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Premium: Top Performing Stocks in 2014 To Date

Deepak Shenoy5 min read
Quick Facts
What is "Premium: Top Performing Stocks in 2014 To Date" about?
What category is this article in?
Premium
Who wrote this article?
Deepak Shenoy, Capitalmind's research team.
When was this article published?
Published 5 March 2014.
How long does this article take to read?
5 min read
What does the "**Movers and Shakers**" section say?
It's now two months into 2014, and some stocks have gone all ballistic on us while we weren't atching. Here's a quick look at the biggest and smallest of them.
What does the "Midcaps" section say?
Midcaps are stocks with a market cap between 1000 and 10,000 cr. Here are the winners.
What does the "Small Caps" section say?
Stocks less than 1,000 cr. market cap have, as expected been the most volatile and show the biggest moves.
What does the "Additions to Capital Mind Portfolio" section say?
In general we wouldn't chase the movers. But the top stocks tend to go even higher. Of all the above stocks we like:
What does the "Disclaimer" section say?
Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.

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This is a post for Capital Mind Premium subscribers, sent on March 4, 2014.

Movers and Shakers

It’s now two months into 2014, and some stocks have gone all ballistic on us while we weren’t atching. Here’s a quick look at the biggest and smallest of them.

Note: we have a filter; that stocks should not be in the “illiquid” category and should, in our opinion, not be a manipulated penny stock. We will still miss some gems but when gems are plentiful, we won’t crib about completeness.

First, the large caps.

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Large Cap: Pharma Dominates

Like in 2013, Large cap movers have been largely pharma companies. Aurobindo Pharmaleads with a 35% gain, with Cadila Healthcare going for a 27% move. Torrent Pharma and Dr. Reddy’s have also done very well.

Motherson Sumi makes auto components - rear view mirrors. While the P/E is high, it’s been riding on strong results, growing profits 150% in the December quarter. The stock is up 31% in 2014.

IOC and **HPCL, **the public sector oil companies, seem to have rebounded after dramatic drops in the previous year. These aren’t exciting to invest in, because they are hugely impacted by political pressures. There is no point doing a detailed investigation because a random joker in Delhi will decide that they will bear the cost of some stupid subsidy and that’ll hit the stock hard.

Baba Kalyani’s Bharat Forge sneaks in (we cheated, it’s market cap is about 9,000 cr.) at +16.5%. The company is involved in metal manipulation of the literal kind, making metal components and infrastructure engineering parts. It’s just grown profits nearly 100% in the December quarter and has a P/E of 25.

Bharti Infratel gives some relief to Telecom as the only entry in that sector in the top list. A tower infrastructure company, Infratel is closing in on the post IPO 210 high after which it had dropped 40%.

Midcaps

Midcaps are stocks with a market cap between 1000 and 10,000 cr. Here are the winners.

Monsanto and Kaveri have risen as part of agriculture seeds plays. Monsanto got an okay on field trials of genetically modified (GM) crops. We know about Kaveri Seeds which has had awesome results.

Financial Technologies is up 81% in the year. It seems no one cares about the NSEL crisis anymore, and it’s apparent the top shots of FinTech will get away with not even a warning. But I believe this is short lived - the company has a large potential for a sudden down move on adverse news. The upside trigger is that they might be able to sell their stake in MCX soon.

Tata Elxsi is an export growth story and a big momentum play with an almost vertical chart. Valuations are high but this is a company that’s been down the last few years and is now catching up due to a better dollar rate than ever before.

Muthoot and Manappuram were beaten down last year after RBI slowed lending against gold. Now they’re recovering but still way below all time highs.

Shilpa Medicare is a pharma company and we’ve mentioned it earlier. It has low debt and seems to be growing really well.

Mayur Uniquoters makes coated textiles like auto and furniture covers, artificial leather and such. It’s pushed profits up about 25% and has a P/E of 20.

Ess Dee Aluminium provides packaging solutions. The financials aren’t quite attracive, with profits down 20% in the December quarter. The stock, though, is at an all time high and such a move is either manipulation or something big happening that we will know about later.

Small Caps

Stocks less than 1,000 cr. market cap have, as expected been the most volatile and show the biggest moves.

MPS Limited (used to be McMillan Publishing) seems to have done very well in its export sales in the last quarter.

Mahindra Ugine and Mahindra CIE (was Mahindra Forging) are going to merge. The stocks have rallied seriously, though the fundamentals don’t show outright buys. Their alliance with CIE (who’s now a part owner) is one of the reasons for bullishness, with potentially a big global move ahead.

Selan Exploration sees positive reports by many brokerages, and with a margin of 78% pre-tax, who wouldn’t like the stock? But revenues haven’t really grown that much and like all oil exploration, the company will need to find more oil and gas to benefit. The increase in gas prices from April should do it good.

Tata Sponge is a pretty good play on a very strong chart. The government was going to cancel coal blocks allocated to the sponge iron manufacturer, but put it on hold.

Datamatics and Nucleus Software ride the infotech wave, while Deepak Nitrite celebrates good results with a big expansion in capacity.

MBL Infra is, even after this move, a company with P/E of less than 4. It builds roads and has bagged a few large orders recently.

KRBL exports rice. Good yields and great export realization has helped it make good profits, with a 350% rise in the December quarter. The P/E is still under 5.

Additions to Capital Mind Portfolio

In general we wouldn’t chase the movers. But the top stocks tend to go even higher. Of all the above stocks we like:

  • Deepak Nitrite

  • KRBL

  • Shilpa Medicare

Of these, we’ll add Deepak Nitrite right now. We will consider adding the other two after analyzing other triggers. Here’s where we are today:

This is not too bad for a couple months, given that the portfolio started in mid-December 2013 (with only Strides). Strides and KPIT are longer term holds, but we’ll maintain that we don’t lose more than 20% on each of the above. We are likely to add about four more stocks.

Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.

Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.

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