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Sunday, January 20, 2013

Your Portfolio analysis and Questions on Mahindra Holidays, GTL Group, Opto, Unitech, and Infrastructure Sector!

Valued readers have sent in these queries:

Question: Please advice on my portfolio given below, which is currently down by almost 11.25%. Due to this I am under tremendous pressure and don't know what to do. How do I handle the below scrip? Please advice/suggest:

· Balrampur Chini 1000 @Rs.67.02/-

· Central Bank 250 @Rs.94.55/-

· Dabur 225 @Rs.131.98/-

· Exide 225 @Rs.149.96/-

· GSFC 350 @Rs.72.70/-

· Geometric Ltd 275 @Rs.111.63/-

· Indoco Remedies 300 @Rs.68.2/-

· Jindal Saw 300 @Rs.130.98/-

· Punjab & Sind Bank 295 @Rs.80.6/-

· Rolta India 555 @Rs.65.94/-

· Zylog Systems 400 @Rs.67.8/-

Total Portfolio Amount (At Purchase) Rs.353000/-. Currently it is at Rs. 314000/- (Down by almost 11.25%). Please give suggestions.


Typically, when one decides to invest in Stocks in cash segment, you should brace yourself for stop-loss of at-least 20% price movement against you. Stock markets are volatile by their very nature, because millions of investors get together every day on stock exchanges and buy and sell these instruments based on news, sentiments and results. Thus stocks prices will be volatile and one should not get unduly worried by 10% movement against your purchase price. However, it is a good idea to monitor your portfolio daily and keep track of overall market movement. Typically it’s a good idea to not to invest money that you will personally need in next 6-12 months, in the stock markets. Hence long term investment in good stocks is only way for retail investor to profit from markets.

One way to analyze any portfolio is to divide all stocks into three segments – Good, Bad and Ugly Stocks. Good stocks are good picks in every market phase. Bad are otherwise decent stocks but are in short term downtrend or short term problems. Ugly are poor quality stocks you should stay away from.

Using this Good-Bad-Ugly approach in your portfolio, one can segment your portfolio in this manner:

Good Stocks:

Balrampur Chini, Dabur, Indoco, Rolta, Jindal Saw, GSFC, Geometric, Punjab and Sind bank.

Bad Stocks:

Exide, Zylog.

Ugly Stocks:

Central Bank.

Now what to do with this categorization! An investor can buy more of Good stocks on dips. For Bad stocks, investor can simply hold and hope for firm to turnaround to better times and move them to Good category. For Ugly stocks, investor needs to book loss or exit at cost price.

As most of your stocks are good quality stocks and you need not worry endlessly on current 11% underperformance of your portfolio. The markets are poised for a decent bull run, and hence you should be able to see good profits in your investments over a period of next 6-12 months.

Question: Please advice whether Mahindra Holidays is a good investment for 1-2 year horizon , My cousins enrolled in their packages last year and they are of opinion that the company is very good for investment since it has already got customers with 10-20 year horizon and has long way to go in terms of properties also. What do you suggest about investment in this stock, please advice


Mahindra Holidays and Resorts is a unique concept stock as not many listed firms exist in this segment, other than Sterling Resorts and Country Club to an extent. However, in comparison to Sterling, just to take a example, Mahindra Holidays is not trading cheaply. It is richly valued at 2750 crores with 1000 crores of debt. The revenues are growing sequentially with decent growth and annual topline is close to 620 crores for Mar, 12.

The trick in this stock is to look at Shareholding percentage and 82.69% holding is with Promoters themselves. Thus being a concept stock with little freehold, there is not many sellers available, even on a bad day.

Technically speaking, looking at charts, support is close at 318 levels. 260 is another support which is all time low and unlikely to break. So downside is low and on upside, stock can see levels such as 360, then 415 and 460 as well in next one year or so.

Question: I want to buy 200 shares of GTL ltd and GTL Infra each. What's your advice on this? And any other share under Rs 30/- that you can suggest.


Both GTL and GTL Infra are having severe debt related issues currently. With interest rates poised to come down in 2013, firms like these which had terrible time in last two years may prosper.

However, if you look at GTL Infra, even Sept, 12 results are not announced yet, whereas some of the good companies gave already declared Dec, 12 results or are in process of doing so. So, how do investors make a decision if they have to wait for 6 months for quarterly results to appear?

This points to deeper issues in GTL group, and hence one can avoid these two companies for now. Both firms are also loss making in past five quarters and hence severe stock crash is justified in their case. So net, these firms are to be avoided for now.

I would suggest, please don’t look at “Stock Price under 30” kind of filters for your investment. Look for good quality stocks with transparent management and value price for your investments.

Question: I am holding 2000 shares of LITL (Lanco Infra) @ 13/ and 1000 GMR infra @ 17.60/ share since one months. What should i do whether to hold it or sell it. I can hold it for a period of 2 to 3 years Please advice.


