Keep things simple in research.
I am always on the look out for companies that can improve the ROE in future.
The current ROE figure does not matter.
All I care is for the ROE number to go up in FY27.
Triggers:
1. Product mix change
2. Economies of scale
3. Volume growth
You find gold when you figure out that the ROE is going to go up in FY27 vs FY26.
This works across any business in any sector in the world.
Keep things simple and you will outperform with ease.
The older I get, the more I realize this:
•A ₹1 crore Mercedes and a ₹15 lakh Toyota will still take you to the same place.
•A ₹10 crore mansion and a ₹50 lakh home will still give you the same sleep.
•A ₹5 lakh Rolex and a ₹5,000 watch will still show the same time.
Happiness is not found in things.
It’s found in peace,
purpose, and the people you love.
BIG NEWS 🚨 A 6-year-old boy in Prem Nagar was brutally attacked by a pitbull, costing him his right ear 💔
Police quickly arrested the dog’s owner and registered a case.
Every stock can be segregated into one of the four categories depending on Growth and PE.
The amount of money you make is directly proportional to the relationship between Growth and PE.
( Growth here refers to Sales Growth)
Case 1. High Growth + Low PE
>> This is the most ideal combination. A multi bagger in the making. A company executing flawlessly will get a PE Re rating.
The company’s performance will ultimately lead it to case 2.
Case 2. High Growth + High PE
>> You will make money here as long as the growth rate sustains. As long as there is growth, the market will reward it with a higher multiple. But one needs to be agile with their exit strategy here. The minute growth even tapers a little bit, it is all hell break loose.
Case 3. Low Growth + High PE
>> The Case 2 Stock moves to Case 3 when the pace of growth comes down.
A sharp derating starts. Buying a stock in this stage is the perfect example of catching a falling knife.
The valuation at this stage looks cheap. Most people who missed the opportunity to make money in first 2 cases will jump now thinking stock is “ sasta”.
This is the biggest trap.
>> PGEL and Tinna Rubber are good examples of how a Stock has moved from Case 1 to Case 2 and Case 3.
Observe the Growth rate and how PE is nothing but a reflection of Sales Growth.
Case 4. Low Growth + Low PE
These are the companies who has never executed, the management has zero hunger, no capex, nothing.
There is a reason few stocks will always look cheap.
Clear avoid.
>> But a company can move from Case 4 to Case 1 provided they come up with a plan where they are doing capex, guidance is strong etc.
Good example : Bella Casa Fashion and Retail.
Your best bet to make money is in Case 1, followed by Case 2.
Avoid case 3 and case 4 with all your heart.
Operating leverage is mandatory for the stock to make money when the company is not growing at the fastest pace among its peers.
What I mean is that say the leading player is growing at 50%.
You can still make money for your shareholders when you grow sales at 25% and get operating leverage in the process.
It means that EPS must grow at a much faster pace than 25% and the stock will see demand.
My preference shall always lie with the fastest car but if I have to choose another player in the same space, I will choose the one getting operating leverage.
@AxisBankSupport@AxisBank i tried to reach you multiple times but my query is still unresolved regarding wrong upi recieved and i paid the amount back and amount is still on hold and that person who paid wrongly is not ready to get the things correct.
Stray dog lovers, watch this young girl & an international kabbadi player with rabies. If this doesn’t break your heart, nothing will.
Rabies can be cured if treatment starts before symptoms appear involving rabies vaccine and rabies immunoglobulin.
A slight delay & painful death - Shame on this activisim
@ICICIBank_Care hi i tried to call your customer care since yesterday but unable to connect even i visited a branch near my office they had no solution for my query and even they tried to call customer care but they are also got exhausted and unable to connect 😔.