These stocks were Multibagger. But, now they are FALLING. Time to buy?
hi everyone welcome to today's video so there are basically two questions that are going on in the market right now first question is that is this a good time to buy and the second question is that if indeed it is a good time to buy then what type of stocks we should be looking at because so many stocks have corrected so on this video I'm going to discuss with you five specific stocks that are traditionally considered to be very good stocks they are available at a good price right now whether you should be buying it whether you should not be buying it that decision is up to you I will simply present my analysis out of this through my tone the way I speak you will get to understand which stocks I am bullish about which stocks I'm bearish about so let us discuss both these points and first and foremost let me present a very quick commentary as to whether I think the markets are overvalued right now and whether it's a good time to enter the market or not so here is a very quick technical commentary and what we are considering here is nifty 50 which represents the overall Market sentiment in the top 50 stocks in India and we are considering one month candle here so every candle that you see for example this this indicates the stock market performance of 50 50 over a period of one month so what you will notice are two three very important points so the first thing that you will notice is that the market is now making higher lows for example you will see that the market fell here it made a low here at point one then it Rose all the way till here it fell right so the second low was here then it rose again it fell it made lower low here then it made higher low here so this one two three point it is getting formed in this ladder manner which is an ascending ladder so to see so very likely that the fourth step on this ladder will get formed somewhere here then here and it will go like this so this is what the technicals tell us this is the first critical point that you must remember second there is a very interesting pattern that you can see and this is called as doji pattern doji pattern so what this indicates is that when the market is actually falling so the market has been falling from here all the way till here and then a doji was formed what does this indicate this indicates indecisiveness in the market so at this point this point I will name as 0.1 here the market was indecisive and next month the market gave an up move so the market has right now decided that it is going to give an upper move which is positive news so in case you are building positions then even from a midterm to short-term perspective also it looks like that the market is in an uptrend now you will say that okay akshat now you are doing postmortem analysis you haven't discussed about this earlier why did you not do this I have discussed every each of these single points on the member Community tab given the exact same commentary that I feel that the market is in an up move and this announcement was made 10 15 days ago so in case you are a serious investor in the stock market you could consider joining my member Community the details are there on the description and comment box so I gave about my calls whatever I'm buying selling why am I doing it I give macroeconomic commentary you guys can interact with each other so all those facilities have been provided so coming back to the topic I hope the technical are clear now very quickly commenting on the macros so very recently you would have heard that the banking crisis was there that to a very large extent has been solved at least it has been absorbed in the market number two inflation had already peaked now inflation is coming back to that somewhat controllable level as per the governments this is second key point it's an entirely different debate we'll have it some other time but this is what the macros are telling us third key point about the interest rate you would have recently read the news that RBI has stopped the hiking of the interest rate they have paused it at six point five percent the expectation was that it would go to 6.75 it did not happen so what does that indicate it indicates that even interest rates have been so these are all telltale signs that going forward in the market the worst case the markets are going to stay sideways and best cased more liquidity will be put in the market Maybe by decreasing the interest rate and if that happens the markets will rally like anything so this is my overall macro commentary so to cut the long story short good time to invest in the stock market definitely yes please do not simply sit on the sidelines watch the show and you know then the stock market will start running and you will not be able to buy it so let me give you an example and please be very very honest with me think about it this way that when Monday Market opens and if it goes up by one and a half two percent in a day which can definitely happen then would you have the courage to invest in the markets then most of us would not we will think yeah I'll probably wait then I will see then I will buy it then the day after it again goes up by like one one and a half percent or whatever right then again you will keep on waiting so this timing the market in the short term it never works and therefore in the short term you should not try to time the market it's a very bad strategy even the best of the investors are not able to do it so my suggestion would be that study the market and if you feel comfortable and if you're confident about your stock picks definitely do consider investing some money we are very close to a bull run or maybe we are already in a bull run so