»5 Minute Wrap Up by Equitymaster

On This Day - 11 JANUARY 2019
3 Stocks in Super Investor Sumeet Nagar's Portfolio That You Can Buy Right Now

Radhika Pandit, Research Analyst

There is nothing as fascinating as following the stock picking strategies of some of India's biggest investors.

One such big investor who we like and follow is none other than Sumeet Nagar, co-founder of Malabar Investments LLC.

Malabar is an India-focused foreign portfolio investor (FPI) and specialises in value investing in small and mid-sized Indian stocks.

Here is Sumeet Nagar's investment philosophy, which he had outlined in a Forbes article:

  • Look for the highest quality mid and small companies - which have outstanding fundamentals, a terrific management team - these would be less volatile and less risky [to external shocks], than some blue-chip stocks.

In other words, he focuses on companies that...

  • Are leaders in niche industries.
  • Have a long history of excellent financials.
  • Are run by highly capable managers who have the best interests of shareholders in mind.
  • Have a sustainable competitive advantage, i.e. a moat.
  • Have demonstrated pricing power.
  • Have a long runway to grow profitably.

As you can see, Sumeet typically picks up companies for the same reasons we do: They have a sustainable advantage over their competition (i.e. moat), pricing power, a strong management at the helm, and a long history of robust financials.

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Indeed, many of his picks have done superbly well over the years. Most have been from the small-cap space and have gone on to become multibaggers. Page Industries, eClerx Services, Eicher Motors, and Avanti Feeds are some of his star performers.

Clearly, his moves are not to be missed.

Of the 13 stocks that we have recommended in Smart Money Secrets, Sumeet Nagar's Malabar Investments has a stake in around 5-6 of them.

Now here's something important, dear reader.

We have always pointed out that while super investors picking up stake in any company is a strong enough reason for us to consider that stock, it does not mean that we will blindly recommend them.

Ultimately, we have developed our very own Smart Money ScoreTM. It is a stringent process to filter only quality stocks.

So even if a super investor picks up a stake in any company, we will reject that stock if that stock does not pass our Smart Money ScoreTM.

Many of Sumeet Nagar's picks have passed this test.

So, it is hardly surprising, that among the list of 40 super investors whom we follow, he features near the top.

These are stocks of companies in sectors as diverse as manufacturing, pharmaceuticals, retail, IT, and commodities to name a few.

In Smart Money Secrets, we have recommended six stocks in which Sumeet Nagar's Malabar Investments has a stake.

And 3 of those stocks are a buy at today's prices.

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

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Chart of the Day

Here is one of the stocks in Sumeet Nagar's portfolio whose financials over the last ten years have been impeccable.

This company is a major supplier in the footwear industry. Apart from that, this company's products now cater to a variety of applications including upholstery, furnishing, apparel, and automotive.

A Stock with Robust Financials in Nagar's Portfolio

It has always stayed ahead of the industry in terms of exploring new avenues of business, product innovations and even profitability.

All this gave us confidence to recommend this stock for the long-term.

Warm regards,

Radhika Pandit
Radhika Pandit (Research Analyst)
Co-Editor, Smart Money Secrets

PS: Radhika Pandit and Sarvajeet Bodas, co-editors of Smart Money Secrets, have just recommended their first stock. If you haven't subscribed to Smart Money Secrets yet... you can do so here.

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