🧵Patterns to spot winning stocks
July Last year I saw, this amazing presentation by @prabhakarkudva . Practicing these patterns & was able to identify winners Bigbloc, XPRO. has given more than 3x in < 1.5 years. Trying to list my learnings
@MashraniVivek
indianinvestingconclave.com
July Last year I saw, this amazing presentation by @prabhakarkudva . Practicing these patterns & was able to identify winners Bigbloc, XPRO. has given more than 3x in < 1.5 years. Trying to list my learnings
@MashraniVivek
indianinvestingconclave.com
✅Why patterns?
-Tells the probability of happening specific event again
-Gives reason why to buy & hence why to sell
-Once Pattern Identified, do deeper research like, ROCE expansion, accelerated growth etc.
- Best Way to find using 52-week scanner
- Look for pattern overlap
-Tells the probability of happening specific event again
-Gives reason why to buy & hence why to sell
-Once Pattern Identified, do deeper research like, ROCE expansion, accelerated growth etc.
- Best Way to find using 52-week scanner
- Look for pattern overlap
✅Pattern 1- Sector of the Cycle
-Every bull run has favorite sector leading
-2020- Now – Chemicals, Auto anc. & Capital goods
🖍️How to Identify companies
-High Sales & Profit growth
-Margin Expansion
-PE>2-3x market
-Earning Visibility for next 2-3 years
-Chart – Step Patterns
-Every bull run has favorite sector leading
-2020- Now – Chemicals, Auto anc. & Capital goods
🖍️How to Identify companies
-High Sales & Profit growth
-Margin Expansion
-PE>2-3x market
-Earning Visibility for next 2-3 years
-Chart – Step Patterns
Risk
-If late in the game
-Not for Buy and hold forever. SELL IS MUST
-Stay only when Margin expanding
-Never Participate when it’s going down
-Average Down
-If late in the game
-Not for Buy and hold forever. SELL IS MUST
-Stay only when Margin expanding
-Never Participate when it’s going down
-Average Down
✅Pattern 2-
PEAD-
-Earning makes the price to move
-PE Expansion happens
-Acceleration must be on Multiple Quarters
-Work well in Small & midcap
Key Elements are
-Surprise
-Acceleration- Higher the better
-Not Crowded
Eg: Bigbloc - In 2 week, stock moved 100% post Earning
PEAD-
-Earning makes the price to move
-PE Expansion happens
-Acceleration must be on Multiple Quarters
-Work well in Small & midcap
Key Elements are
-Surprise
-Acceleration- Higher the better
-Not Crowded
Eg: Bigbloc - In 2 week, stock moved 100% post Earning
✅Pattern 3 - Debt reduction & Margin expansion
-Causes jump in EPS esp in case of high leveraged companies
-Substantial Debt Reduction
-Across Quarters
-Strengthen the Balance sheet
-PE Expansion happens
Ex: XPRO
Lethal Combo of Margin,return Expansion along with Debt reduction
-Causes jump in EPS esp in case of high leveraged companies
-Substantial Debt Reduction
-Across Quarters
-Strengthen the Balance sheet
-PE Expansion happens
Ex: XPRO
Lethal Combo of Margin,return Expansion along with Debt reduction
✅Pattern 4 - Quality Companies or Compunders
-Everyone knows about this companies
-Sector leading compounding Business
-Endured Multiple cycles
-Proven Management with Excellent Track record
-Accumulate when general market corrects
-Eg:Infosys, Bajaj Finance, Asian Paints,Titan
-Everyone knows about this companies
-Sector leading compounding Business
-Endured Multiple cycles
-Proven Management with Excellent Track record
-Accumulate when general market corrects
-Eg:Infosys, Bajaj Finance, Asian Paints,Titan
✅Pattern 5- Special Situation
Change in Management
- CG power, Apollo Tricoat
Demergers- Kamdhenu, Jubilant ingrevia
- opportunity arises when a small-size company demerged from a large-size parent
-Forced Selling Happens
- Parent & spin off both must be analyzed
Eg: Tricoat
Change in Management
- CG power, Apollo Tricoat
Demergers- Kamdhenu, Jubilant ingrevia
- opportunity arises when a small-size company demerged from a large-size parent
-Forced Selling Happens
- Parent & spin off both must be analyzed
Eg: Tricoat
This Thread might not do the justice to the presentation given by him under @IIC_Conference & hence must watch to understand the concept in details.
indianinvestingconclave.com
Thanks!
indianinvestingconclave.com
Thanks!
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