Performance & Operational Updates on All 7 Blog Companies + 4 New Interesting Ideas
One of our ideas is an extremely small microcap with a legit business that we have studied + One of our blog companies did paisa double faster than Hera Pheri!
Performance + Operational Updates on All 7 Companies
Since the inception of our blog just a few months back we have tried to cut through the large universe of microcaps and smallcaps, handpicking seven promising companies. These selections do reflect 10+ years of our investing experience, process evolution, meticulous tracking & scuttlebutt. We write this post to share material updates as well as short term performance of the 7 companies. We are very well aware of the strong run & froth in the small / microcaps and also give credit to the markets for this performance.
1. Compounding when you do just one thing right (Aug-23):
In August 2023, we highlighted a lesser-known paper manufacturer, with a strong track record of super corporate governance, razor sharp focus on the paper business and a solid balance sheet. Since the time we wrote, the stock prices have witnessed remarkable growth of 40-50%. Given the upcoming capacity expansion this company continues to be a perfect combination of growth and safety.
2. An Infrastructure business as a Listed Startup (Aug-23):
Another gem unearthed was a high growth infrastructure business. They are involved in construction and repair of bridges, roads, and railway tracks This venture, too, experienced a commendable surge of 55-65%. The company recently received its single largest order ever and we do see this as a strong growth company.
3. Divergent Narratives, bounded by a common thread (Jul-23):
In July, we delved into two companies, A and B that are part of large corporate houses, have seen the entry of the next generation leaders in the business and are both holding companies with rich holdings as well as their own independent businesses. These businesses due to their holdings in other companies hold deep value and are seeing growth in their own businesses as well. Both companies' stocks have appreciated by 20% and 30% respectively.
4. A deep value fertilizer and chemical business (Jul-23):
Our exploration led us to a deep value fertilizer and chemical business, where government policies hinted at value unlocking through dividends and buybacks. This company also is a holding company along with its own business. Including dividends (the latest dividend being 5%+ of the Mcap!) the price has grown by an impressive 30% and still offers massive value.
5. A High Growth Potential AMC (Jul-23):
We wrote about a new but not-so new AMC business. Last few months they have made good progress on the product and distribution including the hiring of a CBO. The market has rewarded them accordingly with a 40-50% price increase in the stock. They are still a high risk high reward bet - the market, although large and growing, has become very competitive with new VC/PE backed players also being added into the fray alongside JIO-Blackrock. Captive distribution and Trust is the only real differentiation in the longer run.
6. Unearthing Potential in the Steel Industry (Jul-23):
This steel company piqued our interests when it was going under a turnaround, especially after a strategic move to sell non-core assets and address debt concerns. The stock price has grown by 90% since our investment.
Staying the Course Amidst Developments:
In our journey, significant tailwinds have shaped our investments in different ways.
The fertilizer and chemical business showcased promise as government policies hinted at value enhancement through dividends and buybacks. Meanwhile, the AMC business made strategic moves by hiring a new CEO, launching a new NFO and bolstering its distribution team. Conversely, an undervalued steel company faced challenges, with a lackluster last quarter but continued efforts to reduce debt.
If all 7 stocks above were equally invested, the portfolio would give a 45% return in a 3-4 month period. All stocks are buyable even today but in SIP Mode.
Currently, we are studying four interesting ideas:
A super micro cap NBFC owned & run by a prominent reputed Mumbai family with diversified business interests. It's the smallest market cap company we have studied with a legitimate business.
A floor and wall tile company, amidst substantial expansion, has captured our attention. They have a solid dealer / distributor reputation and displaying positive indicators such as debt reduction and promoter buying, this venture holds promise.
A midcap company in the renewable energy space going through management and structural changes.
A smallcap company in the Oil & Gas space where a significant field should start producing soon and materially change the P&L of the company.
Till next time!
We want to emphasize that this communication should not be misconstrued as a recommendation, as we are not SEBI RIAs. It is crucial for readers to conduct their own due diligence and exercise caution.
Therefore, we urge all readers to approach this opportunity with prudence and carefully consider the potential risks involved. While the prospects appear promising, it is essential to maintain a cautious approach and stay informed of the inherent dynamics of the industry.
Happy to chat and discuss this in detail
About Us -
Govind Shorewala - Entrepreneur (Mining, Textiles) & Investor (Private & Public Markets) → Reachout at: govind.shorewala@gmail.com
Aaroah Mittal - Early Stage VC → Reach out at: aaroah.m@people-group.com