Portfolio Review

Is PE & 52 Week L or H is the only measure? Of course not. Few things that I would like to check:

• Nature of business
• Growth in Sales, Profit & EPS in last 5 years
• Level of Long Term Debt
• ROCE
• Visibility in the earnings
• Publicly available Brokerage Reports
• Valuation

I reviewed all 23 Stocks in my portfolio & applied the above parameters. While Aditya Chemicals, HEG, Manappuram, Micro Tech & Yes Bank show a strong sign of growth over a period of years, IFCI, MM Forging, MRO Tek, Pudumjee Industries, Shipping Corp. & Manugraph Industries show negative growth. I have considered where 2 of 3 parameters show negative growth so ignored Reliance, Power Grid or Precision Pipes showing negative EPS growth, for example.

Aditya Birla Chemicals, HEG, JBF Industries & Micro Tech have reasonable or low valuations and also have shown strong growth over a period of years, In case of LIC Housing Finance, I suspect that EPS reported is for a face value of 10. Recently, there has been a split to face value 2, reflected in the CMP.

In case of Manappuram, while the historical growth in Earnings has been good, the stock seems at high valuation right now. Seems like recently they have diluted lot of equity base. The business is simple & management looks strong. We would buy more. MM Forging is a clear case of turnaround as we can see from the performance in last few quarters. While it does not match the criteria, I would hold for now. IFCI is just for speculation that they would eventually get a Banking license & someone would take them over. But would it not be wise to switch these funds to some high growth stock? I am wondering.

MRO Tek originally attracted me as they had cash balance of around Rs.40 per share. I need to check the latest status now. Looks like potentially due for sell off from my portfolio. Pudumjee investment was based on Outlook Profit story on concept stocks. Management looks strong and their household products of tissue paper seems will grow strong. I will hold on. But its very expensive. Also, they have increased debt...making me uncomfortable.

Shipping Corp, Punjab & Singh & Power Grid are IPO investments. Have not been able to get out of these.

Here is how our industry profile looks like. Yes, the Banking & Financial Services have of course got a very highly skewed balance. Its Yes Bank, LIC Housing Finance, Manappuram & Shriram Transport though over 37% is due to Yes Bank. At this stage, I am comfortable with this imbalance and have been increasing my non banking sector investments over a period of time, to get this under control.
My sense is that I need to focus more in reading, rather than buying more stocks. I am hoping that this vacation, I will complete Benjamin Graham's Intelligent Investor. I am on my annual vacation right now and went thru a medical treatment on my ears. So its like a compulsory rest :)

Regards, Rohit