Biggest opportunities are born during maximum pessimism- Vision 2025

August 25, 2019

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Strategic Alpha

Dear Longterm Investor,

Biggest Opportunities Are Born During Maximum Pessimism.

Slowdown! It seems to be the talk of the town today. the slowdown in a few sectors is visible, but that doesn’t mean the entire economy is into a tailspin. This is the time to create a basket of Safe multibagger stocks keeping 2025 as Vision.

Currently, my best ideas are as Follows along with potential upside and my Conviction level, which I call it as vision 2025 Basket.

1) Maithan Alloys 420 Potential 6-7X in 5 Years, Conviction Level 100%.

2) Star Cement 92 potential 10X in 5-6 years, Conviction Level 85%

3) NALCO 38, Potential 3-5X in 4-5 Years, Conviction Level 75%

4) SAIL 31 ,Potential 10X in 5-6 Years,Conviction Level 80%

5) Butterfly Gandhimati 158 Appliances, Potential 10X in 5-6 years, Conviction Level 60%

6) IDFC First Bank 43 Potential 5X in 5-6 Years, Conviction Level 100%

7) Purvankara 54, Potential 10X in 5-6 Years, Conviction Level 65%

8) Rain Industries 80, Potential 10X in 4-5 Years, Conviction Level 80%

9) Repco Home Finance 300, Potential 10X in 5 years, Conviction Level 70%

10) Selan Exploration 150, Potential 10X in 5 Years, Conviction Level 65%

Above businesses attribute:-
1)Low Debt or Debt-Free Companies.
2)Sound Business Models.
3)High Promotor Holding.
4)Very Low or No Pledged shares
5)Very Old Businesses at least 15 years old.
6)Easy to Understand Businesses.
7)Good Management Pedigree and Trustworthy Promotors
8)Growing Sales, Growing Profits
9)Stocks Near or Below Intrinsic Values
10)Those stock which is cyclical will benefit from business upcycle and commodity upcycle.
12) Promotor Increased Stake.
13) High ROE, High ROCE
14)Companies Benefitting from operating leverage in the future due to underutilized capacity currently.
15)Low PEG ratio
16) High-interest coverage
17) High competitive advantage due to long-standing relationships with their customers, logistical advantages, lowest cost manufacturer.
18) Bargaining power with their suppliers
19) Low on Receivable days
20) High entry barriers due to location advantage, Hugh capital investments to replace their capacities as a competitor.
21)Depressed earnings now in cyclical stocks but as debt-free companies, these will be least affected compared to competitors but bound to do best in the industry as the tide turns.
22) Old school, old economy stocks with no replacements for their products seen in near-decade.
23)Promotors experience in the same business of more than a decade.
24)Proven track record.

Give a bit of chance to luck also. Those celebrity investors are big now, first, they had luck with them and after that, they studied hard to preserve the capital which has been luckily created and deployed it into high-quality compounders which made them really big later on.

Rajiv Khanna admits he made 100’s of crores in Unitech luckily and then after that, he invested into well researched high Conviction stocks to make a huge fortune for himself later on.

Stocks to try luck now

1) Purvankara, (Stock Markets are completely irrational and illogical when it comes to cyclical stocks, during times of real estate boom Unitech was trading at 130 times its earnings, Marketcap was 1.3Lakh crores 250X from its lows in early 2000, currently we don’t know whether real estate boom will happen or not. But whatever bad has to happen has happened to the real estate sector after demonetization and RERA. But if good times to real estate will return in the coming future Purva is one stock which can be a dark horse whose stock is beaten down and hasn’t moved  in the past 1 decade, if we get lucky with a real estate boom then this stock has a potential to trade at astronomical valuations)

2)Butterfly Gandhimati Appliances, A turnaround story.

Note: Above views are for educational purposes only, for stock market success do your own research and due diligence before investing.

Regards,
Suyog Dhavan.

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The author of the blog Mr.Suyog Dhavan is a Full-time Investor / Value Trader and Value investing/Trading Mentor. His style of Investing is inspired by Mohnish Pabrai, Peter Lynch, and Porinju Veliath. He is the founder of Strategic Alpha Wealth, A Premier stock market mentorship firm with a mission to touch the lives of 1Lakh people through its mentorship program.

1 Comment

  1. Strategic Alpha

    Hope everyone made most of the above blog.

    SAIL 31 TO 47
    Maithan alloys 420 to 557
    Butterfly Gandhimati Appliances 158 to 214
    NALCO 38 to 46
    Rain Industries 80 to 105.

    All Followers who were in connect with me shared them Rationale behind SAIL and NALCO , rest all I have written blog already.
    Will soon write about SAIL and NALCO too. But my busy schedule is killing lot of time.

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