Outline
1. Stepwise Guide
2. Practical Example: CoffeeCan Companies
3. Practical Example: Smallcap Consistent compounders
4. Practical Example: Smallcap turnaround
5. Key Takeaway
Such opportunities only come once in a few years.
Step-by-step: how to use (the free) @screener_in to generate investment ideas.
Do retweet if you find it useful to benefit max investors. 🙏🙏
Ready or not, 🧵🧵⤵️
Outline
1. Stepwise Guide
2. Practical Example: CoffeeCan Companies
3. Practical Example: Smallcap Consistent compounders
4. Practical Example: Smallcap turnaround
5. Key Takeaway
Go to "CREATE NEW SCREEN"
At this point you need to register. No charges. I did that with my brother's email id. This is what you see after that.
"Show me all largecap companies with sales growing at 20%"
Start typing the metric which you care about. In this case "sales". As I do that, screener automatically suggests many metrics it knows about each company which contain the word "sales".
Think of screener as a way to "narrow down" the set of companies in indian listed universe.
Since we care about sales growth let me select sales growth 5 years. Now, in order to narrow down, I will restrict to companies with "sales growth 5 years" more than "20%".
I 'screened' for "sales growth > -1000"
That's a Neat trick.
(i) its sales cagr should be at least 20%
(ii) its market cap should be at least 10000
that is why i use an 'AND' operator between those 2 statements.
It works exactly like english.
I did that. THis is the screener:
https://t.co/zLJSJNOSQT
Done with our 1st screener. :)
As companies change, their 5 year sales CAGR rises & falls. And they go in & out of this screener.
Perhaps the most famous formulaic search for companies is Coffee Can investing.
Recent article from @scripbox talks about what this is:
https://t.co/1UWl3ODgPy
First of all, we must lower our sales growth target from 20%. Coffee can originally prescribes 10% sales growth, let me get a bid greedy & loook for 12% sales growth.
We want growth & profitability meet our minimum bar over all periods of time (definition of consistency). Screener has 3 year, 5 year, 7 year. Then let us modify our screener.
Here is the screen: https://t.co/r2u6pXvzh0
Feel free to explore.
This is where it starts getting interesting. This is my investable universe.
What do I look for in a smallcap consistent compounder?
Well first of all its market cap should be at most 1B$ (7000cr). Because smallcaps.
Last 1 year has been tumultuous. Once in a century pandemic. Asking for 15% sales growth in such an environment not only in last 1 year, but last 3 year CAGR is a pretty strict condition. This is why my universe shrinks from 1600 to 204.
https://t.co/wzJw4Haa9A
Go study gufic. Go study intellect design.
— Sahil Sharma (@sahil_vi) February 24, 2022
Dont tell me you dont have ideas. There are literally hundreds of ideas just waiting to be studied. Specially given our special market crash situation.
Perhaps the hardest thing to capture is turnarounds. But we can capture this too.
Encoded as:
"(Return on equity - Average return on equity 5Years ) > 5"
Tips industries, Everest Kanto, Tips, NGL Fine chem, Ksolves, Palred,
See the screener for yourself:
https://t.co/SH94RaioU6
How about Midcap consistent compounders which are decently valued?
1. Market cap restriction
2. Sales growth consistently
3. ROE consistently
4. Market cap/ Sales restriction
Screener: https://t.co/DjVtALMp00
Laurus, PI, Deepak, Dixon, Varun beverages, AU small finance, apl apollo tubes, angel one, Route Movile, Balaji Amines, RHI Magnesita, Mastek, Lux, Privi specialty, Prince Pipes, Granules
Link to screener:
https://t.co/DjVtALMp00
I bet one can make a 15-20% compounder portfolio from scratch by studying these 50-60 companies.
Put your head down, get going. :)
On a related note, a thread of all my threads:
https://t.co/9zKsBzkw5s
A #meta thread of all company analyses twitter threads I have created. Will update it whenever I add a new company analysis.
— Sahil Sharma (@sahil_vi) June 21, 2021
1. https://t.co/No2TeprnzY
2. https://t.co/Ya9WfsuNsG
3. https://t.co/RthyzJ4b0p
4. https://t.co/SH94RaioU6
5. https://t.co/DjVtALMp00
https://t.co/dDVrza2mY6
But i felt that one did not go into enough detail & did not share the screeners properly & so i am trying to do it again, this time more structured.
