Individual Shareholding Increases in Downtrends–PC Jewellers , Vakrangee and Manpasand Beverages top the charts

We had written a note on how Retail Investors keep averaging stocks in this article on NooreshTech Blog

http://www.nooreshtech.co.in/2018/04/why-do-traders-go-bust-and-investors-get-lost.html

Look at this snippet from Kotak Institutional Research Report.

Almost all the stocks are in downtrends and have corrected more than 20% from their highs.

 

Page Industries – 90 PE is not expensive – Cartica Capital (Part 2)

In our last post we mentioned how Cartica Capital finds Page Ind. is reasonably valued at 90 PE

The interview was aired on 28th June 2018

Looking at the Shareholding pattern of Page Industries we came across that holding of Cartica Capital has come down from 8,62,721 shares to 6,84,058 shares  between March to June 2018. Price range of Page Ind. during same time was 21800 to 27800

Shareholding of Cartica in Page Ind. over last 3 years

Quarter No. of shares
June 2018 6,84,058
March 2018 8,62,721
September 2016 8,64,565
June 2016 8,69,465
September 2015 8,63,650

Price Chart of Page Ind

Page Industries–90 PE is not expensive–Cartica Capital

An interesting take from Cartica Capital which is the 2nd largest public shareholder in the stock after Nalanda.

Video Link – https://www.youtube.com/watch?v=BnoCjHHyjJU

Check 2.40 to 4.10 . The overall interview is also interesting.

You might want to read up on Modigliani Miller Model for valuation

Indag Rubber–Buys a Group Company – Electric Vehicles Ancillary–Sun Mobility–Diversification or Diworsification?

Intimation under Regulation 30 about investment upto Rs.14.50 crores (USD 2.1 million) by way of acquisition of 21,00,000 equity shares of USD 1 each of SUN Mobility Investor Ltd.(Jersey)

https://www.bseindia.com/xml-data/corpfiling/AttachHis/9942e6e3-ef09-4c96-ac6c-3ac533796c69.pdf

http://www.sunmobility.co.in/ 

Khemka group has indirect control and ownership.

Investment is being done at book value of USD 1 per share.

Although the total investment is only 14.5 cr as of now. Will this be a good diversification or diworsification ?

Disclosure – No Holdings. Not a recommendation.

Banks Strategy of Mutual Fund Distribution–Highly Biased ?

8 out of top 10 Mutual Fund Distributors by Commission are Banks. With more than 3200 cr of commission income in between them.

Strategy is Highly Biased ?

Bank Selling Strategy

State Bank of India makes 99% of its mutual fund commission income from distributing schemes of SBI Mutual Fund.

SBI seems to have picked up distributing mutual funds only in last 3 years.

In last 1 year commission income has gone up from 178.7 cr to 557.9 cr !!!

Year Commission Income 
2017-18 557.9
2016-17 178.7
2015-16 62.12
2014-15 69.38
2013-14 28.95
2012-13 36.43
2011-12 30.76
2010-11 37.64

ICICI Bank gets 73% of the mutual fund commission income from distributing ICICI Prudential Mutual Fund.

But ICICI Securities only gets 18.5% of the commission income by distribution of ICICI Pru MF. Is it because one cannot buy Regular Plans through ICICI Direct but account holders have a choice to select their own preferred AMC ?

ICICI Securities Limited 316.53 58.45 18.5

Source Links

AMFI commission Disclosures –

Websites of respective Mutual Funds

More than 800 Mutual Fund Distributors with Payouts of more than 1 cr in 2018

In the last few years Mutual Fund Distribution has picked up in a strong way.

The number of mutual fund distributors with a pay-out of 1 cr plus has almost gone up 3.5 times since 2011-2012.

Mutual Fund Commission

The top 20 distributors by commission paid

Top 20 MF Distributors

NJ IndiaInvest continues to be on top.

8 out of the top 10 distributors are Banks !!

Out of all the banks SBI has increased commission income to 557.9 cr from 178.7 cr last year.

Source Links

AMFI commission Disclosures –

Websites of Mutual Funds

Insider Trading Disclosures – Chambal,Man Infra, Chembond Chemicals etc

Some of the interesting Insider Trading Disclosures from 1st Jan to 31st March 2018.

Insider Trading Dislcosures Analyse India 

We keep looking at Insider Trading/Bulk Deals for looking at interesting action and not necessarily buy or sell because of Insider Trading.

Although Insiders buying in a bear market has helped us pick interesting names a few years back.

Disclosure – No views on any of the stocks above and no recommendation. Please do your own research.

 

Is Sun Pharma Checking In Unichem Laboratories ?

 

Unichem Labs Share Holding Pattern

Share holder Name Dec-17 Mar-18
  No of shares % holding No of shares % holding
Alrox Investment & Finance 1597763 1.76% 997437 1.42%
Airborne investment & Finance 1149452 1.26% 717568 1.02%
Family Investment Pvt Ltd 1438522 1.58% 898026 1.28%

 

Sun Pharma Share Holding Pattern

Share holder Name Mar-18
  No of shares % holding
Viditi Investment Pvt Ltd 200846362 8.37%
Family Investment Pvt Ltd 182437880 7.60%
Virtuous Finance Pvt Ltd 96851821 4.04%
Virtuous Share Investment Pvt Ltd 83751259 3.49%

Whats common between this entities : –

  1. The Companies Address of Alrox, Airborne & Family investment is same as Taro Pharmaceuticals India Pvt Ltd.
  2. The Director of Alrox Investment, Airborne Investment is the same of Virtuous Finance, Virtuous Share — Mr Dineshkumar Ramniklal Desai
  3. The Director of Family Investment Pvt Ltd & Viditi Investment is the same Mr. Milind Vijay Goradia

Midcap Funds Underperformed in 2017 because of Vakrangee Limited ?

 

“Mid cap category was the worst hit, with 62 per cent schemes underperforming. We had a total of 34 mid cap schemes in our list.”

From this Nov 2017 article.
//economictimes.indiatimes.com/articleshow/61736777.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

A lot of Midcap Mutual Funds underperformed the Benchmark – Nifty Midcap 100 in 2017.

One of the reasons was the huge move in Vakrangee Limited and a little bit of a outperformance move in Rajesh Exports. Both these companies have almost zero Mutual Fund Holdings . ( good to see such a boycott.)

But the index calculation does not care for valuations or any other governance concerns. Its a free float survivorship index. For example RCOM was the 7th Largest weight in Nifty in 2007 peak.

Stock Value – Dec 2016 Weights – Dec 2016 Value – Dec 2017 Weights – Dec 2017 Value – Feb 2018 Weights – Feb 2018 Returns Dec16 to Dec17
Rajesh Exports 462 1.18% 805 1.47% 837 1.52% 74.24%
Vakrangee 137 1.58% 421 3.47% 163 1.34% 207.30%
Nifty Midcap 100 4402   6697   6199   52.14%

Of the 52% return in 2017 almost at 3-4% impact came from Vakrangee !!!