Financial Daily from THE HINDU group of publications
Sunday, Dec 28, 2003
Financial Daily from THE HINDU group of publications Sunday, Dec 28, 2003 |
|
|
|
|
|
Investment World
-
Insight Markets - Insight How we handled the bull market Nath Balakrishnan
As it turns out, we have had a fairly good year. The Table lists a set of thirty stocks recommended by us that have significantly outperformed broad indices such as the Sensex and the Nifty. Best picks: Some of the calls have also turned out to be significant multi-baggers. Our top three picks: Philips Carbon Black, recommended when the stock traded at Rs 15, which now quotes at Rs 120 Asahi India Glass, on which we had our first buy at Rs 38, which trades at about Rs 150 LG Balakrishnan Brothers, recommended at Rs 8.4 (adjusted for the bonus issue and the stock-split), which now quotes at Rs 27. Wobbly sells: Some of our sell calls were way off the mark, though. Take the case of the call on Divi's Laboratories and Hexaware Technologies, on which we had sell recommendations when the stocks traded at Rs 392 and Rs 100 respectively.
Earnings visibility for IT companies has improved over the past three months and the billing pressure has also started to ease. Hexaware has since then pulled away and now quotes at Rs 410.
Most of these sell calls were during the first quarter of the calendar year; FII inflows during this period stood at just $0.35 billion. Little did one have an inkling that the inflows for the whole year would be in excess of $7 billion. The surge of liquidity did have the effect of throwing some of our recommendations out of kilter. Changing tack: In quite a few stocks, we did reverse the nature of call as and when we perceived a change in the business environment. For instance, GE Shipping, on which we had a sell when the stock traded at Rs 38. As freight rates started to inch up on the back of robust commodity demand from China, we realised that GE Shipping would be a beneficiary. We reversed our sell call when the stock traded at Rs 48. Since then, the stock has returned about 220 per cent. Another instance was MICO, on which we had a sell at the Rs 4,150 level. When automobile demand started picking up in April, we realised it would put a spark into MICO's performance. We reversed our all at the Rs 4,900 mark. The stock trades at about Rs 15,000. Other prominent stocks on which we have reversed preceding sell calls include Larsen and Toubro, Sundram Fasteners, Bharat Forge and Madras Cements. Persistent buys: On a few stocks, we have consistently maintained buys (even as they scale higher levels), to capture the growing momentum in their earnings streams. Stocks in this category include Tata Motors, UTI Bank, Wheels India, GlaxoSmithKline Pharma, Indian Hotels, ABB, Grasim, Blue Dart, Thermax and Goodlass Nerolac. Most of our hold recommendations, too, have come off well. Navjot Singh Sidhu once remarked during a match that, "Wickets are like wives; we never know which way they'll turn." More often that not, the market, too, behaves in a similar manner. And if our track record over the year is an indication, we appear to have handled the turns fairly adeptly.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|