Dear Reader:
You probably already know that the safest way to make money from stocks is to invest in blue-chip companies.
But what if you wanted bigger returns... in comparatively less time... without compromising on safety?
You can find the answer to this very question below. And also get a special report consisting of 3 stocks that could DOUBLE your money if you invest in them right away.
But please note that this report will be available till 24th March only.
Warm regards,
Rahul Goel
CEO, Equitymaster.com
How to Build a Fortune With
Blue-Chip Stocks That
Don't Even Exist Yet!
While most people put their money in Blue-Chips
and hope they'll make something to show for it...
A group of investors are using a time-tested strategy
to snag the exact SAME stocks at 60-80% off
and make even bigger returns in the long run!
Keep reading to find out what this strategy is,
And how you too could use it to leave behind a
Legacy of blue-chip stocks you can be proud of...
Dear Reader,
It was the year 1993...
A US-based investment banking firm, as part of an important strategic decision, acquired a 13% stake in an under-subscribed Indian company at Rs 95 per share.
The company they invested in had a lot of potential, no doubt...
But even they might not have thought that the end result would exceed all their expectations, and make THIS decision "One of our best investment decisions in India!"
Today, this company is among the top 3 players in its industry.
Its client list just keeps growing year after year, with firms like Goldman Sachs, BT Group and BP among its main clients.
It has over 110,000 employees currently. And its sales and profits have multiplied 26 times and 22 times respectively over the last 10 years.
And today, this stock's price has gone up more than 1,400 times since 1993!
If you haven't guessed it already...
The company I'm talking about is none other than Infosys. And the investment banking firm that seized the opportunity to acquire it dirt-cheap was Morgan Stanley.
So why I am telling you this now?
To show you how sometimes even really good companies - possibly even blue-chips in the making - get ignored by the market.
And Infosys isn't a one-off case either. Just take a look at this table for a moment:
Change in share prices over the past 10 years | Company | 30-Oct-00 | 29-Oct-10 | Change | | Bharat Heavy Electricals Ltd. | 53.45 | 2,445.70 | 4,476% | | Axis Bank Ltd. | 38.25 | 1,466.65 | 3,734% | | Tata Power Co. Ltd. | 68.35 | 1,394.60 | 1,940% | | Sun Pharmaceutical Inds. Ltd. | 132.93 | 2,107.30 | 1,485% | | HDFC Bank Ltd. | 247.10 | 2,278.10 | 822% |
Like Infosys, these are some other companies which were overlooked by investors for many years. And now they have grown enormously, making HUGE profits for their long-time stock holders.
You're probably familiar with these companies as they are all reputable blue-chip companies now.
But at one time, they were all not as big and popular.
So you could have easily obtained them for much, MUCH less than they cost today. And by holding them for a slightly longer period, made much bigger returns too.
Now imagine investing early in good companies that have the potential to turn big in a few years, but haven't caught the fancy of most investors yet.
You could not only acquire the stocks at 60-80% off, but also make bigger returns than other investors when the market eventually realizes the stocks' true worth.
Yes, agreed that not every company will grow the same way as Infosys or one of the stocks above.
But if you choose carefully, a few years down the line, you can be proud of how you acquired some of the most enviable blue-chip stocks of that day for dirt-cheap.
So I ask you now...
How would you like to join us
in finding the next Infosys?
How would you like to identify and invest in the "Blue-chip Companies of Tomorrow" today itself, when most investors still haven't recognized their full potential?
Are you ready to put your money in extremely promising and safe, but not-yet-BIG companies, and give it time to grow?
Don't worry! This is not like investing in risky small caps...
The companies we're talking about have already passed that stage, are stable now, and scaling new heights with each passing year.
You only have to invest in them, and give them time to turn into blue-chips and make bigger returns for you.
If after 2 or 3 years, you decide that you just want to take the profits and leave, then you're free to do that too.
There's no obligation whatsoever to hold them for long periods. It's entirely up to you.
But the longer you hold them, the greater your returns from them could be.
If something like this appeals to you, you're going to like what we have to say...
You see, we offer a service that does exactly what we talked about till now -- notify you of companies which could turn into blue-chips in the years to come, and in the process make you a lot of money.
We have been offering this service for over five years now... and it has a spectacular track record - 7 out of every 10 stocks we've recommended through this service hit the mark.
An accuracy rate of 73.5%!
But don't just take my word for it. . .
Here are just 3 of our successful recommendations and the returns they made:
1) Kansai Nerolac:
It's amazing how much more time we spend on the roads today - driving and stuck in the traffic - than just a couple of years ago.
