In Students special of ‘Your Stocks’, Investment Advisor SP Tulsian gives fundamental view on queries; Sanjeev Agarwal, MD, dynamixresearch.com gives technical view and Monika Halan, CFP and Consulting Editor, Mint answers personal finance related queries...
Q: I have 15 shares of RIL at Rs 1,077. What's the target price to watch? How long should I hold on? Have a corpus of Rs 50,000 to invest, where do I invest?
Tulsian: It reminds me of my olden days, when how I started. At that time I use to make applications in the IPOs (initial public offering) and whatever profits use to get rotated in the IPO because that was, at that time, very paying proposition. So now obviously the IPO market is not very active, you don’t see the administered price mechanism or the control price mechanism, so you don’t get that kind of profit. So the next alternative for the student is to make investments in the front liner, in the blue chips, the companies which can really grow for the next eight-ten years or which are likely to remain in the field with the same size at least for next eight-ten years. If that theme is I think followed by any student or any young person, he will definitely be making money.
Taking that as a theme Reliance Industries perfectly fits in that, Larsen and Toubro perfectly fits in that. But honestly I won’t be going by KRBL because these are the small caps stocks very seasonal kind of thing and very erratic working and erratic kind of profitability and all sorts of things. So may be in this range my advice is to select the long-term growth oriented stocks, which could be in the banking space, which could be in the metal space, which could in the refinery, construction, infrastructure and all that.
So, yes, the additional amount which she has of about Rs 50,000 can either get deployed in the Reliance Industries or may be to give some indications like IDFC, like SBI to broad base the portfolio because your entire holding should not be concentrated in one sector or in one company. So have a portfolio of at least five companies, never mind even if it is an allocation of Rs 10,000 because that is how you can really grow. So RIL is definitely fitting stock in that category.
See student should first concentrate on their study, they should not bother too much for the day to day volatility and all that. So as I said that may be couple of years must be your view. You take a view after couple of years and may be take a review at that point of time. Otherwise at least two to three years should be the horizon.
Q: My time horizon is two-three years, can I enter JSW Energy at current levels?
Tulsian: People infact say see the present avatar of any company, but they have forgotten that even the JSW Steel has passed through that bad phase. If you recall Jindal Vijaynagar Steel, was merged with Jindal Iron and Steel and that’s how you have seen this new avatar of JSW Steel. We shouldn’t not forget that Jindal Vijaynagar, at one time, was ruling at 50% of its face value.
JSW Energy is a very excellent company, they went public may be some six months back at Rs 100 per share. We have been seeing now that it is ruling now at Rs 120. Presently they are on with 1000 megawatt of capacity. Infact they are holding some of the shares also, about 70 lakh shares of JSW Steel also along with them. But the ultimate target of JSW Energy is to set up the power plant of 10000 megawatt over net three-five years.
The kind of growth plans they have and the kind of financial structuring they have for the whole company, I am very much convinced with the stock, we wish that it becomes JSW Steel. The stock is capable to give a 20% annualised return and believe me if you can earn 20% annualized return and compound that you can give a very good return. May be if you compound it over six-eight years time, probably you will find a price of may be Rs 300 – Rs 400. I advice that since you have a horizon of three years, my advice is that JSW is almost ruling at its bottom, we have seen the stock moving up to Rs 130- Rs 132 in last month. But considering the results, considering the growth plan, promoters’ background, this is an ideal stock to have in students portfolio with two to three years horizon.
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https://www.moneycontrol.com/news/market-outlook/long-term-investment-tips-for-students_457961.html
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