said, 161% is a meaningless number for us as investors.
-----
All we care about is ‡οΈ
1) Dividend Yield - to understand what % of the share price is getting returned in the form of dividends. In this case, a shareholder is making about 2.9% of the share price as dividend.
2) Dividend Payout, to understand how much of the profit company is distributing, and how much is it reinvesting in growth. In this case, Canara Bank is distributing nearly 20% of profits, reinvesting the remaining. Companies that do not see growth opportunities, tend to distribute more, while those that are growing, tend to reinvest more.
Hope this helps in understanding Dividend Yield, Payout and Rate.
Do share with your investor friends if you found this helpful π
#PersonalFinance
#LowRiskInvesting | 421 |
| 11 | Made a low of 21932 πΆοΈπΆοΈ
Almost 220 points lower since we cautioned ππ | 309 |
| 12 | NIFTY closing below 22180 would open doors for 21800 βΌοΈ
CMP - 22150 | 316 |
| 13 | NIFTY closing below 22180 would be a bad one βΌοΈ
CMP - 22150 | 1 |
| 14 | Hits a new 52-week high in volatile markets π₯
1034 to 1245 ππ
20% Returns so farππ
MUCH MORE TO COME βΌοΈ
#McDowell
#UnitedSpirits | 335 |
| 15 | Megatrends & Leadership - The largest determinants of value creation and wealth creation in the financial markets.
Grab a cup of coffee and dive into the distillation of the talk. β
What are Megatrends? π€
Some sectors have consistently outperformed broader indices over the long term due to structural changes. These structural changes are classified as megatrends.
These megatrends, unlike other sectors, don't consistently revert to the mean over the long term. In short, these are not cyclical in nature.
Characteristics of Megatrends π
- Irreversible shifts that are long term in nature
- Lasts for decades, having far-reaching impact
- Identifying them requires a broad view of their impact along with a focused approach to understanding their intricate details over time.
- They redefine norms, creating new opportunities and challenges and reshaping the competitive landscape.
- Megatrends are not impacted by borders, generations, and political systems. They are not because of the government but despite the government.
Recognizing megatrends is crucial for strategic investments and resource allocation in businesses.
Ingredients for the long-term success of a Megatrend? π
Scalability - Strong supply side conditions
Durability - Changing demand scenario
Granularity - Innovation based business model
Resilience - Not impacted by boom-bust cycle
Without them, a megatrend is just a potential π
Defining Leadership π
Observation also says that a few dominant companies take away a large part of the market share in the megatrend. Additionally, they also continue to take up substantial incremental market share intensifying their dominance.
Effective leadership transcends strategy to focus on execution, with only a select few able to deliver. These leaders ensure profitability, scalability, and long-term sustainability, indicating a lasting competitive edge and consistent growth.
Also, Key to their success is wise capital allocation. Mistakes in capital allocation and structure not just compromise ROCE and growth but also the durability of the business.
Economic Cycles Amplify Leadership π
With every cycle, leadership is not only reaffirmed but redefined and becomes stronger than before. The leaders get the opportunity to extend and expand their leadership through each cycle.
a) Macro Perspectives regarding Economic Cycles
Each cycle leads to creative destruction and non-linear shifts. These non-linear shifts take place in businesses, business variables, and business models.
The economic cycles are caused by 4D cycles i.e. Debt, Disruption, Displacement, and Dis-intermediation.
b) Micro Perspectives regarding Economic Cycles
In each cycle, the power between incumbents and new challengers shifts. You have to be able to perceive that shift of power.
In each cycle, men are separated from the boys. You have to be clear about whom you are backing.
Each cycle sets higher standards; what sufficed before becomes the baseline for the next. Management must continuously innovate and evolve.
The value paradigm also evolves in each cycle. It is always fine-tuned. Value migration accelerates with each cycle.
Each cycle allows expanding TAM by giving inflection points. But only the adapters can take advantage of that.
Valuing Megatrends & Leadership π
- Imperative to value intangibles
- Classical mean reversion approach will be challenged when applied here.
- Intersection of megatrends and leadership is a multi-sigma event and rare. So, valuation metrics cannot reflect this outlier event appropriately.
- The terminal value impact of megatrends and leadership is disproportionate. Therefore, small changes in them result in outsized changes to terminal value. This cannot be captured in the conventional valuation frameworks.
