Dolly Khanna Turns Bearish on these 3 Stocks. Do You Own Them?

Observing the buying and selling activity of top investing gurus helps an investor make an informed choice.

We don't mean you should totally copy their portfolio and base your investing decisions based on their activity. But you should keep track as it helps in understanding what the big names are up to.

In today's article, we take a look at three stocks recently sold by Dolly Khanna.

Who is Dolly Khanna?

Dolly Khanna is a Chennai-based investor, who is known for picking lesser-known midcaps and smallcaps. She has been investing in stocks since 1996.

Dolly Khanna's portfolio, which is managed by her husband Rajiv Khanna, is usually inclined towards more conventional stocks in manufacturing, textile, chemical, and sugar stocks.

In the most recent December 2022 quarter, she sold stake in these three companies.

#1 Chennai Petroleum Corporation

Chennai Petroleum Corporation (CPCL) formerly known as Madras Refineries is a subsidiary of Indian Oil Corporation (IOC) which is under the ownership of Ministry of Petroleum and the government of India.

As of September 2022, Khanna's stake in the company stood at 2.57%. In the quarter that ended December 2022, she reduced her stake to 2.2%.

She now holds 32.7 million (m) shares as of December 2022.

While we don't know why Khanna sold shares of Chennai Petroleum, there are some reasons that we can guess...

All refinery stocks have lost their charm as crude oil prices have fallen. Lately, weak economic data combined with rising interest rates have caused oil prices to slump.

Markets are worried that a recession, along with falling crude oil prices could take a hit on the profit margins of oil companies.

How shares of Chennai Petroleum have performed recently

Over the last one month, the share price of Chennai Petroleum has gained 4%.

In the past three years, the stock has gained 56%.

The company touched its 52-week high of Rs 417.9 on 08 June 2022 and its 52-week low of Rs 94.6 on 24 February 2022.

#2 Deepak Spinners

Deepak Spinners (DSL), located in Chandigarh, is a well-established name in the textile industry. Under the dynamic leadership of its Chairman, Mr. P. K. Daga the Company has evolved into a leading manufacturer of dyed synthetic yarn.

As of September 2022, her stake in the company stood at 1.21%. In the quarter that ended December 2022, she reduced her stake to 1.16%. Now she holds 86,763 shares.

Here are some reasons that we can guess why she turned bearish on the company...

In 2022, cotton prices rose around 30% because of increased freight expenses and higher inflation. Revenue and margins dipped for Indian spinners amid the macro headwinds.

2022 was a bumpy year for cotton spinners. Between April and August 2022, India's cotton yarn export volume plunged 58% year-on-year. These companies' plants were underutilised by almost 25%. Spinners had to even shut operations on some days in the first half of financial year 2023.

Due to rising input prices Indian cotton spinners lost their foothold in international markets because of uncompetitive prices. Indian cotton is the most expensive and they are losing to competition from Vietnam and Indonesia.

How shares of Deepak Spinners have performed recently

Over the last one month, the share price of Deepak Spinners has lost 1%. In the past three years, the stock has given multibagger returns of 208%.

The company touched its 52-week high of Rs 385 on 18 January 2022 and its 52-week low of Rs 197.2 on 20 June 2022.

#3 Nitin Spinners

Nitin Spinners was incorporated in 1992 in Bhilwara with a small capacity of only 384 rotors.

Over the years the company has expanded its operations to include open-end yarns, ring-spun yarns, blended yarns, knitted fabrics, and finished woven fabrics.

As of September 2022, her stake in the company stood at 1.52%. In the quarter that ended December 2022, she has reduced her stake to 1.39%.

Now she holds 7.8 lakh shares.

We believe that she might have sold shares of Nitin Spinners for the same reasons she sold Deepak Spinners.

How shares of Nitin Spinners have performed recently

Over the last one month, the share price of Nitin Spinners has gained 9%. In the past three years, the stock has given multibagger returns of 309%.

The company touched its 52-week high of Rs 345.8 on 08 February 2022 and its 52-week low of Rs 182.1 on 20 June 2022.

Investment Takeaway

Important to note that tracking a guru's portfolio is a good strategy but replicating their investments without understanding the risks, can be risky.

Investors need to carefully look into the facts of the company before making an investment decision.

One can only track these trading activities once the quarter is over, and by then, many things might have changed.

Investing in a fundamentally strong company should be the ultimate focus of investors.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...