Can It Electrify the Portfolio?


Everything works in cycle. There is nothing that works in straight line. Stock market is no different either. If you buy something at the wrong time then despite business being good and management being good you may end up with losses. Now value investors will tell you hold it for long term if everything is great. That is wrong because there is opportunity cost too. While your stock is in red other stocks are making more and more green. You have to cope with that too.

Ultimately there are no prizes for holding great business but only your profits can help you in paying the bills or buying something that you desire. All other things in market howsoever great must result into better returns. The only thing that should matter to you is your CAGR.

See that above tweet? Clearly says RT and Like. Many people won’t be doing even that and some would do just like and come in DM asking for stocks. We are not asking for your kidney. If you can not RT and Like then do you really deserve the ideas and will not that be unfair to those who actually RT and Like?

Salzer Electronics. MCap 205 Cr. CMP 128.

Company is into business of manufacturing electrical installation products and components. You can click on the name above to see the product range in detail.

Let’s look at the price action of the stock which is non negotiable for us –

Every chart on website is clickable and you can then see it in large view.

This is weekly chart. As you can see stock is forming a reverse head and shoulders pattern. For quite some time even before corona crash came it was under pressure and trading below 140 level. Corona crash led to stock crashing from 130s to 50s. After that stock has been undoing all that damage and recently in Dec 2020 stock was able to made highs of 153 which is highest since Oct 2018. Clearly market participants are not averse to this stock anymore. But there is no clear likability for the same either as of now. In early March 2021 stock again attempted to break out of that consolidation but it failed but you can see the large volume.

It looks like bullish sentiments are subdued due to selling by Sundaram MF which had during March 2020 5.62% stake which has been consistently reducing and currently is near 2.67%. This selling may keep stock under pressure for sometime or if buyers prevail then seeing the run MF house may exit quickly. Not much downside visible from here thus.

Even though it is barely 200 Cr MCap company the float is large in terms of percentage. That means significant desirability to own the stock must be there for it to move big. If there was same money chasing few shares then move it will likely be bigger.

On normalized basis you can expect it to post the EPS of ₹16-20. Even from valuations perspective there is no outrageous situation.

It is looking good in the range of 120-130 although momentum will come only once stock is able to sustain above 145. It may happen after few weeks to 2-3 months and that is hard to say.

Clear red line below which more pain may ensue is 116 on daily closing basis.

Generally this is how we cover the stock ideas for Pro members. Please do not DM us now about membership since it opens on first two days of each month and only then you can get it. It will open next on 1 May 2021 and will close on 2 May 2021.

Do your DD and run it through your checklist. Let us know what you think about this idea.

Disclaimer: Posts on the platforms of BN are our perspective on the market. These are purely meant for learning purposes. The perspective provided should not be construed as investment advice or solicitation to trade. We may have positions in the stock mentioned. You agree to make no trade relying on the above contained information fully or partly. By using the content, you agree to these T&Cs.

How useful was this post?

Click on a star to rate it!

Average rating 4.5 / 5. Vote count: 2

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

3 Replies to “Can It Electrify the Portfolio?”

  1. You were right that the move will come only when it sustains over ₹145 which may take from weeks to 2-3 months. This stock has neither hit the stop loss nor crossed and sustained 145. How do you see things shaping up here?

  2. Now Salzer has joined the bandwagon of EV. In this regard they have come up with a JV named Salzer Emarch Electromibility. They will make electric conversion kits for auto, car and bus. They will also manufacture novel electric driven utility vehicles.

Leave a Reply

error: Content is protected !!