Turbulent Markets, but JAINMATRIX Model Portfolios Outperform

Dear Investor,                                                                                                                          29th June 2015

The market has been more turbulent in the last 2 months. However, JainMatrix Investments continues to do well on its research portfolio.
JainMatrix Investments is a premium Investment Service for Indian equity. It’s independent, honest and direct. And sharply focused on Investor Returns from its two Model Portfolios.
Here’s our update on the Track Record of the JainMatrix tracked portfolios and shares.
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Performance Tracker

See the compilation of performance of the Model portfolios and the entire tracked Stock Universe from JainMatrix Investments.

 * As per Value Research on 29th June 2015.

PERFORMANCE description

The Top Ten stocks from the tracked Stock Universe had annualized returns of 124.1% on 29th June 2015, compared to 132.9% on 07th April 2015. These Top Ten are from a total portfolio of 49 stocks + 1 ETF.
  • The Large Cap Retirement Model Portfolio is ahead of benchmarks, and in top 10% of MFs.
    1. The annualized return was 21.9% for the 7 stocks, bettering the indices of Sensex 17.1% and Nifty 16.5% over 30 months.
    2. The JainMatrix Retirement Large Cap Model Portfolio outperformed by 4.8%. 
    3. The best performing large cap mutual fund over a 3 year period had 23.9% annualized returns, calculated on Value Research website . We are happy to be in the top 10% of the Large Cap equity MFs by performance.
  • TheMulti-bagger Mid & Small Cap Model Portfolio continues its aggressive out-performance of the comparable Indices and equity MFs.
    1. It gave an annualized return of 78.4% for the 7 stocks, better than indices of CNX Midcap, BSE Midcap and S&P BSE Smallcap over 29 months, details in graphic.
    2. The JainMatrix Multi-bagger MSC Model Portfolio outperformed by 53.7%. 
    3. The best performing Mid & Small Cap MF over this period provided 42% annualized returns, per Value Research website.
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  • Also we only include firms in our portfolio 90 days after publishing the report, to avoid errors from short-term price movements.
  • Note that Equity investments are inherently risky. Take help from your ‘Investment Adviser’ before allocating funds for the equity asset class. …

Investment Approach 

  • We research stocks based on their fundamentals including financials, industry prospects, management, etc.
  • We cannot assume that these stocks above will give you similar returns in future. Past performance is no guarantee of future results. Some volatile stocks have moved within months from the top to negative returns.
  • Much more important than past share price performance is the stability and quality of the businesses, their management, cash flows, etc. As these will reflect in the future share price.
  • These are captured in the JainMatrix Investments recommended portfolios such as the Large Cap Portfolio 2014, and the Mid Cap Portfolio 2014. These model portfolios align your investments and risk appetite to get appropriate gains.
  • The JainMatrix Investment Advisory Service is available for a subscription fee.
  • JainMatrix Investment is an independent research firm, with business income only from customer subscriptions, not transactions, and with no links to corporates.  This helps us stay focused on quality Research !!

JainMatrix Investment Advisory Service is available for an annual Subscription. 

Subscribe NOW to get the best Investment Service

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Seven Short Steps to Long Term Investing Success

Dear Investors,
I got a question on a discussion forum, about Long Term Investing. I found the line of thought very interesting, and my reply is in the form of the Seven Steps to Long Term Investing Success !!
So here goes.  (thanks Srini and Musa).
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First the question

Dear All,
Need some advise.
I intend to invest some X amount in some select stocks with a holding period of about 8-9 years.
Is it good to leave it untouched till the end of holding period? Or is it advisable to set some yearly target say 20% or so and exit once the target is achieved in a year and wait for some lows to happen to reenter the stock for a target n exit once again and continue this cycle till the end of Holding year.
I don’t know how the above approach of mine sounds, but need you to give me some thoughts on how to go about it.
Regards.
..
Here’s my Answer:
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the Seven short Steps to Long Term Investing Success

