FII favorites were our favorites too

FIIsFavourite.11.05.16Shareholding data the companies have provided to the exchanges reveal that foreign institutional investors were selective on their stock picks and from the data, there were about 44 companies in which the FII’s had considerable stakes.

Money control has published this data and out of the 44 stocks, only 12 had negative price moves, while the other 32 were largely positive and 7 out of them had given more than 100% profits in the last 1 year. Following is the list of those companies.

 

Our portfolio in the last year consisted of 14 stocks from this list and 4 of the top 7 that made more than 100% profits. Hence we were able to beat the SENSEX in returns consistently.

Having a strategy to invest only in those companies that are showing growth on their sales and profits quarter on quarter, helps the investment to have phenomenal growth over a longer period.

When the broad markets turn weak, even this portfolio will turn down, while the advantage is that the weakest among the stocks that have formed the portfolio move out and the rest of them stay put and continue their stronger run.

Some of the stocks that consisted our portfolio among the top 7 stocks were TATA ELXSI, Indo Count, Jubilant Like, Take Solutions.

Rising Dollar & its implications on our economy.

Strong dollarA rise in the value of the dollar has always been painful and has impacted the economy negatively & it will not be anything new this time. The dollar is likely to touch 70 to the INR soon. When the impact on the overall economy is negative, there are some good news too when the dollar appreciates in value. The businesses that are deriving their income from exports become beneficiaries of additional profits with zero effort; all of a sudden the Net profit margins of these companies will have a rise along with their EPS, thus bringing in additional value to their stocks.

The sectors that have a positive bias when the dollar appreciates are Software, Pharma, Textiles etc., among these sectors, the companies that have good management and high growth in their performance attract high valuations in the market. Some stocks that we have picked up just before the negativity set into the rupee depreciation were Tata Elxsi, Aurobindo Pharma etc., these stocks have begun to gain strength and are contributing to the overall performance of the portfolio.

News2As of December 18th, the broad markets are down more than a percent for the month while our portfolio has managed to have 0.25% profits, thus having an advantage of 1.25% over the benchmark from 1st December 2015.

In the last 6 months our portfolio went into a churn more post China crisis and it has got automatically aligned to the software, pharma & textile stocks, holding investments in the top performing stocks in each sector. In the Mid Cap Software sector, we have exposure in Tata Elxsi, KPIT, NIIT Tech, Tale Solutions, Zensar Tech and Ramco Systems, 6 out of the top 10 list. Pharma and Textiles too have similar exposure thus giving us the best of advantage to capitalize on the dollar rout.