My VP Portfolio : Update

Update : Added following shares on 25 - APR 2014


8. Bambino Agro Industries : 10 % (10K) at 62.5/- with a total number of 160 shares.

9. EPC Industries  : 10 % (10K) at 110/- with a total number of 90 shares.

10. Nitco : 5 % (5K) at 15/- with a total number of 330 shares.

Now the selection and inclusion is done for almost 75 % of initial corpus.

The reasons for including these scrips along with a final selection list, and detailed description and justification will be posted soon.

PS: You may see and wonder my portfolio is more turned towards AGRI! Like turning towards IT or INFRA by some funds earlier or exclusively creating INFRA fund. And later each crashed. With the present weather analysis, with a shortage of rain, surely some of these shares may under perform, but with the monthly investment amount of 5K, we will be able to add more quality stocks! After all food is going to be a ever green sector with all these population growth. 

Building My VP Portfolio : Brick by Brick

This time I am updating with my selections and purchases with my VP Portfolio.
Today ( 23 -APR - 2014 ) as a beginning I have almost invested 50 % of the initial corpus 50K of Rs. 1 Lakh to these selected shares.

The purchases are listed as below, and justification for each selection is given at the end.

SL No.	Name of Company	Allotted  Amount (K)	Purchase Price	No. of Shares	Initial % of Portfolio
1	Arrow Coated Products	10 K	61.5	160	10 %
2	Granules India	10 K	305	32	10 %
3	Nath Bio Genes	10 K	81	123	10 %
4	Camphor & Allied Products	4.5 K	217	20	4.5 %
5	V2 Retail	5 K	15	330	5 %
6	Ashapura Minechem	5 K	61.5	80	5 %
7	Jai Blalaji *	4.5 K	13.5	330	4.5%
	Free Cash	51 K			51 %
	Total	100 K			100%

Justification for each selection

1. Arrow Coated Products

Already a 4 bagger from Valuepick's list, and you may wonder why I have selected this one. 

But truly the reasons are as follows. 

     (i) As VP mentioned, this company is for future. Products having tremendous potential for future.

     (ii) If company succeeds in marketing, Scalability of production through Patents with IP Protection.

     (iii) Even at CMP its not very overpriced. Trades around 10 -12 PE

2. Granules India

Even though appreciated more than 250% from VP recommended price, the EPS growth is also according to the tune. And company having great future plans to produce high margin products. (More details from VP blog.  value-picks.blogspot.com/2012/06/granules-india-buy.html‎ )

3. Nath Bio Genes

A great story from Agri seed sector and dirt cheap valuations ( Promoter's history gives a slightly negative bias. Need to watch through the next year to validate the promoter's attitude to take a final call)

4. Camphor & Allied Products

To give fragrance to the portfolio !

5. V2 Retail

A possible very big coming back story

6. Ashapura Minechem

With turnaround scenario and having deep mine land reserves.

7. Jai Balaji

A non VP recommended stock. Either a gone case or a very big multibagger in future. Investing due to the risk reward ratio and considering the present valuation. 

My Valuepick Portfolio : Aim

Simply putting, this portfolio aims at long term wealth creation by starting modestly, and putting a regular sum in SIP mode, if any investment opportunity is found. Otherwise the SIP amount will be kept as cash till an interesting opportunity is found.

I intend to start my portfolio with a sum of Rs 1 Lakh (making it myself feasible and any one of the reader can also start with that), although you can make it to any multiple based on your financials. Also a monthly sum of Rs. 5000/- is dedicated to the portfolio, either for quick purchase or for future use.

The next thump rule is at any time the number of stocks in hand will be between 12 (minimum) to 24 (maximum). Under this minimum 80% of stocks will be screened from valuepick portfolio. The screening details and selections will be updated in next post. And initial weight of each stock will be between 2% (minimum) to 20% (maximum).

Then our aim is very long term ( minimum 15 years ) to create a meaningful asset, which itself will give us a steady dividend income later. So normally we wont want to sell a holding share, without fundamental change. Even though if some stocks becomes extremely overvalued based on future earnings we may take partial profit. But under any circumstance, we wont take a complete sellout decision , unless there is fundamental reasons.

HITS & MISSES

This post I am evaluating the greatest success stories of Valuepick along with the badly misfired ones.

TOP 10 HITS

1	LA OPALA RG	1040 %
2	KAVERI SEED COMPANY	1019 %
3	AVANTI FEEDS	877 %
4	ATUL AUTO	805 %
5	POLY MEDICURE	646 %
6	AHLCON PARENTERALS	617 %
7	DFM FOODS	547 %
8	ACCELYA KALE SOLUTIONS	526 %
9	CAMLIN FINE SCIENCES	400 %
10	ARROW COATED PRODUCTS	376 %

TOP 10 MISSES 

1	OPTO CIRCUITS	- 87 %
2	RUNGTA IRRIGATION	- 86 %
3	MUDRA LIFESTYLE	- 83 %
4	RAMKY INFRASTRUCTURE	- 78 %
5	PIONEER INVESTCORP	- 77 %
6	GEI INDUSTRIAL SYSTEMS	- 76 %
7	TIMEX GROUP	- 76 %
8	AMCO INDIA	- 72 %
9	RAJVIR INDUSTRIES	- 70 %
10	VULCAN ENGINEERS	- 70 %

But don't become upset by seeing these misses. Suppose, if you have invested a fixed 5000/- on each of these 20 shares, you might have invested a total sum of Rs. 1 Lakh Rupees. And the present value of your investment will be just above Rs. 4 Lakhs! Or as I mentioned earlier, if you have invested in all of his recommendations  with a sum of Rs. 1 Lakh rupees, its still be worth  around Rs. 1.5 Lakhs today excluding the dividends you received.