with that out of the way let me quickly discuss five important stocks with you that have fallen quite aggressively and let me share my commentary with you so the first key stock that we are going to speak about is Infosys so the first key point about Infosys is that the results came out very recently and the results were not very encouraging even the management looked a little bit confused I'm not sure where the growth is going to come from so General commentary was given that slow down okay us may therefore our stock price has fallen this that I've been saying for the last eight to ten months please go and watch my videos that I am not bullish about Indian I.T industry I got TCS at very low prices I purchased it and I sold it right and then whatever new positions I am building I am building in Nifty it please watch this section of the video about Infosys stock analysis you will understand why I'll break it down in very simple easy to understand language and also a very very humble request that please like these type of videos please subscribe majority of the people just watch and go away they don't like the video they don't subscribe please do it it will help these type of videos Reach Out more people I know that you haven't liked it so like the video now and if you don't like the Infosys analysis then you can dislike it so the first key point that you need to understand about Infosys is that take a look at the breakup of where Infosys makes money so it makes a lot of money from the US so the dependence on the US and European market for Indian ID companies is fairly high and this includes Infosys as well now what is happening in the global economy is and I do agree with the info sales commentary there us may there are a lot of problems that are going for example slowdown of the U.S economy sudden spike in inflation now they are trying to bring it back the U.S fed
looks confused U.S banking crisis happened so many problems have been there and it directly or indirectly impacts the Indian I.T industry so no doubt about that that from a macro perspective this is not a healthy sign for Indian I.T industry this is 0.1 Point number two you need to study the deeper reason for the fall of Infosys stock so let me first show you the chart very quickly so what you will see is that from the top infosystem block has corrected by roughly 26 27 percent so this is a substantial dip in a way but the point that you need to remember is that if you study the pre-covered prices you will see that the rise on Infosys stock price is still roughly 75 percent so this is not a very low ISO to say that over the last three years Infosys stock has gone up by 75 percent so just because it has fallen by 26 percent does not mean that Infosys is an undervalued stock as of now so this is the second key point that you should know now the third key point that you should understand is that you should study the U.S tech market and U.S banking Market
because these are the primary clients of Infosys or companies like Infosys they give a lot of back-end work to Indian I.T companies and these Indian ID companies export a lot of services to the US therefore you end up seeing charts like this where Infosys right now makes almost 70 75 percent of its money by exporting services to the US so expanding upon this point three what has happened there basically consolidating their capacity as of now they are not looking to hire people too aggressively they are figuring out what to do next so in simple terms this is a consolidation phase in the U.S tech industry what is going to happen or what is rather happening during this time in the USS the companies are going to decide that where is this next layer of growth that is going to come for us for example if you go back three four years back a lot of companies were focusing on cloud storage so Cloud was probably the biggest area that every big company was looking at now what is the narrative they are looking at Ai and this is the statement from CEO of Infosys this is a very recent statement that even Infosys is going to focus on AI and developing AI capabilities so here is a very quick flowchart and it will help you understand Infosys business model in a slightly more nuanced manner so this is what it would look like so basically when it comes to Big Banks and big tech companies in the US what they do is that they decide on a focus area first for example it could be cloud computing or it could be cloud-based storage or AWS system that Amazon generally uses and now you might have figured out that Amazon is actually making more money from its AWS compared to its retail segment right so all these things are there that one Focus area is decided whichever is a booming area during that time all the U.S tech companies or at
least a large chunk of them jump onto developing their expertise and then final step is that they try to scale this is where these back-end tech companies like PCS Infosys come into the equation that they help these companies scale their areas of expertise very very quickly so this is the simple equation and this leads to a start and stop effect in the technology segment now what is the meaning of that the easiest representation of that would be that you go and study the pricing history or stock price history of Infosys itself so you will get an idea so let me take you through that so let us study the pricing history from 2014 onwards so this is like December of 2014 the stock was at 580 590 and all the way from 2014 to March or April of 20 18 so four years zero percent return on Infosys then it gave a run up all the way till here then it again stagnated for how many years if you compute then it roughly stagnated for two years then what happened in this final leg so this was a rally and this was again a consolidation phase this was a consolidation phase this was a consolidation phase the point I'm trying to drive home is very simple that there is something called as start and stop that happens with the Indian I.T sector why does that happen it's very very simple because when some big tech company in the US it tries to scale the technology on which it is focusing that is when the Indian ID companies make the most money so that is the simple equation and therefore I'd see very limited point in taking or building huge positions in individual I.T stocks in India all that according to me is a very very highly risky strategy and you know people who have been watching me for the last one and a half two years I have Simply Built my position on U.S tech
