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Analysis & Logic
Wealth is built by investing in opportunities and wait till they become realities. We believe opportunities are many but the ones that can truly translate an opportunity to a reality is what defines a good business. A good business is one which is low capital intensive and able to maintain sustainable growth, create high returns on capital, have high cash flow conversions and can give good visibility of rising free cash flow combined with good management and commands a deep moat, available at reasonable valuations will build immense wealth for its shareholders. Our job is to continuously find and track such companies for you. Below we have listed out some important factors we look at while analyzing a company. A combination of these factors and our experience creates a good combination to pick great companies at all times.
- Intrinsic Value(IV) – The true value of a company based on its cash flow movement.
- Earnings Power Value(EPV) – Based on normalized EPS, we calculate value.
- Expected Returns Methods(ERM)– If growth is maintained, what should the value be.
- Performance– Sales Growth, OP Growth, Margin expansion etc.
- Relative Valuation(RV) – We compare historic ratios, PEER set ratio’s and Industry Ratios.
- Ratios – How is company performing such as ROCE, ROE, EBIT Yield, FCF ratio’s etc.
- Health– What is the DEBT component and leverage status.
- Cash conversion cycles(CCC) – This accounts of for efficiency, credit periods, receivables, payable etc.
- PeerSet(PEER) – Peer competitors, Industry.
- Management(MGMT)– Promoter holding, Audit reports, Efficiency ratios are used to interpret management quality.
- Scuttlebutt(SB)– Customer and Vendor interactions to understand ground reality.
- Returns– CAGR returns over multiple time frames.
reliable & safe
Financial Regulation
Licensed Research Entity by the Securities Exchange Board of India under SEBI Regulations Act 2014(Research Analyst).
Risk Management
Strictly maintain the Portfolio Capital Allocation Policy, to manage risk under all market conditions, and deploy funds during opportune moments.
Multi Tier Analysis
We believe that analysis is a wide spectrum, hence we substantiate our analysis through Trend spotting techniques such as Technical Analysis, Bulk & Block deals, Commodity cycles, Seasonal trend, etc.
Maintaining Downside Risk
The market works in cycles. There are up cycles and down cycles, when down cycles occur, the stocks fall by their current BETA value to the Index. At these times maintaining strict Stop loss strategies is what safeguards our capital and gives us an opportunity to buy lower. We have devised our Stop Losses from the concept of “Margin of Safety”- Ben Graham and applied to multiple Market Caps. There are many more factors we have considered based on technical analysis, fundamental trends, institutional holding etc.
Extreme Transparency Policy
As we are an advisory service, under SEBI Regulations Act 2014 (Research Analyst), we are liable to maintain our basis of thesis, such as sources of information, management communications, etc. at all times on a historical basis. We at all times maintain a live view of our model portfolio under the performance page on the website. Our customers will get access to the expanded and entire view of the model portfolio at all times.
Model Portfolio
A Research entity and its associates can not trade in securities covered by the research entity, 30 days prior and 5 days after the coverage or call generated by the SEBI Regulations Act 2014(Research Analyst). Hence maintain a Model Portfolio through which we communicate our current status and our research, so we can bring to you real time research from our desk. Our model portfolio comprises of a total value of INR 20,00,000. Our performance can be tracked on the performance page.
Strategy development
Range of markets
Index
We value the indices on their fundamentals and technical information such as historic PE, Yields, and Moving Averages to determine trend and valuations.
Our Picks
We screen through multiple data points to identify stocks with great opportunities and compare it to the index. The one’s available at high margins of safety and maintaining sustainable growth become our Hero’s.
Macro
At all times we updating our systems with latest Bond prices, policy changes, macro data points such as IIP, CPI, Inflation etc. and integrating them into our assumptions.
Dollar, Oil, and more
With crude being the largest import item in our Current Account Deficit, it is extremely important to track trends in Crude. As well as India is one of the largest technology exporters in the world, hence higher USD/INR brings better revenue, although makes fuel expensive. We look out for any changes in the trend closely and many more such elements such as commodity trends, gold etc.