Dear Investor,
This is a pretty good question.
The investing process I feel you should follow is:
  1. Stock Selection: Obviously, choose your Select Stocks well. Since the holding period is 8-9 years, you need to look closely at the fundamentals. Each stock needs to have an investment thesis (eg. capacity expansion of 200%, or a new product launch that can grow profits 150%) and a price target for a specified period of time like say 2-3 years. These need to be high conviction ideas. Plus good Portfolio thinking is that there should not be an overexposure to any one sector, to reduce overall sector risk.
  2. Investment: Buy the Selected Shares. One way to simplify things is to buy shares of roughly equal monetary value.
  3. Monitor the Stocks: Next these shares need to be monitored. Is the investment thesis being played out in reality? Any external events affecting it? A six monthly review for these Select Stocks may be sufficient.
  4. Minimize Transactions: I would disagree about the 20% annual targets and exit /entry cycle. Good well chosen shares may appreciate even 100% in a good year, yet may still be cheap and worth buying, even at this level, if the 2-3 year outlook still looks good. Every delivery based entry and exit can cost you upto 0.6% of your asset, so transactions should be minimized for long term investments.
  5. Use Dips to Buy: Also the reverse may also happen. The investment thesis may be playing out well, but the share price may have fallen 20%. You need to be patient here, and can even buy more of this stock if you have funds.
  6. Exit Non-Performers: My approach would be to (on Review) sell those Stocks that are not performing on fundamentals as per the investment thesis (this may or may not be reflected in the price performance) and perhaps buy more of those that are performing. There is no shame in admitting mistakes. Even investment greats like Anthony Bolton (I’m reading a great book by him called Investing Against the Tide) talk about a success/ hit rate of 55-60%. The secret is to identify mistakes and reduce losses by exiting fast.
  7. Time in Market: Over the 8-9 years period a good internal price target to have is to get a 20% annualized return for your Select Stocks. But notice that big returns come in a few years and things may be flat to negative for the others. So I prefer “Time in Market” with “Good Stocks” where you will get the returns over time.
Thats it !! I guess many years of investing have helped me give a short and sweet answer.
Sorry for generating Option 3 compared to 1 or 2 asked by you, but this is my recommended approach.
Here’s to your investing success.
(needless to say, revert to me if you need help with choosing stocks and monitoring  Emoji )
Regards, Punit Jain
Bangalore, Founder, JainMatrix Investments
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DISCLOSURES AND DISCLAIMER

Recipients of this report should be aware that past performance is not necessarily a guide to future performance and all stock investments are subject to market risks. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from a Financial Adviser. This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. JM has been publishing equity research reports since Nov 2012. JM has applied for certification under SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Thanks for the appreciation

Dear Readers,

I’d like to thank one of my subscribers for his appreciation note.

Punit Jain

On Fri, May 22, 2015 at 6:37 PM, Mohit <mohit…..@gmail.com> wrote:

 

Investment Outlook and Large Cap Portfolio Note

Positive Outlook and The Portfolio Outperforms by 6.2%

Report dated: 20th May 2015

JainMatrix Investments presents its Investment Outlook, and the May 2015 update of its Retirement LC Model Portfolio.

Investment Outlook Note

  • It’s now one year since the new government was elected in at the center. We are fairly pleased with this year in the economy. Without many flashy and headline oriented statements, the government is building stability and solidity in the governance. The achievements include successful auctions in Telecom and Coal mines, improvements in the Power and Coal sectors, efficiency in Parliament and improved foreign policy and exchanges. The LPG cylinder subsidy scheme is a successful pilot for other subsidy programs. Petrol and Diesel seem to be subsidy free.
  • Much more needs to be done, of course. But well begun is half done. Note that stock market investors till some years ago gained most from sectors free of government interference and control. Going forward, my confidence is growing that more sectors will be added that are free. The economy will reap benefits from improvements in ease of doing business, economies of scale and the Make in India – Export to the World initiative.
  • The INR/USD rate is now 63.73, and we now peg this to be in the range of 62-66.
  • The recent spate of volatility in the Indian stock markets is a normal short term correction after a strong rise over the last 20 months.
  • The Indian market continues to be a magnet for global investment funds, as the Indian economy has the best outlook of the BRICS countries. It is also among the few large economies growing fast.
  • Further we have seen over the last one year that the Indian investor too has come back to the markets. This is partly because other asset classes like Real Estate and Gold are not as attractive.

