Time to buy stocks says Porinju Veliyath

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Pee Vee
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Time to buy stocks says Porinju Veliyath

Post by Pee Vee » Tue Jul 10, 2018 8:14 pm

Tweet of Porinju Veliyath

Smart investors have started exploring values in the big-potential small & mid-cap space regardless of the challenging environment. Stock-picking without 'caps' is the best long-term strategy!



Article in ET about Porinju's advice:

Midcap and smallcap stocks have taken a heavy beating this calendar after a stellar run that lasted three years. As a result, the BSE Midcap and Smallcap indices have corrected up to 20 per cent from their respective all-time highs scaled in this past January.

Concerns over corporate governance issues in select companies, slower-than-expected earnings growth and valuation concerns have dented market sentiments in the second-rung stocks so far this year.

Market participants are now looking for value in quality midcaps as well as smallcaps after the recent correction.

But market veterans say market-cap is only a state of mind. Smart ones do not care about market-cap when they go about stock picking.

“Smart investors have started exploring value in the smallcap and midcap space, regardless of the challenging environment. Stock picking without any market-cap bias is the best long-term strategy,” ace investor Porinju Veliyath said in a tweet on Tuesday.

In a recent interview with ETNOW, Aashish Somaiyaa, Managing Director of Motilal Oswal AMC, said the brokerage has again started accepting money in the midcap PMS, as stock valuations have become relatively better than they were six months back.

Among the top losers in the midcap as well as smallcap segments, shares of Gitanjali GemsNSE -4.00 %, Vakrangee, Diamond Power Infrastructure, KSK EnergyNSE 2.70 % and KwalityNSE -4.10 % plunged over 80 per cent on a year-to-date (YTD) basis.

On the other hand, shares of Excel Industries, V-Mart Retail, Indiabulls Ventures, Merck and Firstsource Solutions jumped up to 103 per cent YTD.

Jimeet Modi, Founder & CEO of SAMCO Securities & StockNote, said, “Negative sentiments had whacked down smallcap and midcap shares by around 25-30 per cent and, in some cases, by almost 50 per cent. The herd mentality of the market has brought down even good quality smallcaps and midcaps to reasonable levels and they should be able to deliver higher returns.”

Benchmark equity indices are on their way to hit fresh all-time highs. The 30-share Sensex reclaimed the 36,000 mark, while the 50-share Nifty regained the 10,900 level in early trade on Tuesday.

The BSE Sensex and NSE Nifty scaled all-time highs of 36,443 and 11,171 on January 29, 2018.

“The risk-reward proposition is not good enough for investors to go overweight on midcaps at this point of time unless valuations come down further. Though midcaps have undergone good correction, I do not think they are better positioned than the largecaps,” Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life Insurance, said in an interaction with ETNow.

valuepicker
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Re: Time to buy stocks says Porinju Veliyath

Post by valuepicker » Tue Jul 10, 2018 10:29 pm

Porinju usually buys small cap and microcap. He has said that in April, May, June there are net positive flows in his PMS. Similarly many small cap funds say that SIPs for their funds in last 2-3 months have not reduced. FIIs don't touch Porinju small caps and microcap. In that case who has sold these stocks so that they are down by 50 percent since Jan 2018?
Is it all because of direct retail selloff or claims made by Porinju and MF managers are too good to be true?

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