stocks whatever Tech investing I had to do I had spread it on the U.S tech stocks only I purchased TCS and Zuma matter so zomato is something that I still hold TCS I sold and whatever new positions I have built I have built it on Nifty it now you might have a very natural question that okay that if you're not a believer in Indian I.T companies why are you building positions in Nifty it so okay so let me quickly clarify that so there are two reasons number one is that we don't know to what extent these specific Technologies are on the Innovation curve that is this mature enough or are large scale Solutions will be built around it and companies are going to benefit from it we don't know at what stage of maturity these different things are it might very well happen that cloud still turns out to be the number one money making machine for something like Amazon even in the next five years we cannot say right or it might happen that AI might gain more prominence now we don't know if Infosys TCS emphasis or which company will try to develop their expertise here right so this is the first key reason that I do not know the second key area has to do with regulations now almost all the Indian it firms they export their Services abroad we can't be sure Infosys TCS only will win contract or emphasis will only win contract we cannot say that so therefore according to me diversifying your bed is a much better strategy than picking concentrated bed on the Indian ID sector so that brings us to the final question about Infosys key Indian ID stocks why do you want to even touch the Indian ID stocks can't you just do away with them and invest only in Banks or whatever yes that's a very valid argument but see think about this and and please do not bring the nationalistic sentiment into play think about it rationally that at the back end you need some players to support the front-end technology drivers so here Amazon Google Netflix all these companies which are like leading the pack when it comes to technology and at the back end we need someone to drive that engine so that engine will definitely be I.T companies so therefore it makes sense to buy and build your positions in Indian ID stocks no doubt about that I don't know which individual companies are going to win but Indian I.T industry is definitely going to do well and in fact if you study the fundamentals that fundamentally has something gone wrong with the Indian ID industry so take for example Infosys only so here you will see that it has an roic or return on invested Capital which is close to 30.4 percent and this is the last five year average so the return that they make by investing 100 rupees they are able to make 30 rupees additional return on it which is very good so they are not a capital destruction firm on top of this they sit on massive amount of cash flows this is true for almost every tech company that they are not primarily debt driven they have a lot of asset light infrastructure in place so therefore with this entire cash flow they are able to manage the situation and this allows them to stay light even if they are not making crazy returns for four or five years they are able to survive the situation you as a retail person will make a loss by investing in these companies if you're not patient enough if your Viewpoint is and I should sell it off in another four or five months or one year or two year then you will not make any money and if that is the perspective with which you are operating then please stay away from this now very quickly let us move to stock number two which is called as gland Pharma so let me first and foremost show you the price history of gland Pharma and you will laugh at it by looking at this graph that the stock has corrected by roughly 75 so it has proven to be a wealthy destructive stock you will obviously fundamental problem so let me very quickly take you through the fundamentals so this is a zero debt company what about profit is it making profit increasing its sales yes it has been growing like crazy even profits are coming in no problem there what about like fiidi investing are they selling off their stake in gland Pharma and moving away the answer is no in fact they have increased their holding over the last three years so then comes the natural response say how does the stock price crash by 75 if it is such a good company okay so let me break it down for you and there are four specific reasons why the stock price has corrected so the first key reason is that you need to understand who is the actual promoter of land Pharma or who is a major partner of grand Pharma so it's a company called as Shanghai Frozen farmer and by the name itself you would have understood that this is a Chinese company lot of backlash against Chinese healthcare companies to begin with they invested heavily in gland Pharma around 2016-2017 month now the situation in China was such and situation within this parent group