Moneycontrol Pro Research — Winning ideas of the year gone by

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Dear Reader,

We are celebrating our second birthday amid the raging second wave of the pandemic with growing uncertainties and a barrage of questions in the minds of investors. However, as we look back at how we have navigated the tumultuous journey in the past one year, we have more than one reason to cheer.

The year has been unprecedented in human history, testing the grit and determination of mankind and the nerves of investors across the globe. Markets rose from the depths of despondency like a phoenix, and the irony was that more than the joy, each up-move was shrouded in disbelief.

Staying true to Warren Buffet’s advice, we were greedy while others were fearful and tried to make sense of the market’s collapse in March last year, drawing from the experiences of history. While the clamour in the midst of every crisis has been “this one is different”, the unparalleled monetary and fiscal actions globally gave us the confidence to suggest otherwise, and alert our investors on selective opportunities emanating early on.

The covid crisis led to tectonic shifts in the way we live and work with significant implications for investment. We kept our readers apprised of how the probable shift in the supply chain away from China would have investment implications for select Indian companies. We did a deep dive into the winners’ list from a sunrise sector, guided investors on how to invest in a bullish market amid a challenging macro environment, created a covid heat map and advised investors to buy sector leaders, as the big are only going to get bigger post covid. As our understanding of the pandemic and the global response to it grew, we stuck our neck out as early as June 2020 to forecast that a new bull market is underway and the metal sector could be a surprise winner.

When the strategists were busy guiding on market direction, some of the agile minds from our research team provided enough fodder for the policymakers in troubled times. While keeping ourselves busy in picking up winning ideas for our readers/investors, we were not oblivious of the burning issues in the mutual fund industry, the whispers in the market, the fallout of the border tension or how to position portfolios ahead of the US elections.

The year presented a once in a lifetime opportunity for investors to garner blue chips at a bargain at the peak of the market capitulation. Our team was ready with the “Diamond in the Dust” series to identify heavily dusted gems amid the steep correction and we recommended long-term winners of the likes of Axis Bank,  HDFC Bank, ICICI Bank,  Hero MotoCorp and Ashok Leyland. We also backed the leaders from the biggest post-covid winning sectors early, at relatively undemanding valuations,  like TCS, Infosys, Mindtree etc. and picked up potential winners from beaten down financials including marquee names like Kotak Bank, AU Small Finance Bank, Mas Financial. Companies trading at stressed valuations like Federal Bank and the CV financiers also caught our attention.

Our in depth financial sector coverage guided readers to the future direction of the sector. We picked up businesses for the risk averse and threw light on forgotten names that could be back in the limelight. We were also the first to argue, with extensive data analysis, why PSU bank divestment might find takers.

A unique skill of a stock picker is also to identify potential turnarounds and we did that correctly with quite a few names. Having said that, we also cautioned investors about businesses we were extremely wary of. For the very long-term investors, we presented a bouquet of stocks from written off sectors that have the fire power to survive the covid storm and grow.

However, as a team what is most heartening for us is to see our recommendations grow into multibaggers. While we humbly acknowledge that we got positive tailwinds from the market, nevertheless, the list looks formidable with Laurus Lab (return of 349 percent), Balaji Amines (304 percent), Tyche (232 percent), Sequent Scientific (214 percent), HIL (215 percent), Dixon (287 percent) and Indiamart (241 percent) all in less than a year, to name a few.

The performance of our coverage universe has emboldened us to look beyond comfort zones and spot completely undiscovered stocks in our Discovery Series, and readers should expect to see more winners from here.

For the momentum seeker, finding winners in our weekly tactical series continues and our team looks beyond the obvious to enlighten the discerning investor in the Learn series.

We also extensively covered most of the large IPOs. However, not being carried away by the euphoria, we told our readers what to buy, what to avoid and where to book gains.

As the saying goes, the proof of the pudding is in the eating, and we are gratified to report that our Diwali picks with a return of 36 percent have outperformed the Nifty return of 13 percent by a wide margin.

Did we not make any mistake? We did, in assuming a more protracted slowdown and greater dent on profitability, especially for smaller companies; and we did not see a second covid wave coming with this ferocity. However, as history suggests, this too shall pass and we shall partner you in every step of your investing journey in the coming year and navigate the uncertainties and come out winning. For the time being stay safe and healthy!

Regards

Moneycontrol Research Team