List of good stocks - YouTube

Hi everyone. Welcome to today's video on today's video

we are going to speak about three specific stocks that are great stocks.

These three businesses have given massive returns to their stakeholders

and shareholders and these stocks are available at a decent ether price.

Right now.

This is not an investment advice, but I'm just trying to tell you that I am

an investor in these businesses so you could consider doing more due diligence

and start taking positions in these stocks accordingly.

Which three stocks you will learn through this video?

Please watch the video till the very end.

And also It will make me Super Super, super happy.

If you press the like button, It would mean a lot to me.

It would encourage me to make part two

of this video where I will talk about more so final thing.

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So let's get the video started and let me

first and foremost, begin with the story of Asian paints.

This is a very recent episode, so you would all align with that.

Now let me take you to my screen and let

me show you something very interesting about Asian paints.

Now this is the daily chart for Asian paints.

And here you will see that in the week

of 14th October, just literally a month and a half back.

Asian paints fell by roughly 13% in a week.

And this was the period when Nifty was okay, Nifty was somewhat stabilized.

There was no massive problem with the Nifty per se.

Nifty is going down right now.

But during this time, Asian Paints was going down for some weird reason.

And what was the reason? The reason was that?

You know what? Some little thing has happened.

This happened, that happened.

And therefore a company like Asian Paint is just literally going to become dust

in the next one month and people started panic selling.

I started getting a lot of messages and I

shot a separate video saying that, you know what?

I'm going to be a buyer in Asian themes.

I purchased a lot of stocks here

and the stocks have actually gone up despite a falling Nifty.

Now the stocks are still in very much

dream, despite the Nifty falling a lot over the last few days.

The lesson from this story is fairly

simple that volatility is an opportunity to make money.

If you are invested in good stocks,

nothing bad will happen to good stocks in a volatile environment.

Right now the environment is very volatile so you must trade with caution.

I have made separate video on that where you should invest versus not.

But let me take you through some analysis of Nifty very, very quick analysis.

I've already jotted down some of the key points that I wanted to talk about.

Now, these different lines that you see,

these are the support levels for Nifty right now.

Now the first support we have already broken that.

So this was the first support.

You can see that there are multiple touch points on this line and we have broken

the support for Nifty and Nifty has already fallen quite a bit from its peak.

Right. So what is the total fall?

Let me just quickly take you through that. Right.

So what has been the total fall from the peak?

So the total fall right now where we are trading.

So Nifty has roughly fallen by seven and a half percent.

Right now. This is not a major sign to worry.

It just simply points to the fact that market has given a lot of run out.

It is starting to consolidate.

But since the Nifty has broken Its first key support level.

Let's look at what's going to happen next.

Right now, the second support level comes somewhere here and here.

If the Nifty touches this, there will be a fall of another 3%

and post that if the Nifty falls, there will be another fall of.

How much percent from the current level. Right.

So it will fall to roughly five and a half 6%.

That's the third level.

In case Nifty breaks this level of support, what is the fourth level?

The fourth level will be at eight and a half percent.

And finally, this is the final support level.

I don't think Nifty will fall below this.

And let me draw this out for you.

So from the current level, we might fall to this range.

Right. And this is like a 16% correction.

Further 16% correction. That might happen.

This is a very strong support for Nifty.

So what am I essentially saying?

I'm simply saying that right now,

if you are holding good stocks, let's say the total value is RS100.

These can at worst go to Rs80 analyzing the current economic scenario.

Now I am not a future forecaster.

I can't tell you whether the Nifty will break it's further support levels or not.

But in case it happens, if you see the entire Nifty falling

and your portfolio falling by 15%, both the places it is, okay.

It is just a normal correction.

Don't panic.

Very, very important.

Recently, two bouts have happened about

panic selling, one in the crypto market, one in the stock market.

Please do not panic sell.

You will lose a lot of your money.

That is the reason why I told the entire

story of Asian pains that good stocks recover.

And one optimistic viewpoint that I can

give you is this that no matter where the Nifty falls to.

