Monday, March 22, 2010

Relaxo Footwear | Keep adding to positions

Relaxo footwear is in stiff operator grip. Wish I had spotted it early at 25 Rs and cornered a big pie of equity. Nevertheless, I consider this to be a bargain even after the run up. Expected sales in FY 12-13 years are 1000+ crores and bottom line, north of 100+ crores. A humble 10 P/E multiple would give it a valuation of 5x times current market price. And institutional interest can give this mesmerising beauty a multiple of 20x-30x for those who pay with hindsight. As is said, "One learns by looking backwards but life must be lived forwards".  My Telescope see this company to reward its shareholders handsomely. 

Look what has happened to the Page Industries and TTK Prestige after institutions tried to get their foot through the narrow door in 2009. Best Peter Lynch quality of Relaxo is that institutions have yet to discover this story. No maverick fund manager has mustered the courage till date to step forward with Relaxo as part of her portfolio. Zebras as they are, what wise do first herd shall follow later. Stay tuned and keep adding to Relaxo positions to make a tonne and laugh all the way to bank. As a wise man said, 'Your patience will be tested but thy conviction shall be rewarded'. I pray it stays undiscovered a wee while longer so I can keep adding.

Saturday, March 6, 2010

GLOBUS SPIRITS - Next sure shot multibagger

After making decent money in Symphony Comfort Systems, Hawkins,  TTK  Prestige I have bid adieu those counters. These counters can still go up more than double in next year due to Fund and FII buying acceleration into these counters in Dec 09 shareholding pattern filed to the exchanges, but I believe I have found something more precious and more certain. 

I invested only a little sum in 2008 and increased it as the year closed till 2009 March. I introduced more capital in January 2010. Till date I have beaten the sensex since 2008 by a huge margin . Sensex is up about 100% from March Lows and yours truly's portfolio is up 300% plus in same comparable time. No shorts are done, no leverage, plain Jane buy and hold without any exotic puts/calls or other derivatives. I've been fortunate to take out time this year to have read more than 20 books on equities to build a sizeable base of patterns just as a junior chess grandmaster would do on his ascent upwards. Thanks to the medium of internet and books that one is able to learn lifetime lessons from others in a short span for far less the price. 

The company GLOBUS SPIRITS is managed by capable and talented individuals.  Capacity is doubling, company isn't able to meet the demand and has to buy raw material from outside ! I'd like my company to have such problems. Company is debt free which is never an issue. This is as certain a business as Nestle so I expect similar or better valuations, atleast near the market leader. There is double kicker in most of my stock picks, EPS growth and PE rerating, the key to making big money. The other options in this industry are Tilaknagar Industries with suspect management and United Breweries having fraud management on top that did not take lesson from genius investors on not entering airline industry. Besides, with an awesome business as Spirits and Breweries the profit and loss numbers of such companies with leading position indicate 100 ferrarris and masseratis being sustained at shareholders expense. Buffett would never himself be a fan of a profligate person as Vijay Mallaya. Had numbers spoken louder, I could have rethought investments in UB group. But I believe the relative statistics comapring China or West support India's case for major volumes. This sector is scalable and has sizable opportunity something RJ Bhaiya ingrained in us.

Have a profitable investment !

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Glory of God is great.