Sunday, May 06, 2018

Value Investing


Amongst the various thesis and styles in investing, value investing is very relevant at the moment where the markets have hit a high and there seems to be minimal upside and more downside.

It merits to look at this style where we pick stocks that are trading at a discount to their intrinsic value, offers reasonable margin of safety. Other metrics to look for, is if company is operating in a space that has room for exponential growth, and the overall quality of its business. Generally in markets like today, we will be able to identify such companies which are no so popular and are mid-caps in category.

Better still if such companies are going through temporary disruption or through a difficult period. You get to buy a bargain when the seller is selling in distress. The famous example is of investing in Rain industries which was available at P/E of 1 when the profits were Rs 90 crores and the company was going through disruption. The company then multiplied its profits over the next few years by 10X to Rs 800 crores profits. An investor would have multiplied his wealth 10 times in this period.
The most important criteria in value investment is that the down side should be minimal which makes the investment 'low risk'. As they say, Minimize the downside and upside will be taken care of by the business.

Currently a company in the mid cap space that adds value in commodity space is available for a mcap of Rs 390 crores with headroom for growth. Aluminum is consumed by almost every industry one can think of and offers exponential growth prospects. The business is cyclical as it is closely connected to commodity cycle but available at reasonable valuation. Because these companies are small in size, they have a lot of room for growth and could even become potential multi-baggers. An ideal time frame for which to invest in these companies would be 3-5 years.

As the legendary investor said “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results”. India continues to offer businesses with prospects for long term growth and opportunities for multi fold returns to investors.

7 comments:

Anju Shukla said...
This comment has been removed by a blog administrator.
Riya Tiwari said...


Nice blog and content
Capitalstar

Osman Anisa said...

We provide personal finances for debt consolidation, bad credit finances, unsecured finances, finances for bad credit and instant secured finances with cheap rates. Do you have a firm or company that need finance to start up a business or need,personal finance, Debt consolidation? For more information. We will provide you with finance to meet your needs. For more information contact.

We offer Easy and Fast Credit facility.
Email: royalworldfundings@gmail.com

Note: We offer the following finances to individuals-
Commercial finances
Personal finances
Business finances
Investments finances
Development finances
Acquisition finances
Construction finances
Business finances And many More at 3% interest rate;
Contact Us At : royalworldfundings@gmail.com

Ahmed89 said...

Do you need Personal Loan?
Business Cash Loan?
Unsecured Loan
Fast and Simple Loan?
Quick Application Process?
Approvals within 24-72 Hours?
No Hidden Fees Loan?
Funding in less than 1 Week?
Get unsecured working capital?
Contact Us At : ahmedconsultancycompany@gmail.com
Phone number :+1 516-591-0949 (Whatsapp Only)

LOAN SERVICES AVAILABLE INCLUDE:
================================
*Commercial Loans.
*Personal Loans.
*Business Loans.
*Investments Loans.
*Development Loans.
*Acquisition Loans .
*Construction loans.
*Credit Card Clearance Loan
*Debt Consolidation Loan
*Business Loans And many More:

LOAN APPLICATION FORM:
=================
Full Name:................
Loan Amount Needed:.
Purpose of loan:.......
Loan Duration:..
Gender:.............
Marital status:....
Location:..........
Home Address:..
City:............
Country:......
Phone:..........
Mobile / Cell:....
Occupation:......
Monthly Income:....

Contact Us At : ahmedconsultancycompany@gmail.com
Phone number :+1 516-591-0949 (Whatsapp Only

max william said...

Do you need Finance?
Are you looking for Finance?
Are you looking for a money to enlarge your business?
We help individuals and companies to obtain loan for business
expanding and to setup a new business ranging any amount. Get a loan at affordable interest rate of 3%, Do you need this cash/loan for business and to clear your bills? Then send us an email now for more information contact us now via Email:maxcreditfinance@googlemail.com

max william said...

Do you need Finance?
Are you looking for Finance?
Are you looking for a money to enlarge your business?
We help individuals and companies to obtain loan for business
expanding and to setup a new business ranging any amount. Get a loan at affordable interest rate of 3%, Do you need this cash/loan for business and to clear your bills? Then send us an email now for more information contact us now via Email:maxcreditfinance@googlemail.com

Unknown said...

Dearest Esteems,

We are Offering best Global Financial Service rendered to the general public with maximum satisfaction,maximum risk free. Do not miss this opportunity. Join the most trusted financial institution and secure a legitimate financial empowerment to add meaning to your life/business.

Contact Dr. James Eric Firm via
Email: fastloanoffer34@gmail.com

Best Regards,
Dr. James Eric.
Executive Investment
Consultant./Mediator/Facilitator