Clearly, the number of 2-wheelers, 4-wheelers, trucks and other commercial vehicles has ballooned in the recent years.
But while you and I may rue the traffic scenario today, there's one company which benefitted immensely from this development.
You see, much before the current auto boom kicked off in 2008, we began looking for new ways to play it besides investing in auto manufacturers.
It was then that we uncovered a midcap gem in the form of Kansai Nerolac.
Kansai Nerolac had been a strong player in the automotive paints segment. It was the primary supplier to passenger car leader Maruti Suzuki, commercial vehicles leader Tata Motors, Honda, Toyota, Volvo, Mitsubishi and even Bajaj Auto and TVS.
Plus, it also had the technical knowhow of its Japanese partner Kansai to bank on.
So we knew from the outset that this company would benefit greatly from the trend.
In addition, the company was also trying hard to establish itself in the decorative paints segment which had immense potential.
Hence we understood this stock was a "blue-chip in the making" and recommended it to our subscribers in October 2008.
The auto growth story and the demand for decorative paints continued, and with it the company's ascendancy on the price charts, enabling our subscribers to more than double their money in just 13 months.
2) Cadila Healthcare:
Picturize a company going from annual revenues of Rs 500 million to Rs 6,715 million... in just 6 years of operation!
Believe it or not, this is actually something that the US arm of Cadila Healthcare has been able to pull off.
And it did so by focusing more on niche products which would give it greater monopoly and ensure bigger revenues and profits in the long term.
We observed that Cadila Healthcare was now employing the same strategy in India also, and doing pretty well at it.
Sugar Free, Everyuth and Nutralite are just some of the products associated with this company which you might recognize instantly.
But what you probably didn't know is that the company launched 25 new products and over 30 line extensions during FY09.
The acquisition of niche businesses Carnation Foods, Recon Healthcare and German Remedies over the years further strengthened its position in India.
Cadila's niche-oriented approach, along with the fact that it was doing well overseas also, made it a strong candidate for being considered a "Blue-chip of Tomorrow."
So we recommended the stock in May 2009. And our subscribers more than doubled their money within a span of just 7 months.
3) Kajaria Ceramics:
Suppose a company is the second largest player in its industry... the largest exporter of its product in the country... and the demand for its product is growing by the day in India and internationally...
Wouldn't you expect it to at least double easily in the next 3-4 years?
Why just double? You'd expect it to do even better and turn blue-chip in a few years.
We recommended Kajaria Ceramics, a ceramic tile company, in November 2007 when the housing activity was on an upswing due to both increase in personal income levels and easier availability of home mortgage finance.
Kajaria was already one of the leaders in this industry, so it already had an advantage.
And we had faith in the company's long-term ability to further grow its profits on the back of its flexible approach, and a strong distribution network of 600 dealers across the country.
While the stock did waver initially due to fluctuations in the real estate sector, our faith paid off as the company nearly doubled in less than even two years. And today, the stock has returned 237% since we recommended it!
Introducing MidcapSelect:
The service behind these successful recommendations
And many others like these. . .
MidcapSelect, as the name implies, is our midcap stock recommendation service.
Through this service, we aim to notify you of good mid-sized companies that have the potential to turn into blue-chips in the future.
You see, the problem with the existing blue-chips is that even though they're stable and offer consistent dividends, the chance of making big returns from them consistently is less.
On the other hand, Smallcaps offer huge growth potential but there's enormous risk involved and a chance of losing money quickly.
So if you want to get the best of both worlds (good returns plus stability)... and if you like the idea of investing in future blue-chips early, then midcaps are what we recommend.
MidcapSelect tells you which mid-sized companies are a "must-have" for your portfolio... and more importantly, it tells you when is the right time to buy them.
Take Shriram Transport Finance for instance...
This was our yet another way of playing the entire auto industry story.
Shriram Transport Finance, is the only organized player offering finance for used trucks. We recommended this stock in September 2009 at a time when the demand for commercial vehicles was really down in the dumps.
But we believed that revival in demand will happen sooner or later and Shriram Transport Finance, with its strong asset recovery and loan valuation skills would comfortably be able to pass through the difficult phase without any major hiccups.
Besides, the market also tended to overlook the fact that the company was trying to make a big splash in some of the other areas of financing as well.
The expected revival in Commercial Vehicles did happen, in fact sooner than most of us would have expected, and our subscribers went away smiling with a near doubling of the stock price in a span of 10 months.
Here's what one of our MidcapSelect subscribers has to say...
"I am a subscriber to StockSelect, MidcapSelect & Hidden Treasure.
