I own Bruce Fund and it has taken in a lot of cash over the past year or so. It seems bloated and its returns have suffered. Should I sell it or do you think it can rebound?
The North America-focused fund’s net asset value has fallen for the past one-, three- and six-month periods as well as for the past one year, though it has given goods returns over the three-, five- and 10-year periods. The fund has also underperformed the S&P 500 index, its benchmark, for the one-year period. You may exit this fund as 63.44% of its net assets is invested in the US (equity, debt and treasury) and pick those with more commitments to emerging markets, especially the Bric countries (Brazil, Russia, India and China), for high growth and returns. As far as the chances of a rebound is concerned, I think the chances are remote.
I have been investing in mutual funds for the last three years and have had good returns so far. I would now like to invest in stocks , initially Rs25,000. What would be your advice? Can you suggest some stocks to invest?
If you are a new entrant in stock market, then my advice is to invest via initial public offerings. Off late IPOs have performed well (Mundra Port and Special Economic Zone Ltd, BGR Energy Systems Ltd, Trasformer & Rectifiers (India) Ltd, Burnpur Cement Ltd, eClerx Services Ltd, Edelweiss Capital Ltd, etc.). There are some good IPOs in the pipeline. You can invest in them and safely maximize your returns.
I have 50 shares of ICSA India Ltd bought at Rs321, 50 shares of IVR Prime Urban Developers Ltd at Rs429, 250 shares of Punj Lloyd Ltd at Rs400 and 50 shares of Praj Industries Ltd at Rs208. Kindly advise about their prospects and further accumulations. I am a long-term investor.
- Gopal Singh
ICSA India Ltd is likely to consolidate in the short run, while in the long run it still has potential to appreciate. You may continue to hold this stock. Technically, IVR Prime Urban Developers Ltd does not look very attractive. You may exit it and buy stock in some other industry, such as PSU banks. Punj Lloyd Ltd is in a bullish phase and, though it may remain range bound in the short term, it has a good long-term potential. You may continue to hold the stock as well as Praj Industries Ltd, which may see consistent growth. However, I would not recommend accumulating any of these stocks as I think there are better opportunities available in the market.
I have bought 1,000 shares of Simbhaoli Sugar Mills Ltd at Rs59, 1,000 shares of South Asian Petrochem Ltd at Rs38, 1,000 shares of JCT at Rs18 and 1,000 shares of GTL infrastructure Ltd at Rs103 and 1,000 shares of IFCI Ltd. Tell me the prospect of earnings for these companies. Can I increase my exposure in these companies? I have a long-term perspective and willing to take high risk for high returns.
- Saurabh Agarwal
You have a fairly diversified portfolio. However, if you look into the performance of these stocks, you will notice that they were fairly volatile in the past. So, keeping in view the cyclical nature of one of your portfolio components and the volatile nature of your stocks in general, I would not suggest you to add any further positions in them. As mentioned in the previous columns, PSU banks are still a good buy and can offer you good returns in long term. Interestingly, they do not carry high risk, but have the potential to offer higher returns.
I am planning to invest around Rs35000 in a tax-saving mutual fund this week. Which mutual fund is the best bargain?
- Ashok Patnaik
SBI Magnum Taxgain could be a good investment option.
Advise me what should I do with Burnpur Cement Ltd, purchased at Rs56 and Brigade Enterprises Ltd, purchased at Rs390 .
- Dhairut Bhupendra Dholakia
On Burnpur Cement Ltd, I had mentioned in last week’s column that the current rates and valuations are stretched. The stock retraced sharply and is still headed south. Not much technical information is available on it due to its recent listing. I would suggest you to exit it near your purchase rate and invest in some other good stocks. You may hold Brigade Enterprises Ltd for six months.
I am having 100 shares of Reliance Petroleum Ltd bought at Rs231, 100 shares of Reliance Natural Resources Ltd bought at Rs241 and 300 shares of Power Grid Corp. of India Ltd bought at Rs163. Kindly tell me the position of these stocks and whether I should sell them or to hold.
- D. Manohar Babu
You have not mentioned your time frame for the investment. If you have a long-term perspective, spanning over one-two years, then I must say you have good shares in your portfolio. Reliance Petroleum Ltd and Reliance Natural Resources Ltd are observing speculative movements and thus could remain highly volatile in the short run. But once the market stabilizes and these stocks assume a normal trading pattern, it appears that they will grow steadily in the months and years to come. So if you have a capacity to hold, you must hold them. About Power Grid, the stock is likely to bounce back in short term and may seek levels like Rs156. However, on the downside, it has a stop loss at Rs131. In the long term, this stock is likely to do fairly well.
