Investment_ Manappuram Finance
Updated
Namaste!
Manappuram Finance is in the same type of business as Muthoot Finance. Both the stocks have corrected >40% from all time highs. I think it is a good time to invest in Manappuram Finance considering following questions:-
Q: What is the good price to accumulate this stock?
A: Don’t invest more than 05-10% of your portfolio in this stock. Rs 95-97 is a good price to accumulate this stock.
Q. What are the strengths in this stock?
A:
1. It has a weekly trendline support at near Rs 95-96 levels.
2. It will be available at 6 P/E which looks attractive as it is below 10 and 6 P/E is a kind of very good support because every time it does bounce-up from 6 P/E (Jan 2009, Sep 2015, Apr 2020, Etc).
3. It’s in the business of gold loan which is kind of stable because it offers a secured loan by taking the gold as collateral. Gold is liquid and could be sold if the borrower doesn’t pay-back. It’s safer and more liquid than properties (mortgage) loans provided by other banks/NBFCs. Gold prices sometimes move in cycles, which affects the company's short term risk though.
4. It has a current dividend yield of 2.59%.
5. Most of the time fundamentals “confuse me” so I don’t dig deep into it. I do not value any company after reading the annual report, balance sheet, blah-blah-blah. I pay attention to EPS, P/E, Correction in stock prices (trendline support), rarely Debt to equity that’s it. I don’t advise this to anyone because it may prove risky for a naïve or sometimes even a seasoned investor. I know and understand some of the key figures in the books of accounts but don’t dig deep into it. We can not predict the future of the company and/or know what’s happening inside the company. What we can do is DIVERSIFY, and have a contrarian approach with caution and margin of safety.
Q. What changed my mind to invest now rather than wait for a big correction to buy at a cheaper rate, considering my opinion of an overvalued market, strength of the economy and rising interest rates?
A: I posted many articles based on my understanding saying “is the market getting ready for a free-fall; …correction of more than 30% from all time highs, etc".
I posted those to caution people and gave them opinions to get ready for a panic or downfall in the stock markets.
It's always better to get ready for various scenarios early and make plans for them, which will guide us throughout the "fear and greed cycle of the markets".
Disclaimer: The analysis I have shared is based on my understanding and experience in the markets. Investment and/or trading in the market does not guarantee a fixed return and may result in a financial loss. Please do your own analysis and/or consult your financial advisor before investing and/or trading.
Manappuram Finance is in the same type of business as Muthoot Finance. Both the stocks have corrected >40% from all time highs. I think it is a good time to invest in Manappuram Finance considering following questions:-
Q: What is the good price to accumulate this stock?
A: Don’t invest more than 05-10% of your portfolio in this stock. Rs 95-97 is a good price to accumulate this stock.
Q. What are the strengths in this stock?
A:
1. It has a weekly trendline support at near Rs 95-96 levels.
2. It will be available at 6 P/E which looks attractive as it is below 10 and 6 P/E is a kind of very good support because every time it does bounce-up from 6 P/E (Jan 2009, Sep 2015, Apr 2020, Etc).
3. It’s in the business of gold loan which is kind of stable because it offers a secured loan by taking the gold as collateral. Gold is liquid and could be sold if the borrower doesn’t pay-back. It’s safer and more liquid than properties (mortgage) loans provided by other banks/NBFCs. Gold prices sometimes move in cycles, which affects the company's short term risk though.
4. It has a current dividend yield of 2.59%.
5. Most of the time fundamentals “confuse me” so I don’t dig deep into it. I do not value any company after reading the annual report, balance sheet, blah-blah-blah. I pay attention to EPS, P/E, Correction in stock prices (trendline support), rarely Debt to equity that’s it. I don’t advise this to anyone because it may prove risky for a naïve or sometimes even a seasoned investor. I know and understand some of the key figures in the books of accounts but don’t dig deep into it. We can not predict the future of the company and/or know what’s happening inside the company. What we can do is DIVERSIFY, and have a contrarian approach with caution and margin of safety.
Q. What changed my mind to invest now rather than wait for a big correction to buy at a cheaper rate, considering my opinion of an overvalued market, strength of the economy and rising interest rates?
A: I posted many articles based on my understanding saying “is the market getting ready for a free-fall; …correction of more than 30% from all time highs, etc".
I posted those to caution people and gave them opinions to get ready for a panic or downfall in the stock markets.
It's always better to get ready for various scenarios early and make plans for them, which will guide us throughout the "fear and greed cycle of the markets".
Disclaimer: The analysis I have shared is based on my understanding and experience in the markets. Investment and/or trading in the market does not guarantee a fixed return and may result in a financial loss. Please do your own analysis and/or consult your financial advisor before investing and/or trading.
Note
I am planning to buy 5% of my portfolio at Rs 96. But there is a result for the 4th qtr in some days. I have to evaluate, if the P/E is favorable after the results.Note
P/E is still favorable (6.35) after quarterly results. The chart looks weak on weekly as well as daily timeframe, meaning there is a higher probability I can see my entry level of Rs 96.Note
I am still hopeful of Rs 96 price. FII's are buying whatever they are getting at cheap price (low P/E stocks). They are one of the reasons which took Nifty to all time highs.Note
It is taking longer than expected time to reach Rs 96. But, I will wait.Note
I expect anyone who is reading my writings to know that there is nothing "certain" in the markets. Neither the %gain on stock nor "out-performance" or "under-performance". There is a risk and opportunity cost involved in both, buying and selling. Selling at any price can often result in "opportunity loss" when the stock moves higher and higher. Human psychology is a culprit here. For e.g. I post any stock which seems undervalued or overvalued to me on tradingview. When anyone makes money on that, they wont appreciate me "a single word". But when they lose or it results in opportunity loss, they are bound to blame me. I don't criticize any person, because I know their psychology has defeated them. At last, there is nothing like "easy money" in the markets. The survival of the fittest holds absolutely true here.
Disclaimer
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