Being invested in the leaders


At Bravisa Temple Tree, we emphasis more on being invested in the leaders of the sectors and industry groups. The reason behind it is that, stock prices of top performers have the potential to gain much faster and at a higher rate, they also have a lesser chance of falter overnight. Like a motor vehicle travelling at above 60 km speed cannot come to halt all of a sudden.

In many situations the leaders have a better gain on their prices than the whole Industry group. This strategy also helps us to be invested in the top performing industries of the economy at any given period. After the China crisis and the correction in the markets, Sugar, Pharma, NBFC and Infrastructure along with Cements turned out to be leading Industries.

Some of our investments in the leaders and their profits are:

BrokerageStockPref.July16top-gainer

 

EDELWEISS gains 49%, top performance among brokerage and financial services business sector among its peers.

TAJ GVK Resorts gains 63%. Top performance among the hotels sector peer group.

Both these Businesses when compared against their Industry groups have given the highest price growth on their stocks.

Such regular investments are helping us achieve outstanding performance against the benchmarks like SENSEX.

 

 

 

 

 

 

 

 

 

 

 

 

 

Above 3% gain in June 2016.

stock-june-2016

For the month of June 2016, our markets took a breather from its rally. We had pressures from 2 events which were surprising, Raghuram Rajan exit and BREXIT. While both were shocking, none had any broad based impact on the markets. In BREXIT became an advantage to our markets. Post BREXIT, emerging markets became favorite’s among fund managers & India had an advantage.

In this period of uncertainty our portfolio had an edge. We had a gain of above 3% on our portfolio against the 2.40% gain achieved by the broad based indices.

Good news is that we have achieved this out performance against the benchmarks with only 60% exposure to Equity. Not fully exposed to the market is also an indicator that the markets are in the wait and watch mode yet. Following June and September results, we should see full loading to happen.

SENSEX could manage to be flat for the month, giving a clear indication that front line stocks are yet to show reasonable growth. It is the Midcaps and a selected few among them that are in good strength. Infrastructure sector had begun to show strength; we have about 5% exposure to the Infrastructure, Cement, Construction and Reality sectors. Most of the stocks in this sector have registered good gains.

ARSS Infrastructure has reached 100% gain within 30 days of our investment giving strength to the exposure we have in this sector.

Sugar & Paper along with NBFC’s are the leaders in the current market. Media stocks have shown growth, with the big releases like SULTAN, KABALI etc., to hit the screens this year, the rally here is likely to continue. We have PVR in our portfolio.

Automobile and Pharma exposure in our portfolio is getting considerably reduced. We have used the system rules to move of stocks and the action also eventually coincided with the future developments. There are news that Auto sector is likely to under perform and stocks are getting downgraded. Following the system diligently helps us be in the right sector at the right period and this has largely helped us outperform all the benchmarks.

Look forward to more fireworks in price moves in the coming months.

May 2016 performance

Screen Shot 2016-06-03 at 3.55.03 PM

Performance of our portfolio is trailing the benchmarks in the 1 month to 6 month period. The broader benchmarks like the SENSEX have done better because of the Large Cap stocks that have had good increase in price, following their results announcement. Most of them have shown increase in profits, while sales numbers are yet to catch up.

Public Sector Banks (PSB’s), that have become untouchables in the last one year, have after the sharp clean up done on their balance sheets, getting rid of NPA’s, now showing good upward price moves. This turnaround in the PSB’s is not because of positive growth in them, it is just that, they have cleaned themselves and going forward, the expectation is that the performance will be good. Bank stocks have moved up on anticipation of better results in the coming quarters.

Turnaround is just happening and it should take another quarter or two to show up on the top line of companies’ performance. We have been adding stocks to our portfolio, following the March 2016 results. Our portfolio was moved out of stock exposure when the markets turned weak, and presently with new additions in the Paper, Sugar and NBFC sectors, our exposure have moved up to just above 50% and soon it should be reaching full loading.

Stocks like Balrampur Chini, Bajaj Holdings, Chola Finance, Bajaj Finance, DCM Shriram that were added in the last fortnight have been doing very good and going forward, these businesses are expected to give stronger growth to our portfolio.

We invest only in those business that show both Sales and Profit growth, hence, our portfolio does not carry Large Cap stocks in the current market, while we will be adding stocks that show strength, unbiased on the category or sectors.

Gaining leadership again…

Perf.13.05.16

In the last 30 days our portfolio outperformed the Nifty with a positive gain of 3.10% while the index had -0.60% returns. This was possible because of the good performance the fundamentally strong stocks had along with the new companies that came into our portfolio.

We have added companies from the Paper and Sugar sector into our portfolio. The coincidence here is that, Sugar & Paper are complementary products. As the consumption of Sugar is increasing so it paper, is that true? Don’t know if it is true, while the balance sheet numbers are saying that, both the sectors are gaining leadership among other sectors. Presently we have exposure of 3% each into both the sectors.

Along with the above sectors, financial sector, predominantly the NBFC’s have done pretty well and have helped us have out performance. With new stocks getting added to the portfolio, we look forward to have strong performance in the months to come.