So here we are sitting at the current level.

Let's assume that Nifty falls here.

I can guarantee this to you.

I can guarantee this to you that Nifty will make it speak again.

It might make it in one year.

It might make it in one and a half years.

It can make it in two years.

Okay, just not very comforting words,

but let's assume the absolute worst case scenario that Nifty falls a lot.

It falls by 30-40%.

Also, I can guarantee that for you

that Nifty is going to make its previous peak of approximately 18,300.

That will 100% happen.

And whenever Nifty climbs up again,

your good stocks in your portfolio are going to show a rise.

So in such a market, what you should do is

that you should start aggregating stocks that are very good.

They have been monopolies.

Buy them, hold them.

And whenever the Nifty corrects,

these stocks are the ones that are going to give you the most return.

So which three stocks am I Aggregating?

The first and foremost stock is GMM Pfaudler.

What does GMM Pfaudler do?

It is a monopoly, literally in the sense that it is supplying glass lining material

to Pharma industries to a bunch of pharma clients.

As the Pharma industry grows, GMM Pfaudler has to grow with it.

Now, why am I so bullish about the stock?

Look at the performance of the stock from March 2010 to now.

In March 2010, the sales was 194.

Now it is 1859.

That is ether last twelve month sales.

If you take a look at profits, nine crore profits.

Now it is at 64 crores .Last three years

have been very good for them both in terms of sales and profits.

If you check the pricing levels

of the stocks, you will see that this black line is the 200 day moving average

and the stock is currently trading roughly at its 200 day moving average.

So this is not a bad time to buy the stock.

What is the major problem that I see with the stock?

So there are two major problems that I see.

One is that the ROC ,return on capital employed is roughly 16%.

This is not bad.

They are breaking even in terms of the money that they are raising

from the market and investing and growing that money.

This is fine, especially for a growth company.

But this ROC needs to grow with time.

So that remains to be seen if the company can do it or not.

But for now, the sales numbers are very impressive.

Profit numbers are very impressive.

And overall, it's a good, solid, fundamentally sound stock.

There is absolutely no major problem with the stock per se.

Now, if we talk about why the business is

so strong, it's literally a monopoly business in the glass line equipment.

It has more than 50% market share, which is myself.

It has already built a lot of corporate

relationships with a bunch of Pharma industry clients, and they are unlikely

to switch because once you win a contract from a large Pharma client.

They stay with you for years because they are sure of your quality.

So they will do a lot of due diligence before entering into a contract with you.

But once they are sure about that quality,

the switching costs for these Pharma clients become really high.

So they tend to stay with the firm.

So therefore this year is going to stay intact for a substantial future.

Now, if you take a look at product price revenues, they are into proprietary

products which they are themselves manufacturing.

They do heavy engineering, they do glass lined products.

This is where the monopoly comes

from and they are a well diversified business in terms of the location

in India, their sales is 61% and rest of the world the sales is 38%.

Now the great thing that is happening in the Pharma industry,

especially for India, is that China has lost a lot of API sales to Europe and US.

Now India has started exporting a lot of API from India to US and Europe.

As a result, these European and US

clients, they have started trusting the Indian brands.

So the next leg of growth in this

development and this is where I am betting on GMM Pfaudler is that their sales might

increase outside India quite aggressively in the coming few years.

That needs to happen for this year to become rocket.

But right now also it's a decent stock.

Even with pure growth numbers.

It's justifiable to buy this stock.

So this is the first key stock.

If you want me to make a more detailed

analysis and compare it to some other stock, I'm happy to do it.

Let me know in the comments.

The second stock that I'm going to speak about is HDFC bank.

So first and foremost, let me take you through the buying range for HDFC bank.

If you take a look at it,

the stock is trading roughly at its 200 day moving average.

It's a great stock at one of the most profitable banks in India.

Now why am I so bullish about HDFC bank?

I had made a separate video on that.

But let me take you through some of the key points.

First and foremost, the balance sheet is extremely strong.