company was such that they were struggling with debt why was that the case so for that I'll have to decode the Chinese economy but very very quick points there that housing crisis were there in China internal health care issues in China China exporting stuff so a bunch of problems are festering so as a result this fossan group had a debt oriented problem and they were in talks to sell gland Pharma and that uncertainty remains reason number two there was General petai of Pharma companies take a look at Dr Lal path lab Devi's lab you name it right all the Pharma companies are Healthcare oriented companies have been corrected quite aggressively multiple reasons for that but definitely gland Pharma also takes a hit because of that wide beating of the Pharma industry the third key issue has to do with the breakup of where gland Pharma supplies its material or exports that material for example here is a breakdown of its entire revenue streams it is exporting 71 of its product to the US or make 71 revenues from the US and Europe it has a very big arm China it depends quite aggressively so all these markets have been subdued and therefore gland Pharma also took a lot of petite because of that fourth and finally is something called as inventory built up problem now this has been common I had already explained it when I did the consumer durables video that companies like Whirlpool companies like Rebels bunch of other different different companies because a real estate market was not picking up therefore these companies had produced a lot of inventory and it was just not getting sold something similar was happening in the Pharma industry the 2020 covet came into equation these companies produced a bunch of stuff right and even now their inventory is sitting so this is a sitting inventory problem that even land Pharma is suffering and here is a very quick snippet that comes from their management and this is a problem that even they are acknowledging now comes the is it a good time to buy this stock now I cannot tell you whether you should be buying whether you should not be buying it depends on individual circumstances whether you want to increase position in Pharma group what your holding period is so there are a lot of nuances that goes into picking a stock so you have to decide for yourself but this is what I'm thinking and I'll just quickly share my perspective with you that number one this company is clearly looking for growth now in Pharma there is something called as under so Anda does not mean egg it simply means new drug application that have been submitted to the FDA approvals so if these new drugs get approved then these will go into production and the company will sell them and make money so this is what Anda means and the number of applications that the company has bought it is high number two they have expanded their capacity already so this capacity actually generates result for the company over the coming years so I feel that the worst for the stock is over I have started to build little bit of position as and when I build more positions I will announce it in the YouTube member Community section so then comes the the third stock which is Page Industries in the interest of full transparency I'd purchased page industry roughly two two and a half years ago then I sold it when it gave a good run up and now I'm looking to rebuild my position so let me explain why so the first key point that you need to understand is regarding its stock price fall so what you will see is that if you consider this right and this is the total stock price fall that has happened so it has corrected by roughly 30 now if you study the current level of price rise from the covered levels you will feel that you know what this stock is probably still overvalued because teen's already has gone like 115 percent run up it has given but consider the pre-covered level prices right so what you will notice is that it has just given roughly 34 over the last three years now does this make the stock overvalued undervalued final point that you need to consider is that consider here right this is 24th or 30th August 2018 so almost five years and it has given zero percent return as of now so if you would have purchased this stock in bulk in August of 2018 and if you were holding it now you would be sitting on a zero percent profit on this stock in a period of five years now this is the problem that happens when you are buying large cap companies and Bloated valuation there will be half of decades or even one one decades where you will make zero percent return so therefore I keep on insisting that please learn how to invest in stocks properly in case you are building direct positions otherwise I simply go and buy index you will make a lot less money but at least you will generate positive returns so anyways coming back to the topic I hope that the first key point is clear that the evaluations at least as per my understanding are not overvalued now let us combine this with fundamentals so let us look at at what rate the company has grown and what type of returns has the company given so take a look at sales from 2018 level right it has almost double let sales over the last five years right so this is one what about profits has it doubled its profit the answer is definitely yes it has doubled its profit so please remember this there is no problem from that perspective what else does it have very high it the answer is no absolutely not this is not very high levels of debt for a manufacturing oriented company then comes the national response stock price okay so same bunch of problems the number one problem that the company has faced it that it has been unable to increase the prices of its product this is