Sonia Shenoy of CNBC-TV18 caught with up value investor Porinju Veliyath and they discussed the best multibagger stock picks to buy.
Sonia Shenoy tweeted about it.
— Sonia Shenoy (@_soniashenoy) August 17, 2016
Porinju Veliyath Stock Picks Strategy
Porinju Veliyath is the MD and Portfolio Manager of Equity Intelligence India. He runs a Portfolio Management Service (PMS).
Porinju has discussed his best stock picks. He has also explained the strategy that enabled him to pick multibagger stocks.
Common sense approach
More than number crunching, a common sense approach and the wisdom are the most important ingredients in stock picking.
Investors’ perception changes with the stock price even if there is no change in the fundamentals of the company. Once the stock price goes up, the promoter becomes very high quality. When the stock price is low and is quoted at 3-4 PE, the investors feel the management is of low quality.
Buy stocks at inflexion point
Identify the inflexion point of a company or an industry. Buy when things are not in fancy. Buy stocks comfortably with basic arithmetic and common sense.
Most great picks have been because of inflexion point of the company or industry in particular.
Force Motors was quoting at Rs 425. It is promoted by Firodia and Bajaj. Bajaj had a holding of around 23 percent. Investors doubted the integrity of the promoters because they bought an aircraft for Rs 160-170 crore.
This was the inflexion point for Force Motors.
Biocon is promoted by Kiran Majumdar. It has not performed as well as other pharmaceutical companies like Sun Pharma, Jubilant Life Sciences etc. Kiran Mazumdar has done well in business even though stock price has not moved up. Sun Pharma has gone 10 times. Biocon has just doubled.
Biocon is doing well. There are many things in the pipeline. It is setting up a new plant. The numbers are not bad. Many large brokerages and analysts are bearish about Biocon. There is common sense, wisdom in CLSA’s report.
Jubilant Life Sciences
Jubilant Life Sciences is not in fancy today. It has a USD 1 Billion market cap. It is a very high quality pharmaceutical business. Jubilant Life Sciences is very strong in the nuclear medicines. It is a very niche business. It is becoming a global leader.
Jubilant Life Sciences has many things in the pipeline. There is growth ahead. Once it brings down the debt, the stock will gain. The management is dynamic and doing a good job.