I have bought 3,000 shares of IKF Technologies Ltd at an average rate of Rs7.50.What is right time to sell them?
- R.D. Agarwal
Fundamentally, there is nothing very exciting about this company. Technically, the stock has hit its all time high on 8 January and since then has retraced a bit. However, at the last closing rate of Rs18.45, the stock is still giving you fabulous returns. You may exit the stocks around current levels for better investment opportunities.
I am holding 3,800 shares of Deccan Aviation Ltd. Should I sell now or hold till the merger with Kingfisher and its modalities become clear?
The fallouts of the merger between Deccan Aviation Ltd and Kingfisher are still not very clear. So fundamentally it would be better to wait till a clear picture emerges. Technically, the stock is showing long-term strength, though it may observe volatility in the short run. So, you may hold the stock now, but may consider booking part profits once it hits Rs320 levels.
I own shares of GTL Ltd, GTL Infrastructure Ltd, Creative Eye Ltd, Reliance Natural Resources and Phoenix Mills Ltd. Should I hold or sell them?
- Ramdas Suryawanshi
GTL Ltd is likely to scale higher levels in the long term. However in the short term, the stock may witness some profit selling. If you are a long-term investor, you should not worry much and can buy the stock on declines. However if you have a short-term perspective, then you can put a stop loss at Rs242. GTL Infrastructure may also do well in long term. The stock is showing chances of some short-term positive movements, which may take the stock to Rs93 levels. However, if you have a short-term perspective, then you may consider a stop loss of Rs76. While in long term, you may remain invested with a target of Rs135. Creative Eye seems to be on the higher end of its valuation fundamentally, but has come sharply off its higher levels. It would be better if you either exit the stock at around Rs41-43 or wait for its results to reassess its fundamental strength. Technically, the stock does not hold too much in store. Reliance Natural Resources is a good stock with a long-term perspective and you should stay invested. Phoenix Mills Ltd is a steady performer. Technically, it is not showing any significant movement. However, from a long-term perspective, you may continue to hold this stock.
Are IKF Technologies Ltd, Nandan Exim Ltd and Kaashyap Technologies Ltd fundamentally strong? There seems something wrong with these shares.
- Ravindra Sharma
I can’t comment on your view about anything wrong or right about these shares as it depends on the perspective. Stocks mentioned by you have run sharply in the past few weeks and have typical been momentum stocks, I agree that fundamentally there is nothing exciting about Nandan Exim and IKF Technologies. But Kaashyap Technologies has been in news for some positive developments.
I’am holding the following stocks. Nagarjuna Fertilizers and Chemicals Ltd, bought at Rs70; Shiva Cement Ltd, bought at Rs9.67; RPG Cables Ltd, bought at Rs56; Reliance Natural Resources, bought at Rs33.67 and Reliance Petroleum, bought at Rs113. Not sure if I should sell or hold any of above stocks. Kindly advise.
- Ganesh Morde
You have decent holdings acquired at attractive rates. However, purely technically, Nagarjuna Fertilizers and Chemicals Ltd at current price of Rs72.40 is a hold. The stock has a strong resistance at Rs87. If it closes above this level with good volumes, then you may expect it to go up further. However, in the short term, it has a stop loss at Rs65. Shiva Cement is a typical momentum stock and has a stop loss in the short term at Rs17. A close below this level with high volumes can be considered an opportunity to exit. RPG Cables is in consolidation after it shot up in mid-November. Technically the stock has a fairly good chance of appreciation in the long term, while it is likely to consolidate with some downward bias in the short term. A lot has been said about Reliance Natural Resources in this column. In the short term, it is likely to consolidate with some downward bias. But in the long term, it will rise. Reliance Petroleum is a very good portfolio pick and should be hold with a long-term view. You may buy Reliance Petroleum at declines with a long-term perspective.
I am holding 60 shares of House of Pearl Fashions Ltd, purchased in IPO at Rs550. Since the price of this share is going down constantly and is currently trading at around Rs300, please advise whether I should retain or dispose of it? Is there any likelyhood of it appreciating and touching its issue price in the near future?
- B.H. Santwani
Technically, it would be difficult to say whether this stock would match its IPO price or not as it is showing signs of tiring out in short as well as medium terms. The stock, though took a sharp recovery from its low level of Rs207 touched on 8 November 2007 and hit a high of Rs367 on 4 January. The stock has a strong resistance at Rs396 and unless it closes above this level, it would be difficult for it to sustain the northward momentum. If you have a capacity to hold, you may consider holding it for the next six months. Otherwise, exit it at around Rs320-330.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.