the downside of the company that despite having a very strong brand like jockey it has not been able to adjust for inflation and pass on the price increases to the customers now what is the hypothesis behind it yeah see when you are putting makeup people can see you or if you are wearing an Apple Watch or using Apple laptop then people will have a certain impression of you so these are external indicators now unless you are an ad you are not going to show your underwear and all so from that perspective the company struggled to increase its prices that's a simple understanding that I have now you'll make the same argument about hindustanian and liver see in Hindustan unilever's case when you are going and buying a shampoo you are worried about your Ganda shampoo right so therefore you are at least little bit worried now what issue will you have if you are are buying underwear which is of slightly lower quality so this is my understanding of the equation it is very difficult for a company like page Industries to pass on the price increases to its customer so what has simply happened on the stock is that these stock price levels have adjusted it was given a very rich valuation simply valuations are correcting as of now it is not as if that the company has become bad and it will not show any growth this that problem is there yes competition will increase it's increasing in almost every industry but that does not make the company bad now you need to make a call that you know what whether the valuations are fair enough according to me these are okay valuations of course no one can be 100 correct about valuations so according to me if you have just started to build your position and if you leave a little bit of margin for error you will make good money on this stock so this is my viewpoint and again I had made the announcement in the member Community tab that I had purchased page Industries okay so let me talk about one more stock I don't think I'll be able to discuss five because the video will become really big and maybe I will make a separate video for my Hindi Channel where I will discuss the remaining stocks that I wanted to talk about so I'll release that video in another three four days so the next talk that I'm going to speak about is called as astral so how much has the stock corrected by let me show it to you so this was the recent high and it has again corrected by roughly 30 now what you will notice here is and there are two three technical Trends first and foremost let me quickly speak about that and then I will do the fundamental analysis first thing is that this became one of the multi-wagger stocks during the covet crisis and you will see that it gave roughly 304 percent return during the covet crisis so if it has fallen by let's say roughly how much 30 40 so it's not as if that this has become suddenly highly discounted stock so please remember this this is a call that you will have to make also if you compare it to its pre-covered levels then you will see that it has given roughly 110 returns over the last three three and a half years these are very very good returns by no standard this company is highly discounted as of now just by checking the previous levels now aggregate this data by doing some fundamental analysis is so let me take you through some data so the company has almost doubled its sales or even more than that every four or five years it does it for example go to 2013 802. by
2018 it became 2073 next five years it has doubled again what about profits is it translating into profit so 2013 61 2018 almost three times profit so yes one can say that it went to almost three times profit and it has been 3xing its profit every five years and 2xing at sales every five years this shows that this is a massive Growth Company so it growing by 110 percent over a period of three and a half years it does not look off from that angle so from valuations Viewpoint can we say that it is overvalued undervalued we can't be shot no one can be sure about the valuation especially given the markets right now this is the first key point that you must understand the second key point that you need to understand is the market share story so take a look at two Graphics first let me break down the product by segmentation so you will see that the company makes all almost 25 percent money from adise and 75 money from Plastic Products your pie five right and what is the market share of this company has it been growing has it not been growing it is growing its market share front on almost every single category which is absolutely impressive there is no reason for a company that is growing it's market share in a growing Market there is no reason why you should shrink its PE ratio so this can be seen and this is a very important point that I wanted to highlight now the valuation question here is slightly off I will do more exercises on valuation I will try to Value this company by using three four more models I haven't built a lot of position on astral again I will make the announcements in the YouTube member Community whenever I am building more positions on astral or cutting positions on some stock all those details would be available but in case you are looking to build positions on any of these companies please apply the analysis that I have told you you have to make a call as to how long you want to hold these stocks the final stock that I wanted to discuss was SBI life insurance I feel it's a good stop do let me know about your commentary along the same I will release part two of the video on my Hindi channel so please go and subscribe me there I will release the video in another three to four days thank you so much for watching and I will see you soon
2023-04-19 07:34