Equitymaster has really shown its skill in finding the PICKS much before others do.
I know that it is not so easy for an analyst to 'PICK UP' ahead of others always.
BUT YOUR RESULTS INDICATE THAT THE TEAM WORKS HARD."
-- Satya Pal Gupta, a MidcapSelect Subscriber since 2006 |
Why you can trust us to deliver. . .
You see, we're not stock brokers. We have nothing to gain even if you buy the stocks we recommend.
But our income... and our credibility... depend on whether or not the stocks we recommend make you money.
That's why we take extreme care while finalizing the stocks that we recommend. - All our recommendations are supported by thorough research; we list out the reasons to buy and also the investment concerns that we foresee
- We travel far and wide to meet companies before we put out reports on them
- For each stock, we clearly state the target price and also the time horizon for achieving the same
- We go to great lengths to ascertain the credibility of the management since quality of governance is an extremely vital issue (as was revealed by the recent corporate scandals)
This is exactly why nearly 835,000 registered members (of all Equitymaster services combined) trust us!
Coming to MidcapSelect, our midcap stock recommendation service...
Midcaps, as you know, are relatively under researched. There is an opportunity here, but at the same time there is a serious lack of credible information.
We want you to subscribe to MidcapSelect now so that you too can benefit from our comprehensive, time-tested research process for MidCaps.
We believe that our research, which is long-term in nature, will appeal to long-term investors like you.
"I love your MidcapSelect service which is analytical and rich in information and also prompt with respect to timing."
-- Vasant Mallya, a MidcapSelect subscriber since 2006 |
And did I tell you about the
Equitymaster Risk Matrix?
Most investors take the return on stock investment to be the key yardstick while deciding whether or not to buy a stock.
But legendary investors like Benjamin Graham and Warren Buffett have always maintained that 'evaluation of risks' should be given as much importance as 'estimation of returns'.
It is in this direction that our research team has developed the Equitymaster Risk Matrix or ERM which helps quantify the risk attached to a stock. The ERM is an integral part of our stock selection process.
Look, you probably understand that no two companies have the same degree of risk associated with them. Even if they operate in the same sector, their business dynamics, managements and valuations are different.
That's why it is important to evaluate the risk involved in each case separately... because at the end of the day it all comes down to how much price you are willing to pay for how much risk.
And the ERM is designed just for that!
The ERM is a matrix designed to evaluate the key risks attached to a business, its financial history and its management. It ranks not just the company but also the sector in which it operates based on its relative risk profile.
"First of all I would like to appreciate the stock selection mechanism of Equitymaster. I am a subscriber of Equitymaster since 2009. Also enjoying handsome returns since then.
I made this decision of joining Equitymaster in one of the tough phases in my life and fully got paid for the right decision.
I am happy investor and proud to be associated with Equitymaster. I encourage the large community of retail investors to join such an advisory services to be active participants in Indian Stock Markets and NOT to run after quick money."
-- Pankaj Deshkar, a subscriber since 2009 |
How the ERM made and saved
our subscribers money. . .
When markets were at their nervous best in late 2008, our Buy recommendations on Sintex, Yes Bank, VST Industries and Opto Circuits were backed by our confidence in the low to medium risk profile of these companies as shown by the ERM.
As expected, these stocks went on to multiply our subscribers' wealth several times. In fact, this is how these stocks performed since we recommended them:
| Company Name | Returns (%) | | Opto Circuits (India) Ltd. | 230.1% | | VST Industries | 187.3% | | Sintex Industries Ltd. | 176.5% | | Yes Bank Ltd. | 166.2% |
And it was THIS matrix that helped us by acting as one of the tools used for eliminating the bad stocks, so that we recommend only the good stocks to you.
But that's not all...
Again, it is the same ERM that we rely on to quantify the risks we believe subscribers need to be cautioned about while recommending a 'Sell'.
"In 2007, Equitymaster was probably the only research house which will give most of HOLD or SELL recommendations rather than BUY reports and everyone knows what happened after that. I feel to be proud subscriber of equitymaster seeing again that you still are not afraid of giving the right opinion irrespective of market moods. Great Job!!!"
-- Deepak Aggarwal, a subscriber since 2007 |
Given the complex operating environment that Indian business are aspiring to be a part of, we believe the ERM can offer immense value to investors seeking to maximize their long term returns by without taking on too much risk.
But that said, sometimes we make mistakes too. . .
Like I said before, MidcapSelect has a success rate of 73.5%.
That means for every 10 midcap stocks we have recommended through MidcapSelect, 7 hit their target.