A lot of people ask: how do you find companies to invest in? very good question.
— Sahil Sharma (@sahil_vi) July 6, 2021
How did you find RACL, Pix?
Creating this ad-hoc thread to share my process.
if you like it, please RT to benefit maximum investors. \U0001f64f
More from Sahil Sharma
#neulandlab 🌋🌋 read on to understand this company and its story of transformation. On twitter, 🌋 has become synonymous with neuland, and this is how i will use it throughout the thread. If you like the thread, plz retweet & help fellow investors learn
Starting with a simple primer on the Pharma industry. They make medicines for all of us. The part of the medicine which gives it its potency against the ailment it cures is called API: Active Pharmaceutical
(here is a reference few people will get, but have to make it since I love it :D):
If Guardians of the globe (https://t.co/vH2C1TDbPy) were a medicine, Omniman (https://t.co/0DGb1MAtXN) is the API.
Back to 🌋. There are pharma companies which sell APIs as well as the finished medicine (FDF: Finished Dosage Formulation). Neuland are pureplay API manufacturers. This provides them some advantage since they don't compete with their clients (the FDF makers).
Medicine is diverse. There are medicine which were first discovered in 1920s (https://t.co/6DXNrhOK46), to those being created now (https://t.co/tcr7dAexmO). Naturally then, some of this involves very complex chemistry to manufacture, others are relatively easier to manufacture.
Starting with a simple primer on the Pharma industry. They make medicines for all of us. The part of the medicine which gives it its potency against the ailment it cures is called API: Active Pharmaceutical
(here is a reference few people will get, but have to make it since I love it :D):
If Guardians of the globe (https://t.co/vH2C1TDbPy) were a medicine, Omniman (https://t.co/0DGb1MAtXN) is the API.
Back to 🌋. There are pharma companies which sell APIs as well as the finished medicine (FDF: Finished Dosage Formulation). Neuland are pureplay API manufacturers. This provides them some advantage since they don't compete with their clients (the FDF makers).
Medicine is diverse. There are medicine which were first discovered in 1920s (https://t.co/6DXNrhOK46), to those being created now (https://t.co/tcr7dAexmO). Naturally then, some of this involves very complex chemistry to manufacture, others are relatively easier to manufacture.
Given the immense interest in this #investment #process thread about how to get investment ideas, thought of creating a logical follow-up 🧵
Given that I have an idea & some sense for valuation & growth, how do i construct a portfolio?
If you like the thread, plz RT.
First thing worth mentioning is that I am only describing my own process. Others can follow a different process which could work for them.
Opposite of a good idea can also be a good idea
Before understanding the process itself, it is important to understand the problems the process is being designed to solve for. What are the key hurdles or troubles I have faced in designing my PF.
Hurdles
1. At any given point in time (in the past) i have only known deeply about 5% of the listed universe in India, or lower. When I say know deeply I mean read an annual report, an investor presentation, a concall, understood why the business is how it is.
2. I only started my corporate life 4 years ago, so my pf size is small compared to yearly savings. This means that I need to deploy large incremental capital every year at least for next few years. This cant be a buy & track pf, this is a keep buying & tracking for a few yrs pf
Given that I have an idea & some sense for valuation & growth, how do i construct a portfolio?
If you like the thread, plz RT.
A lot of people ask: how do you find companies to invest in? very good question.
— Sahil Sharma (@sahil_vi) July 6, 2021
How did you find RACL, Pix?
Creating this ad-hoc thread to share my process.
if you like it, please RT to benefit maximum investors. \U0001f64f
First thing worth mentioning is that I am only describing my own process. Others can follow a different process which could work for them.
Opposite of a good idea can also be a good idea
Before understanding the process itself, it is important to understand the problems the process is being designed to solve for. What are the key hurdles or troubles I have faced in designing my PF.
Hurdles
1. At any given point in time (in the past) i have only known deeply about 5% of the listed universe in India, or lower. When I say know deeply I mean read an annual report, an investor presentation, a concall, understood why the business is how it is.
2. I only started my corporate life 4 years ago, so my pf size is small compared to yearly savings. This means that I need to deploy large incremental capital every year at least for next few years. This cant be a buy & track pf, this is a keep buying & tracking for a few yrs pf
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USC's Interactive Media & Games Division cancels all-star panel that included top-tier game developers who were invited to share their experiences with students. Why? Because there were no women on the
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