Hope all of you are doing well. It’s been a while since we interacted on markets. And in a way, a blessing in disguise. The lack of interaction has been a savior to many investors as I learnt from their tweets, emails, whatsapp messages that they oscillated between a belief of a rally to a certainty of a fall. I don’t know why financial experts on tv believe it is inevitable that they know it all. Further why activism is better than its lack when uncertain. Fortunately my view has been to remain cut off from noise and to remain focused in the pursuit of either finding more capital to invest or in reading up on new stuff, most of which has been off market. I have also used this while to travel a lot and benefitted from some time spent in morning walks, afternoon high teas or off moment cappuccinos to mull over what all I may be doing. Enjoyed the rains too and this time the weather has been a turn on.
Back to markets. Mostly an inactive phase. When the markets dipped as should be done by an investor, the opportunity was used to increase stakes in core ideas. One of the ideas I have twitted on more long has been a combine of pvr and Cinemax. Pvr first appealed to be at some 160 bucks but I become more serious on it around 220. It was not rocket science to read the several crores of rs movies were clogging and the amounts were getting atrocious. It is also evident that such collections are actual theatre collections since the euphoria of announcing nos is almost like the take off in a 100 m race and its dash to the first weekend.
It is also a known fact that funded by an investment from L Capital, pvr chose to acquire Cinemax and thus created a strong hold even in Mumbai markets. Cinemax resulted in an open offer from pvr promoters and then a drop in share price for no reason. At 100 bucks, Cinemax seemed a no brainer with an inevitable open offer or merger into pvr. Well the latter has now materialized and the surprising element is that even post the announcement of merger ratio, Cinemax remained at a huge discount to pvr. Thankfully both have rallied with Cinemax up from 100 to 270 odd and pvr hitting 52 w highs regularly.
Since I owned both and have not sold, the weight age of these two holdings which I count as one given the forthcoming merger is up significantly post their run up and thus Pvr Cinemax combine has entered the core portfolio.
I also used the opportunity to add to den tv and tv18, as digitization is one of my best themes. The recent infusion into den by Goldman at a huge premium is inspiring and it’s tie up with star should do well.
I also increased the weightage of an old fav, Asian paints and added bajaj corp, jyoti labs and to repco finance. Other wight ages increased include hdfc bank, hdfc, bajaj auto, cera, atul auto, all old favorites.
The portfolio changes are as follows:
1 HDFC Bank Core Added
2 Indus Ind Bank Core no change
3 J&K Bank Core no change
4 Asian Paints Core added at 385
5 ITC Core added at 285, 290
6 Cera Core added at 456
7. Page Core no change
8 Astral Polytechnik Core No change
9. Bajaj Auto Core. Added at 1750, 1800
10. Hero Core No change
11. Eicher Motors Core added at 3050
12. Bosch Core added at 8100
13. Atul Auto Core added at 147
14. MRF Core. Added at 12800
15. Mayur Uniquoters Core no change
16. TV18 Core added at 17
17. Den Core Added at 147
18. Hathway Core. No change
19. Sun TV Trading. No change
20. M&M Finance Core. Added at 225, rural india doing well
21. Bajaj Finance Core. Added
Wockhardt Exit from core, sold most at 600, 525
22. Apollo Hospitals Core No change
23. Divis Laboratories Core No change
24. Wimplast Core no change
25. Supreme Industries Core No change
26. United Spirits Trading No change
27 Tata Global Core. No change
28. Bata Core. No change
Orbit exports. Booked profits, exited. Better opp elsewhere
29. Kaveri seeds. Core. Reduced at 1700 as euphoric state
30. Oracle Core No change
As orbit, Wockhardt are out of core and united spirits and sun remain trading positions, the no of core scrips is down to 28. Pvr and Cinemax enter into the list at 29 with a lower buying price but post run up a high weightage has caused their entry.
I intend to remove sun tv in this listing being a trading position and am contemplating making united spirits a core. Diageo integration seems on track and elections usually are a precursor to consumption.
Additions into core from money raised:
31. Bajaj corp. core. Rural idea play, brand extension
32. Repco finance. Core. Recommended at 163 on twitter and in earlier writings, the weightage is up now to core.
And a corrigenda here: I seem to have forgotten to include one of my fav scrips that I have been blogging on, tweeting and recommending when it was ex Satyam, Tech M. One of the highest weight ages. The very fact I forgot it shows it makes me sleep like a baby with peace. Continue to maintain a buy on it but post Infy results as not too sure of short term movements knowing how mobs behave.
Wish you all a good festive season and happy investing.