So there are 3 midcap stocks out of every 10 that do not perform as expected.
Look, there's no doubt that we recommend a stock only when it meets all the required parameters.
But sometimes... despite having all those valid reasons for recommending the stocks... the assumptions we make turn out to be incorrect.
For example, here are 2 midcap stocks that didn't do like we expected them to...
1) Asahi India
We recommended Asahi India, a glass company, back in April 2006 when the Indian auto market was booming and also the market for architectural glass.
Asahi was the market leader in automotive glass business at the time, and it also had around 25% market share in the architectural glass business.
We expected the company's revenues to increase & the stock to perform well.
And the company's revenues did increase. But, the company took too much debt, its business became capital intensive and its pricing power decreased.
And all this led to an overall decline in the profitability of the company.
And the stock now trades at 45% lower than the price at which it was recommended.- A classic case of what would be seen as management's greed taking over rationality
2) Lakshmi Machine Works (LMW)
We recommended Lakshmi Machine Works, textile machinery manufacturing company, in Feb 2008.
LMW was one of the three leading textile machinery manufacturers in the whole world, and the leader in this industry in India.
Backed by strong fundamentals we expected the company to do well.
But we got the industry cycle wrong and the stock price took a knock.
The end result...
While the stock has recovered most of its losses today, it is still 10% below the target price that we had set for the company.
The truth is despite making all the efforts to be as accurate as possible, there will always be factors that we can't control.
But all said and done, you can rest assured that when you receive a research note from us, it is our honest opinion about the stock - based on certain time-tested criteria and assumptions.
So here's what all you get by subscribing to MidcapSelect. . .
26 Midcap Recommendations
Every alternate week, we send you a MidcapSelect report notifying you of an attractive Midcap opportunity.
In each report, we clearly give a recommendation and discuss the pros and cons of investing in that company at that point of time, hence enabling you to make an educated decision on it.
And the good thing is... while we strive to find new investment opportunities for you, we also do not hesitate to put out a SELL report just in case a stock is grossly overpriced.
So you get 2 MidcapSelect Buy/Sell/Hold recommendations every month. Plus, we also release special premium reports from time to time... as and when attractive opportunities show up.
And there's one other thing...
I bet you, like numerous other investors, were taken aback by the 'Satyam' fiasco and started wondering how many more companies of that sort are there in India that you don't know about.
Because we meet various companies face to face, do our due diligence and continuously track our recommendations... we reduce the risk of a "Satyam" like situation emerging in stocks that we recommend.
"I would want to acknowledge the fact that Equitymaster is ACTUALLY REALLY GENUINE in its research, SELFLESS and not giving recommendations with a HERD mentality !! Like some magazines and news channels do..."
-- Nishank Mehta, a subscriber since 2009 |
S-Features
These are special articles and reports available to our premium subscribers only.
We release over 800 of them every year.
You might understand that there are a lot of factors influencing the stock price, most of which need to be monitored regularly. So from time to time, we release instant reports and updates on various companies.
These articles include excerpts of management meetings, extracts of conference calls, updates on the happenings in a company and our personal views on it, and so on.
This is all "unadulterated" information and it will serve as a valuable input for your investment decision.
The Portfolio Tracker
Equitymaster's "intelligent" Portfolio Tracker will not only help you manage your portfolio efficiently, but also help you grow your wealth!
It's online, it's easy to use and is available to you 24 hrs a day.
Here are some of the amazing things you can do with this tool...
Track both- your mutual fund as well as equity portfolios in the same account ; Get automatic end-of-week and end-of-month performance updates and alerts for the stocks and funds that you own and even for those that you simply wish to track; Plus you will also get to track your SIPS and get NAV alerts for the mutual fund schemes
And what makes the Portfolio Tracker unique is the intelligent reports that come along with it. These reports will give you in-depth information about your portfolio as well as a detailed analysis to help you invest like a smart fund manager.
The Portfolio Tracker usually costs Rs 330 for a year. But by subscribing to MidcapSelect, you get it absolutely FREE.
"How to Plan Your Equity Portfolio":
Our Recently Released Asset Allocation Guide
Our experience shows that to lead a RICH and HAPPY life with the money you make from your stock investments, it's essential to allocate your investments properly... so that you can maximize your stock market returns but at the same time, keep the risk involved to a minimum.
So, based on your investor profile, this guide will help you understand how to distribute your investments between large, mid and small caps stock... apart from a lot of other things.
This guide, too, is available to you for FREE when you subscribe to MidcapSelect.
Free subscription to
The Daily Reckoning . . .