We have strong financing profit and it was the only bank.

Let me know if their are other banks or at least what I could find from my research.

Hdfc bank was the only bank during the

Covid time which had net positive financing profits.

What are the financing profit?

These are the financing profits.

If you check this for majority

of the other banks, it was a negative for HDFC bank.

This was positive despite COVID and COVID was probably the worst time for banks

because all the business activities stopped.

No one wanted loans, people were just depositing money

in the bank account and banks had to pay interest on that loan.

So as a result, financing profits became negative for the banks.

But HDFC bank was able to mitigate this situation.

Now this is just one part of the entire

narrative around HDFC bank that it is a great bank.

Great numbers, everything good.

But what is the winning recipe for HDFC bank?

So here we need to take a look at the history of HDFC bank a little bit.

If you try to understand why did HDFC bank grew so fast over the last 15 odd years?

One of the primary reasons for that was

that HDFC bank, despite all their issues with SMS services and Net banking,

they were the first bank that used Internet based core banking solutions

that made the transaction speed of their payments processing faster.

That made the deposit and withdrawal of checks faster across different cities.

That is what allowed them to win a lot of corporate lines.

Now why am I stressing on this part?

Because the next layer of growth that will

come from banking, especially for these top banks like ICICI,

HDFC, Kotak, it will come from you and I as customers interacting more and more

with the bank in terms of the products that they are selling us.

Why is this important?

Because you might have observed that you and I don't go to bank much.

Tell me the last time you would have

physically visited your bank, we don't do that much right.

For example, compared to our grandparents or parents, our parents and grandparents

used to go to bank almost every single week, but we hardly do it.

Maybe like once every two or three months we might do it.

This is a super interesting question for me.

So let me know in the comments, how many times do you visit your bank physically?

Point. I'm trying to drive home.

Is this that since we are not visiting our banks and banks are selling us more

and more products, what is it that they need to do really well?

They need to have number one excellent relationships with their customers.

Hdfc bank and ICICI bank and Kotak Bank are better in that sense.

Number two, they must understand ether,

tech play and integrate that into their banking services. Now this is slightly

more futuristic that how are they going to implement RPA robotic process

optimization to save on cost? How are they going to automate service queries? How are

they going to allow us to invest outside India at a much lower prices? Are they

going to adopt some decentralized finance systems?

All these involving a lot of tech or the next layer of tech?

So all the banks that are cash rich that have a vision that want

to aggressively grow would benefit from this change.

And this change is happening

in the banking industry as we speak next five years are going to be critical

because post covid whichever two, three banks are going to win this race,

they are going to be set for the next 15 years.

Another key change that is happening

in the banking industry is the availability of cheap credit.

If you take a look at the interest rates, the interest rates are close to zero.

0%. This is unprecedented.

This does not happen too often for such a long duration of time.

The interest rates have been low post 2008.

Now they are literally hitting zero Mark in developed economy.

What does this mean?

This means that banks are going to get access to cheap credit.

Now they might not pass on all the benefits to their customers.

For example, with the interest rates going

down, it's not as if the housing loan rates have come down proportionally.

So banks are going to make more profits from this entire equation.

And again it depends on their loan giving abilities.

Now HDFC bank is uniquely poised to give a lot of loans.

This is again reflected from their

positive financing profit in the 2020 testing times.

All these are subtle points.

You will not read this in a book or a newspaper.

So if you like the insights do press

the like button that will make me super happy.

But to cut the long story short, HDFC bank is still a pioneer.

It is still going to benefit a lot because it has very strong balance sheet.

It has the cash money vision,

prior history of accelerating growth and there is absolutely no reason why it

can't do it again and still be the leader for the next 15 years.

Now the third stock that I am super

bullish about is life insurance companies in general.

And I'm especially bullish about HDFC life

insurance company because it is a very clean group.

Right.

So let me first and foremost talk about the buying range for HDFC Life here you

can clearly see the 200 DMA and the stock is trading below its 200 DMA.

