Best Buys at Discounts!!

 Happy Diwali :)

Giving some quick commentary on some stocks that have posted good results. And, have also fallen from their top (1) Motilal Oswal - The stock's PE is reasonable - Excellent recent results - All time high profit and revenue numbers - Stock is around 10-15% fallen from its top - This is in an expanding industry, so might make sense to add: if you want exposure to brokerage firms (2) PNB - Stock has fallen 35-40% from its top - Revenue/profits numbers are good - The PE compared to its peers is still high, so I expect a slight correction from this point - (eg. BoB, Canara is at a better PE) - These types of stock you should only buy if they are at a massive discount (3) Manapuram Finance: - Stock has corrected by around 50% from top - All time high revenues/profits - RBI action on its gold lending business shook the price - But my estimate is: this problem should go away

(4) IDFC First Bank - The results are not as bad people are making it out to be - They have increased their provision requirement: - My assessment is they are trying to grow responsibly and manage systemic risk - This is not bad for long-term investors: it shows the firm is trying to lend responsibly (this is a good sign) - As a result of this: there is a revenue problem, not a profit problem - If in the next quarter they lower their provisioning requirement, the profits would automatically jump (5) Bandhan and Ujjivan - Record high profit and revenue numbers - Both firms trading at 50% discount from top - Risk: this is entire risky segment lending risk - But this is a cyclical industry: if you play for 4-5 year on these types of stock (and buy in a low cycle), you can expect a 25% CAGR Now here is what other folks don't tell: all the above 5 -6 business directly or indirectly will compete against Jio Fin Now there is no data out there But, as investors, we sometime go by our hunch as well My assessment is: Reliance's eventual goal is to become a bank. This as per current norms is not possible. But, rules are formed by rich guys. So for every 1Rs I am going to invest in above 5-6 businesses, I will invest 50 paise on Jio (more) Valuation wise: Jio doesn't make sense as of now.