»5 Minute Wrap Up by Equitymaster

On This Day - 10 AUGUST 2018
On the Road to Find This Month's Smart Money Secrets Recommendation

Kunal Thanvi, Research analyst

Last week was quite hectic.

As a general practice Sarvajeet and I love to attend Annual General Meetings (AGMs).

It not only helps us interact with managements but in some cases with fellow shareholders.

Last week we attended quite a few such meetings.

We went to a city in the south for our first meeting. We had recommended this company to our Smart Money Secrets subscribers in July 2017.

It has been in business since 1998 and promoted by a reputed group. The promoters are continuously increasing their stake in the company.

The numbers for the last three quarters are impressive. We believe, the upside in the stock is 50% from current levels.

Some of the best super investors from my list are holding this stock. In fact, two of them have increased their stake last year.

Since, the management doesn't meet analysts, we got the opportunity to ask questions at the AGM.

Annual General Meetings - The Best Time to Meet Companies

They answered all our questions.

They entered a new segment few years ago, which has 4 times higher margins compared to the core business.

--- Advertisement ---
A Profit Of 11.92% In Just 6 Days...and 3 More Opportunities Are Waiting For You!

Yesterday Apurva closed the trade in Aarti Industries, booking a profit of 11.92% in just 6 days. A fantastic return for those who managed to get in.

But if you missed out on it, you'll be happy to know there are 3 more such opportunities waiting for you

Yes! These are all fundamentally strong companies that are also technically sound right now. However, these companies do not remain a BUY for very long.

So hurry! Click here to get the full details right away…

The management believes, the contribution to sales from this new segment could double in next two to three years.

Now, if that happens, the stock price will most likely soar.

The meeting helped boost our conviction about the business.

Our meeting ended at 2:30 and we had our flight to a city in Gujarat at 4:30.

We rushed to the airport and almost missed the flight. The next day we were up for the meeting. This company is on our shortlist. We could recommend it if it ticks all the boxes.

We've been tracking it for a while. It has always been expensive - given the quality of business and the national brand it commands.

However, it has corrected more than 50% from its peak recently. The management seldom meets, so we attended the AGM in a remote city in Gujarat.

While it competes with some of the well-known brands in the country, it has the best margins and profitably in the industry.

Will this company make it as a Smart Money Secrets recommendation?

We'll run it through our Smart Money Score. It needs to pass that test first. Stay tuned...

Sarvajeet and I have a long list of companies that we plan to meet in the next two months.

I am excited and think these meetings can throw up some great opportunities for my subscribers.

If you haven't signed up for Smart Money Secrets, you can do so here...

Chart of the Day

Talking about brands, there is a huge difference between a strong brand and a weak brand.

A strong brand commands pricing power and is a leader in the industry in terms of profitability.

A weak brand is often not a leader in terms of profitability.

The basic difference is - 'Pricing Power'.

To Identify Pricing Power, Compare Companies Like This

The company we met recently in Gujarat is the second largest player in terms of revenue. However, in terms of profitability it is the market leader.

The reason is quite simple. The brand recall for this company is very strong in regions of Gujarat and Rajasthan, which has helped it to command a strong 'Pricing Power'.

This pricing power along with the increased efficiencies in the operations (owing to scale), has helped the company to command industry best operating margins.

We at Smart Money Secrets and the super investors we track are always on the lookout for companies with economic moats. And the first tenet of a moat is - Pricing Power.


Kunal Thanvi
Kunal Thanvi (Research Analyst)
Editor, Smart Money Secrets

PS: Kunal Thanvi is the Sherlock Holmes of investing. He is on a mission to reveal the top picks of India's best investors to you. For clean, high quality stocks that won't put your wealth in peril, subscribe to Kunal's Smart Money Secrets.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.

Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement

Disclosure & Disclaimer: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. The Author does not hold any shares in the company/ies discussed in this document. Equitymaster may hold shares in the company/ies discussed in this document under any of its other services.

This document is confidential and is supplied to you for information purposes only. It should not (directly or indirectly) be reproduced, further distributed to any person or published, in whole or in part, for any purpose whatsoever, without the consent of Equitymaster.

This document is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity, who is a citizen or resident or located in any locality, state, country or other jurisdiction, where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject Equitymaster or its affiliates to any registration or licensing requirement within such jurisdiction. If this document is sent or has reached any individual in such country, especially, USA, Canada or the European Union countries, the same may be ignored.

This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Our research recommendations are general in nature and available electronically to all kind of subscribers irrespective of subscribers' investment objectives and financial situation/risk profile. Before acting on any recommendation in this document, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the securities referred to in this material and the income from them may go down as well as up, and subscribers may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. Information herein is believed to be reliable but Equitymaster and its affiliates do not warrant its completeness or accuracy. The views/opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. This document should not be construed as an offer to sell or solicitation of an offer to buy any security or asset in any jurisdiction. Equitymaster and its affiliates, its directors, analyst and employees will not be responsible for any loss or liability incurred to any person as a consequence of his or any other person on his behalf taking any decisions based on this document.

As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst) 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407