Note: Share prices are based on 15- APR - 2014 , used for calculations

Post 2010 & Beyond

Evidently Valuepick's success rate and return rate increases post 2010. We can analyse the post era after 2010.

Assumption : We invest a fixed Rs. 5000/- ( 5K ) per recommendation. Based on VP's any profit book call, we sell the required shares to retrieve 5K and the remaining shares we keep as cost free, and its market value is used for these calculations. I obtained the following results for these years.

Year	No. of Comp. Inv.	Net Inv. Amt.	Present Value	Profit / Loss %
2011	47	235 K	425 K	81 %
2012	39	195 K	263.3 K	35 %
2013	27	135 K	202.9 K	50 %
Overall	113	565 K	891.2 K	58 %

An overall return of 58%, comparing with three year monthly average of SENSEX (18428) to present SENSEX value (22484) gives you a growth of 22% only. Beating the market or SENSEX by a whopping 163 % !!. KUDOS to Valuepick for this tremendous achievement !!!

Even if we consider or add the year 2010 performance alone or adding all the years together and use a all year recommendations, it always beat the market.

You will get a Overall profit percentage of 49% (including year 2010 list) and it still beats SENSEX by 122% . A remarkable achievement for any fund managers or analyst. 

By stating these analysis, I am reassuring the ingenuity of our beloved Honorable. Valuepick. Its hard to find a genuine analyst blogger these days, especially if you evaluate their past track record. Even paid portfolio managers fail to generate these return to these clients.

And purpose of my this blog is to create a systematic long term portfolio in-order to create long term wealth, based on our Valuepick recommendations and compare its performance on coming days.

PS: If any reader have any doubt / clarification regarding the figures I stated, please mail me at myvaluepickport@gmail.com , for further details.

Rgds.

Through the Years

As we can easily see the success rate increases through the years. I think VP becomes more selective in suggesting any new company. (This is evident from the number of companies he suggests in the site.)

We can summarize his success rate based on advance & declines through the years as below.

Success Rate based on Number of shares

Year	Advan + Decl	Advances	Declines	Success Rate
2010	93	41	52	44 %
2011	37	24	13	64 %
2012	25	16	9	64 %
2013	22	19	3	86 %
Overall	177	100	77	56 %

The success rate increases from 44 % (in 2010) to a whopping 86% ( in 2013) even very less differences in the overall market levels or in SENSEX or NIFTY. This mainly I attribute to the too many number of recommendation happen in year 2010.

But What about the Performance of 2010 Picks ?

But we know success rate based on number of shares is NOT the correct way to evaluate. Instead I used to find out the success rate based on asset growth invested in these companies. Assuming a fixed equal sum is invested on all these picks in the year 2010, the end result was amusing. 

 If you have invested Rs. 5000/- ( 5K ) per share in each recommendation, you might have invested 595K (119 Companies), but the present value of the investment will be 832.5 K, a whopping return of 39.91%, and comparing with SENSEX monthly average of 2010 ( 18207 ) to closing rate of SENSEX ( 22484 )  gives you 23%. Beating SENSEX by  almost 74 % !! 

Note : Dividend yield NOT added to these calculations.

How his recommendations performed in post 2010 in next post.

A Snapshot of Up & Down

It's more than four years  the valuepick blog is providing us with insightful investment ideas, and now I am just trying to analyse the Up & Down patterns of his picks.

Through the years he recommended more than 300 Companies ( A very commendable number indeed) and, which included Recommendations to Buy, Watch, Keep an eye, Safe bets, Risky, Extremely Risky, Multibagger, Reiterate, and Repeat calls along with some profit book / loss book suggestions.

Out of these 300, there are few companies he already recommended to exit either on profit or loss. Also few companies are delisted. Around 30 companies falls in to this list.

Next I analysed his High Risk / Watch bets, around 40 companies  falls in to this category. But unfortunately very few of these recommendations out performed ( I will give you a detailed study of these companies later as a separate post).

So, Now I am going to concentrate on the remaining companies, precisely 232 companies, which include his recommendations from 2010 to 2013 (Excluding 2014 ongoing call, since it is too early to evaluate the performance of recent calls).

I am giving a snapshot of these 232 companies here.

Year	Number of Recommendations	Advances	Neutral*	Declines
2010	119	41	26	52
2011	47	24	10	13
2012	39	16	14	9
2013	27	19	5	3
Total	232	100	55	77

* Neutral ( -20% to 0% to +20% movement is taken as neutral, since these movements are inherent to the market with less a cause)

These figures may some times looks quite ordinary to you. But the more we analyse into the details, we may find new insights. That details covered in the next posts.

PS: I have selected these particular days to analyse these recommendation since, even though the market is at almost high, its not true for midcaps and small caps. The average market values for these shares are neither cheap nor highly stretched. So personally feeling this is the right time to analyse these share values with all possible justification ( Taken 15th - APR - 2014 share values as the Market Price of shares in this research and BSE SENSEX @ 22,484)

ThankYou Valuepick!!

Dear Friends,

First of all, I use this opportunity to thank  my sincere gratitude towards the mentor of the blog http://www.value-picks.blogspot.in , for all the help he is lending to his followers through out these years. Needless to mention, from a humble beginning in the early 2010,  he is quite popular figure in the investor circle now. In short he requires no formal introduction these days.

My blog is a humble attempt from my side to analyse this great value picker's recommendations, growth rate , merits and demerits after following his blog.  

Even though following his blog from 2010 itself, there was no systematic approach I followed to deal with his recommendation. To build a systematic portfolio based on recommendation, I am using this blog and dedicate it to all the readers! As a beginning to this I have analysed almost all of his previous recommendation and reached on some analytic conclusions.

Those findings will be shared in following Posts.

Regards.