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In terms of outlook we expect the next few triggers to be:

  • Reductions in interest rates by RBI.
  • Improvements in the Gold asset class with the Gold monetization scheme, which may reduce imports and reduce illiquidity and improve returns from this asset.
  • Infrastructure improvements including fast tracking of projects and better PPP structures.

In terms of Risks we would identify

  1. Excessive volatility in INR-USD exchange rates or crude prices
  2. Opacity and slow resolution of foreign ownership and investment taxation issues (Vodaphone, Nokia, MAT, etc.)
  3. Poor or uneven rainfall in coming season

JainMatrix Retirement Large Cap Model Portfolio Theme

  • We renamed the portfolio as the JainMatrix Retirement Large Cap Model Portfolio.
  • The objective of the Retirement LCMP is to outperform the Sensex and Nifty by 5-10%. We have achieved this consistently over the last 29 months.
  • The seven stocks in the portfolio are from seven different sectors, but the overall focus is on Banking, Consumption, Exports and Infrastructure.

Portfolio Performance

  • The portfolio has only 7 BUY shares.
  • The RLCMP continues to perform well. On average the 7 Buy recommendation shares were up by absolute 55.5% and annualized 24.6%.
  • The Sensex and Nifty were up by 18.3% and 18.0% annualized in the same period.
  • The JainMatrix active Retirement LC Model Portfolio thus outperformed by 6.2%.
  • Investors need to continue to invest in these shares in a SIP mode for safe long term returns.

Upgrade to Premium User to receive this Model Portfolio.

Some previous notes for this Portfolio

JainMatrix investments – other useful reports

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DISCLOSURES AND DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. JM has been publishing equity research reports since Nov 2012. JM is voluntarily compliant with SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

VRL Logistics IPO – Winner Takes All

  • Date 14th April 2015
  • IPO Price range: Rs. 195-205
  • IPO Period: 15-17th Apr 2015
  • Mid Cap – Rs 1900 cr Mkt Cap
  • Industry – Transportation, Goods and Passengers
  • Advice: BUY, with a 2 year holding period

Summary:

  • The transportation sector is recognized as a leading indicator of the economic cycle of the country. We expect this sector to do well over the next few years.
  • VRL Logistics is one of the larger organized players of this sector. The firm represents several high potential businesses, built over many years by the first and now second generation entrepreneurs.
  • We feel that in this sector the business volumes are critical and the top 2-3 players will dominate, a ‘Winner Tales All’ situation. VRL is well placed to be the winner over the next few years.
  • Management quality appears good. Like the real estate sector, doing business in transportation too involves many legal issues and disputes, the resolution of which may take many years due to our glacial judicial process. We downplay the large number of pending cases involving VRL.
  • VRL appears to be business wise aggressive while financially sound, using PE funding for new ventures, and ensuring positive FCF for 5 of the last 6 years. This is a good combination.
  • The VRL Logistics IPO is rated medium risk, but a BUY, with a 2 year holding period.

VRL Logistics Financials, by JainMatrix Investments

VRL Logistics Financials, by JainMatrix Investments

IPO highlights

  • IPO is open from 15-17th Apr 2015 with Issue Price band: Rs.195-205 per share
  • Shares offered to public: 2.27 crores of Face Value: Rs.10 per share
  • Shares offered as portion of equity post issue: 25%. Post IPO, promoters stake would reduce to 70%, another 25% would be sold in IPO to numerous parties and the rest 5% held by private investors.
  • The amount proposed to be raised: Rs.467 crores (at upper end). The IPO proceed will be used for:
    1. Rs 350 crore – exit by New Silk Route, PE firm and promoters Dr. Vijay and Anand Sankeshwar.
    2. Rs 67 crore on acquisition of new fleet.
    3. Rs 28 crore for repayment of debts and
    4. The rest of about Rs 22 cr. would be spent for corporate purposes.
  • These objects appear to be reasonable – for investor exit and to grow the core business of VRL.

Download this Research Report

JainMatrix Investments has created a 4 page Research report of VRL Logistics IPO. This captures our perspective of VRL Logistics IPO in the current economic context, including  financial review and Cash Flow analysis, SWOT review  with Risks and Overall Expert Opinion.