So great time to start aggregating the stock.

I'm definitely doing it.

I've already purchased.

I'm going to purchase even more.

So this is about the buying level and let

me give you some commentary in terms of its numbers and profit statements.

So let's look at the story.

From 2013 onwards sales were 14,000 Cr.

It has gone berserk right.

In the last seven years it has gone up manifold.

Right. So this is really amazing.

This has literally gone up by five times

in close to seven, eight years, which is really amazing.

Profits again have gone up by almost three X in the last seven or eight years.

Again, really good numbers.

Good, justifiable numbers that's 1 second.

Take a look at the nature of the product

and how people are grasping this product in current scenario.

What do I mean by that?

Let me help you understand this.

In 2020 alone.

Post Covid Four of my extended family members have taken life insurance.

They were not having life insurance

before, but now they have taken it because they realize the gravity of this entire

situation of life insurance, health insurance.

And they are considering these options more prominently.

There is an entire narrative that has changed around the healthcare systems

in India, people who are being coy about their health care options.

But 2020 has taught us we need to invest in our health.

We need to invest in purchasing a health insurance.

We need to have a life insurance because

life is very uncertain and this narrative is not going away.

Covid is edged in everyone's memory and having a health insurance and life

insurance and focusing on your health has become the priority for people.

So this was always an inelastic product, but now it has become even more inelastic.

Now what is the meaning of inelastic product?

Inelastic products simply means, for example, cigarette.

Now, cigarette is an inelastic product because once people get into the habit

of smoking, they have to smoke no matter what the price is.

It's very difficult to give up that habit

and very few people are able to successfully quit the habit of smoking.

So if you're a kid who is watching this,

don't smoke first and foremost. But on the flip side, if we talk about elastic

products, elastic product means that, for example, if you eat McDonald's ice

cream, now, if McDonald decides and you know what, we are going to increase our

ice cream prices by five X, then will you eat at McDonald's? No,

probably you'll go and eat at Baskin-Robbins

because products like ice cream has a very elastic demand.

So you don't need to stress too much about eating just at McDonald's,

you have 100 different options and you don't even probably need to eat it.

You can probably go and have a Rasgulla or a Rasmalai, right?

If you feel like having sweet.

So you have more options there.

But with cigarette highly inelastic demand, if you are a smoker,

then you have to have cigarette and you don't have any other option.

So the nature of the product of health insurance and life insurance is such right

now that it has become a highly inelastic product.

People cannot negotiate on it.

This is a A. B. The price rise is happening in the health care sector

in India and even the life insurance companies.

They are increasing their premiums by a lot.

I had spoken about it separately on another video, but very shortly,

the price hike of 40% will happen on your premium.

40% price hike on premiums, which is huge.

So you need to understand that the moment

this price hike happens, these companies will become more and more

profitable with time because they are just increasing their prices with every single

year and they will become massively profitable.

So this is a good business to invest, in my opinion.

So three businesses that I talked about.

One is GMM Pfaudler .

As the Pharma industry grows, something like GMM Pfaudler has to grow with it.

Second HDFC bank, it was a pioneer.

It has great balance sheet, great history, great vision.

And as the next leg of banking transpires

in India, HDFC bank will grow with it third and finally,

we are looking at HDFC Life and there are other life insurance companies as well.

Let me know if you would want me to make a video on that.

Hdfc Life is going to grow because

of the inelastic nature of the product and the sudden price rise

that HDFC Life Insurance and other insurance companies are undertaking.

As we speak now, before I drop off and end this video.

Very humble request.

So first and foremost, please do your due diligence on all these

different options that I'm suggesting only then take positions.

Take positions in small, small amounts.

Don't go and invest in lump sum because Nifty is very volatile right now.

If the entire market tanks then these

stocks, even fundamentally good stocks will come down a little bit,

but it will bounce back again and finally check out tax buddy.

It's a great form.

If you haven't filed your ITR yet, take their help.

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Thank you so much and I will see you next time.

Next time. Bye.