Are you interested in monitoring or even investing in the global markets?
Now you can read what knowledgeable investors across the globe read every single day for global market analysis and investment ideas.
Yes, we are delighted to bring you 'The Daily Reckoning', a daily financial e-column by Bill Bonner, Publisher and Editor, and three-time New York Times best-selling author.
As one reader put it, Bill "makes more sense in one e-mail than a month of CNBC".
The Daily Reckoning is published every day in 3 languages from offices in 6 countries - US, UK, Australia, France, Germany, South Africa.
Now, it's India's turn... and your turn to get it for FREE!
When you subscribe to MidcapSelect, you automatically get a free subscription to the Daily Reckoning also.
And I've saved the 2 best things for last. . .
1. Our latest Multibagger Midcaps report
It was on 28th March, 2009 that we released our first 'Multibagger Midcaps' report.
The report consisted of four stocks -- a truck financing company, a low-cost plastics company, a medical devices company and a mid-size bank -- which we predicted would rise by 100% in 3-4 years.
They doubled just like we said they would, but did not stop there. They went on to do even more!
Till date, the 4 stocks have risen by 327%, 85%, 220% and 469% respectively.
So if you had invested Rs 1 lakh each in the four stocks, you'd have Rs 15.01 lakhs in hand now.
Or simply put, you'd have converted every 1 lakh you invested into Rs 3.75 lakhs.
And now our brand new version of "Multibagger Midcaps" gives you details of 3 NEW midcap opportunities that could at least DOUBLE over the next 3 years.
In short, these new midcap opportunities include...
- A company whose main business is helping other companies, in multiple industries, cut costs and run their processes more efficiently
- An electrical company placed to benefit, at the same time, from two of the fastest growing segments in India right now i.e. power and personal consumption
- And a bank which, despite debuting on the bourses recently, is over 100 years old and has the potential to outdo larger peers
Subscribe to MidcapSelect through this offer, and you get the report absolutely free!
2. The BIG discount
You must be thinking all this is going to cost a lot. But no!
The usual price of MidcapSelect is Rs 5,000 per year, which is anyways not much for all of this.
But for the next 2 days, you can subscribe to MidcapSelect for just Rs 2,950, which is less than 60% of the full price.
And, you can sign up at this highly discount price and 'test-drive' MidcapSelect for a full 30 days.
If you don't like it, get in touch with us before the 31st day, and we'll refund the entire fee you paid. That's a promise!
But you must act quickly...
This offer will close on 24th March, at 5pm sharp. And after that, the price of MidcapSelect will also go back up to the usual Rs 5,000.
So to summarize, here's all you get by signing up to MidcapSelect... - 26 Buy/Hold/Sell recommendations (Investment horizon of 2-3 years)
- Subscription to MidcapSelect for just Rs 2,950 (usual price = Rs 5,000)
- The Latest Edition of "Multibagger Midcaps"
- Special Reports from time to time
- Quarterly reviews of all recommendations
- S Features
- Portfolio Tracker
- Special guide - "How to Plan Your Equity Portfolio"
- Free subscription to The Daily Reckoning
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Why delay any longer?
This offer will be open until 5pm, 24th March only, and we don't want you to miss out.
Sign up for MidcapSelect today.
Like I already told you...
This is a NO-RISK offer
You can try MidcapSelect without risk for 30 days.
During this one month, you will get two current issues of MidcapSelect, plus access to archives of ALL the previous issues.
After going through them, you should have a fairly good idea of whether MidcapSelect is for you or not.
If you don't like what you see, just let us know before the 31st day and we'll refund the FULL amount that you paid. No questions asked!
So don't forgo this opportunity.
Subscribe Now! Click here!
Yours sincerely,
Rahul Goel
Chief Executive Officer
Equitymaster.com
P.S.: You have two options - Put off subscribing to MidcapSelect for later, and pay Rs 5,000 when you do. Or get in now for just Rs 2,950!
P.P.S.: This offer will close at 5 PM on 24th March. And after that you will no longer get the Latest Edition of "Multibagger Midcaps" also.
P.P.P.S.: If you have any queries, please do not hesitate to contact us at +91-22-61434055 or Write in to us. We will be delighted to assist you!
Subscribe Now! |
| *Returns calculated as on 29th October, 2010 or on the date of Sell recommendation, whichever is applicable.
Please read the Terms of Use. To Unsubscribe, click here.
Equitymaster Agora Research Private Limited
103, Regent Chambers,
Above Status Restaurant,
Nariman Point, Mumbai - 400 021. India.
Telephone: 91-22-6143 4055
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