JainMatrix Investments_VRL IPO_Apr2015

This report is available for your usage. Click link above to download the PDF format report.

JainMatrix Knowledge Base:

See other useful reports

Disclosures and Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. JM has been publishing equity research reports since Nov 2012. JM and its promoters/ employees have no financial interest in VRL Logistics Ltd or their group companies, and no known material conflict of interest as on date of publication of this report. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Also see: https://jainmatrix.wordpress.com/disclaimer/

Inox Wind IPO – Positive, and for the Environment

Dear Investor,

Here is a short post facto report on the Inox Wind IPO.

  • The IPO received excellent response with an 18 times over-subscription.
  • Retail was only 2 times over while institutional, HNI and corporates’ portions were subscribed over 35 times.
  • Naturally the pent up demand showed up on listing.
  • Listing on April 9th, yesterday, was enthusiastic and the share closed the day with a 35% gain at Rs 438.
  • Today, at the time of going into the cloud, the share is at 442, a solid 43% gain for Retail investors.
  • We will reiterate our advice as below, its a medium risk BUY, and hold for 2 years.

Happily for us at JainMatrix, another win and a correct analysis, (so far).

Happy investing,

Punit Jain

———————————————————————————————–

  • Date 18th March 2015
  • Price range: Rs. 315-325
  • IPO Period:  18-20th Mar 2015
  • Mid Cap – Rs 7200 cr Mkt Cap
  • Industry – Wind Power (Equipment and Projects)
  • Advice: medium risk BUY, and hold for 2 years

Summary:

  • INOX is certainly in the right sector of Wind power generation, where we should see good double digit growth for a decade. It also is an environmentally positive segment. The government is doing a lot to promote / subsidize it.
  • The firm itself has scaled up well so far, and the promotor group is good. There is also a scarcity of good quality listed firms in this sector.
  • The challenge for this firm is to manage costs, cash flows and technology stability. It has to perhaps slow down growth in the next few years, in order to be a more financially feasible concern.
  • The INOX Wind IPO is rated a BUY, with medium risk, and investors can purchase for a 2 year holding period.

Financials

 Inox Wind – 5 year financials 

IPO highlights

  • IPO is open from 18-20th Mar 2015 with Issue Price band: Rs.315-325 per share
  • There is a discount of Rs 15 for retail and employee categories
  • Shares offered to public: 3.26 crores of Face Value: Rs.10 per share
  • Shares offered as portion of equity post issue: 13.9%
  • Amount proposed to be raised: Rs.1025 crores (at upper end). The IPO proceed will be used for:
    • 300 crore is an exit by Inox Wind promoter Gujarat Fluorochemicals
    • 300 crore will be used to fund long term working capital requirements
    • 150 crore towards expansion of manufacturing facilities in Himachal Pradesh and Gujarat
    • 150 crore for project site development, mostly by subsidiary IWISL
    • The rest of about 100 crore will be for General Corporate Purposes
  • These objects appear to be reasonable and will grow the core business of wind power generation.

Download this Research Report

JainMatrix Investments has created a 5 page Research report of INOX Wind IPO. This captures our unique perspective on INOX including Promoter Group review, Industry and Competition Notes, Strengths /Positives, Risks and Challenges and Overall Opinion.

Inox Wind IPO_JainMatrix Investments_Mar2015

This report is now available for your usage. Click link above to download the PDF format report.

JainMatrix Knowledge Base:

See other useful reports

Disclosures and Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. JM has been publishing equity research reports since Nov 2012. JM and its promoters/ employees have no financial interest in Inox Wind Ltd or their group companies, and no known material conflict of interest as on date of publication of this report. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Also see: https://jainmatrix.wordpress.com/disclaimer/

JainMatrix Investments – Track Record update of 7th Apr2015

Dear Investor,                                                                                                                          7th April 2015

JainMatrix Investments is a premium Investment Service for Indian equity. It’s independent, honest and direct. And sharply focused on Investor Returns from its two Model Portfolios.
As we head into the earnings season of Q4FY15, here’s our update on the Track Record of JainMatrix.