#PersonalFinance
#LowRiskInvesting | 417 |
| 16 | Hits a triple century ππ
404 to 715 ππ
77% Returns in 13 months ππ
MORE TO COME π
#Sudarschem | 372 |
| 17 | Eicher Motors Limited.
Eicher used to sell 50,000 bikes/year in 2010..ποΈ
By 2018, it was selling 70,000 bikes a MONTH! π
Let me share this "Classic" story..
In 2010, Royal Enfield sales were less than 1% of the overall 2-wheeler market in India. π
But Eicher had near monopoly in the greater than 350 cc segment.π
Just that the segment itself was small.Β But was poised to grow!
Around this time, Eicher launched the Royal Enfield Classic, which took the market by storm! β‘
Added to that,
- Disposable incomes in India went up π²
- Aspirational demand for high end bikes went up π€
As a result, the market size jumped.
But even if industry growth was a strong tailwind, the company needed to have the vision to add capacity.
As market size grew, Eicher continuously expanded capacity. π
By 2014 end, they were selling 3 lakh bikes a year. By 2018, it became 8 lakhs a year!
A rare example of achieving scale with increasing profitability. π
Profits from their bikes segment went up nearly 20 times over this period. π
What was the key to this successful scaling? π€
Market expansion, companyβs vision the be able to grow along with market expansion, solid execution, continuous product innovation with new model launches, and a growing community of dedicated customers.
72% of their customers are below the age of 35. India's demographics have aligned well for them.
This stellar financial performance also saw the valuation jump. Market Cap jumped from Rs 1700 crore in March 2010 to Rs 75000 crore by FY18 β a rise of more than 40x π«
Disclaimer : Not a reco on the stock βΌοΈ | 517 |
| 18 |  +1Nippon Life India Asset Mgt.
It is engaged in managing mutual funds including exchange traded funds (ETFs like GOLDBEES, LIQUIDBEES, etc) , portfolio management services, alternative investment funds and pension funds.
It is the 4th largest AMC based on AUM.
Gave total dividend of 13 Rs last year,
Yielding us a cool 6% dividend from our entry at 210 π°
Sales up 3x in the last 10 years,
Net profit up 4.2x during the same period .
Return on Equity at 21 % over the last 3 / 5 / 10 years.
Shareholding :
Promoter - 73 %
FIIs - 5.5 %
DIIs - 14 %
Public - 7 %
Support levels of 210 - 220 were given to our members on 30-01-2023.
Our clients accumulated the stock in the mentioned range over the next two months. π
The stock finally bottomed out and made a low of 196.90 on 28-03-2023 and never looked back π
Made a high of 561 last week ππ»
6.2% Drawdown π
167 % Return so far ππ
DM to know more about the product
( Strictly for long term investors )
#LowRiskInvesting
#PeacefulInvesting | 355 |
| 19 | The media focuses on all the things that COULD go wrong.
These are possibilities, not probabilities.
And because the possibilities are, quite literally, infinite, you cannot make financial decisions based on possibilities with any level of perpetual success.
You must base your decisions on probabilities.
One enduring probability (with a historical probability of 100%) is that the market will continue to go up over time.
Thus, the best idea is to simply buy a diversified portfolio of equities ( as long as you stick to good quality stocks bought at reasonable valuations ).....then, hold it. It really is as simple as that.
Perspective > Predictions ππ»
#PersonalFinance
#LowRiskInvesting | 362 |
| 20 | +1 Sona Comstar
Sona BLW Precision Forgings is an Indian automotive technology company. In FY19, acquired Comstar entities, a leading designer & manufacturer of charging systems, which created Sona Comstar.
The company is engaged in designing, manufacturing and supplying engineered automotive systems and components.
Sales and Operating Profit are up 4.6x in last 5 yrs (FY19-23)
Net Profit up 5x during the same period.
Shareholding :
Promoter - 67 % to 29.7 %
FIIs - 9 % to 32.9 %
DIIs - 16 % to 27.9 %
Public - 8 % to 9.5 %
Support levels of 420 - 440 were given to our members on 03-02-2023.
Members accumulated the stock in the mentioned range over the next two months.
The stock finally bottomed out and made a low of 401.10 on 28-03-2023 and never looked back π
Made a high of 719 last month ππ»
4.5% Drawdown π
71 % Returns so far ππ
DM to know more about the product
( Strictly for long term investors )
#LowRiskInvesting
#PeacefulInvesting | 431 |