Lanco Infra (LITL) and GMR Infra are from the category of Infrastructure stocks which got hammered in past two years with interest rate climbing, government indecision on Infra sector and various project cancellations or holdup.

Out of these adverse issues, only Interest rate will get resolved in year 2013. Interest rate decline may take place only in the later part of 2013. Current RBI governor is reluctant to reduce interest rates and one may have to wait for Sept, 13 when RBI regime will change for any aggressive measures.

So, good days are still afar for Infra sector. For such investors with great patience, let’s look at fundamental and technical for these stocks.

LITL latest quarterly results indicated declining revenues and firm was barely profitable. Profitability will be a question in next few quarters as well. Promoter holding is high but slightly declining with FII holding declining as well. Firm is trading close to its book value.

On charts, LITL is stuck in a large triangle formation from past four months. Break of this triangle formation will decide its future direction. Support is at 10.4 and final support at 8.48.

Upward targets of 19.7, 25.1 and 30.9 are doable in next 12 months. So you can hold for next 12 months.

Fundamentals of GMR Infra are in similar shape with sector specific issues plaguing both the firms. The charts for GMR indicate support at 17.6, breaking which one should exit. You seem to have bought at the best price possible.

21.8, 27 and 33.5 are doable in next 12 months, so you can hold GMR as well for 12 months.

Question: I am holding 3000 shares of A2Z at 62. What shall I do?


A2Z Maintenance was a popular stock in investment circles earlier as Guru Investor Rakesh Jhunjhunwala had a stake in the scrip. However, the stock plunged as the Guru Investor later pulled out and resigned from the directorship. Fundamentally as well, the scrip seems to be facing headwinds with Sept,12 quarter revenues have declined and stock posting losses.

Charts are severely in downtrend, with stock at all times low currently and last candle is a huge red candle breaking bottom convincingly. The fall is a sharp plunge and hence unlikely to continue in its present form. Scrip may decline slowly once some buyers emerge at lower prices. There is no support on charts currently.

You can hold the scrip as you are already in deep loss, but do not make any fresh investments. Once it trades above your cost price, you can exit. In next 6-12 months, once 56 is crossed, one can see 62 and 73 levels as well.

Question: I have bought 3000 shares of Unitech at 36.70. Do you see the stock moving up with a six month target? Do you want to hold or sell? Please advise me.


Unitech seems to have risen from ashes. From a terrible low of 18, stock has already more than doubled and is in good uptrend. Next possible targets are 47, crossing which 60 and 68 are possible.

Fundamentally, things are still soft with firm barely profitability in Sept,12 quarter. All depends on how the topline revives and how the results shape up to be in next 1-2 quarters.

One can keep a stoploss at 32 and keep holding the stock for next 6-12 months.

Question: Please advise me on what to do with Opto circuits.
I am stuck with huge losses in this stock.


Opto seems to have support at 100, and is difficult to go below 100. Even if 100 is broken, next support is at 80, which will definitely hold.

Financials seems to be in good shape, however low promoter holding is a worry. Promoters are buying warrants at 145, so nothing to worry till 100 price level is sustained.


  1. Hi Stockfundoo

    thank you very much for replying on mahindra holidays

    please have a look at my portfolio below and kindly advice

    iam planing to add mahindra holidays and increase stake in pvr & ramky

    Alembic Pharma 250 at 68
    Alahabad bank 200 at 138
    apollo tyres 400 at 71.72
    Dena bank 200 at 76
    hanung toys 100 at 175
    HDIL 70 at 82.03
    L&TFin Holdings 750 at 65
    NIIT 150 at 35
    Provogue 720 at 16
    PVR 150 at 269
    Ramky 300 at 119
    Rei agro 10000 at 10.95
    spicejet 600 at 34
    Tata Global 50 at 179
    Union Bank 60 at 185

    1. As i mentioned above in portfolio analysis question, divide your shares in Good, Bad, Ugly and have a re-look at them.

      You seem to have good stocks mostly, so no worries from portfolio cleaning perspective. PVR may be overvalued currently, so you can be cautious about buying more.

    2. Thank you for reviewing my portfolio sir yes i will wait for PVR to come down

  2. In earlier post you talked about Zylog a good stock being tageted by bear cartel, now you are saying it is bad stock. I am bit confused can you clear things for me on this ? Thanks in advance.

    1. Pls read the article above carefully. I have categorized stocks in Good, Bad and Ugly. Good here means good stocks which are also going strong currently. Bad means good stocks, which are good through rough weather temporarily. Ugly means stocks that you can get rid of.

      Zylog is a good scrip, undergoing temporary issues. Bears take advantage of temporary issues and hammer scrips down. Thats what has happened. Now we need to wait for consolidation to happen and a new cycle to begin.

  3. Hi Naren,

    About Opto, there are rumours in the market about the intentions of promoters especially after the delayed announcement of resignation of company secretary. The business area is good but what about the promoters? Kindly comment - in last couple of days it is hammered massively.

    Also, could you please comment on Hotel Leela & C Mahendra Exports.

    Thanks, Nagesh


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