Performance Tracker

See the compilation of performance of the Model portfolios and the entire tracked Stock Universe from JainMatrix Investments.
TrackRec_Apr2015 * As per Value Research on 07th Apr 2015. Click on image to enlarge.

PERFORMANCE description

 JainMatrix Investments announces an excellent performance of its research portfolio. The Top Ten stocks from the tracked Stock Universe had annualized returns of 132.9% on 07th April 2015, compared to 137.9% on 05th March 2015. These Top Ten are from a total portfolio of 49 stocks + 1 ETF.
  • The Large Cap Model Portfolio is well ahead of the benchmarks, and in top 10% of MFs.
    1. The annualized return was 28.2% for the 7 stocks, bettering the indices of Sensex 20.4% and Nifty 20.3% over 27 months.
    2. The best performing large cap equity mutual fund over this period provided 36.3% annualized returns, calculated on Value Research website on 07th April 2015. We are happy to be in the top bracket of the Large Cap equity MFs by performance.
    3. JainMatrix Investments outperforms Sensex by 7.8% annualized. 
  • The Mid & Small Cap Model Portfolio continues its aggressive out-performance of the comparable Indices and equity MFs.
    1. It gave an annualized return of 95.6% for the 7 stocks, better than indices of CNX Midcap, BSE Midcap and S&P BSE Smallcap over 26 months, details in graphic.
    2. The best performing Mid & Small Cap MF over this period provided 65.9% annualized returns, per Value Research website.
    3. JainMatrix Investments outperforms the S&P BSE Small Cap by 66.1% annualized. 

Why go anywhere else when you can get such returns? Sign up for the JainMatrix Investment Service to take the right decisions, whatever the event, in your investing journey…

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How is this performance calculated? 

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Report of 4th Dec 2013

Here is an older calculation table, done on 4th Dec 2013. It contains 8 Buys and 2 Sells. A Sell call based on fundamentals is very valuable, and investors may exit/ short trade based on this.
I share with you the data of the share prices on the day of reporting and today. My top ten picks had an annualized returns of 73.2%, as on 4th Dec 2013. See for yourself.
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Stock Call  Report  Date Price on Call Price on  4:12:13 Abs. % Price Change Days since Call Annual -ized Return Reports published on website
1 ABC Buy 12:6:13 400 693 73 172 155
2 DEF Buy 7:8:13 116 164.8 42 117 131
3 GHI Buy 6:9:13 238 282.3 19 88 77
4 JKL Sell 15:1:13 56.9 16.75 -71 319 71
5 MNO Buy 31:1:12 723 1460 102 664 56
6 PQR Sell 26:6:12 90.3 42 -53 518 53
7 STU Buy 18:4:12 1091 2000 83 586 52
8 VW Buy 4:2:13 131 185 42 300 51
9 WX Buy 1:6:12 225 393 75 543 50
10 YZ Buy 7:7:12 576 857 49 507 35
  • The average Annualized Return from above 10 stocks is 73.2%.
  • * – these are absolute returns on Sell calls.
  • Also we only include firms in our portfolio 90 days after publishing the report, to avoid errors from short-term price movements.
Note that Equity investments are inherently risky. Take help from your ‘Investment Adviser’ before allocating funds for the equity asset class.

Investment Approach 

  • We research stocks based on their fundamentals including financials, industry prospects, management, etc.
  • We cannot assume that these stocks above will give you similar returns in future. Past performance is no guarantee of future results. Some volatile stocks have moved within months from the top to negative returns.
  • Much more important than past share price performance is the stability and quality of the businesses, their management, cash flows, etc. As these will reflect in the future share price.
  • These are captured in the JainMatrix Investments recommended portfolios such as the Large Cap Portfolio 2014the Mid Cap Portfolio 2014 and the Post Elections Investment Seven. These model portfolios align your investments and risk appetite to get appropriate gains.
  • The JainMatrix Investment Advisory Service is available for a subscription fee.
  • JainMatrix Investment is an independent research firm, with business income only from customer subscriptions, not transactions, and with no links to corporates.  This helps us stay focused on quality Research !!

JainMatrix Investment Advisory Service is available for an annual Subscription. 

Subscribe NOW to get the best Investment Service

Click – Offering