저자: 360Investing리서치애널리스트 · 외국인
요약 보기
Peter Lynch의 'Invest in what you know'와 GARP(합리적 가격의 성장) 전략을 소개한다. PEG 1.5 이하, PE 100 이하, ROC·매출성장 기준의 스크리너를 시연하고, 단계적 분할매수와 실적·마진·경영진 코멘트 점검을 실행 절차로 제시한다. 특정 종목 매수·매도 추천은 하지 않는다고 명시.
다듬은 글
Hello viewers, welcome to 360 Investing. There is a very famous quote which says invest in what you understand before street does. And this is said by a very legendary fund manager Peter Lynch. Peter Lynch has generated approximately 30% returns over 13 years through his fund. And if you see, he converted $1000 into almost $28,000.
So it is a massive return because Rakesh ji once said in his interview that for me if I get 18% I am a king if I get 22% I am an emperor. So Peter Lynch has outperformed the market for 11 out of 13 years and he converted approximately 14 million rupees into 18 billion rupees. That's a massive wealth creation.
Now many people might have thought that it would involve a lot of strategies, a lot of people, a lot of time, effort and research. But there is a simple framework that he has used in his life. That is just keep your eyes, mind and ears open. Observe everything around you. Because the theme is that the multibaggers are around you.
You just need to find it. So today we are going to talk about Peter Lynch's core strategy. I will also tell you some steps in this. After that we will also look at the execution plan and after executing it I will do some case studies with you. We will also discuss some stocks through the screener. So that it can give you a good idea on how to approach this strategy and how this strategy can help you in generating consistent returns.
So it is a very interesting andant strategy do watch it till the end and at last I will also give you a task, for the one who completes this task we have kept some rewards that we are going to disclose towards the end of this video. If you guys are listening to me or seeing me for the first time. So being a research analyst at 360 Investing, we do market research.
In which we have covered Technical Framework Strategies, Technical Fundamental Strategies and also we have covered many different sector analysis. In this video you will also get content on personal finance. In case you are already interested in learning markets and also you are trying to invest in markets.
So, this is the right platform for you. If you haven't subscribed , hit the subscribe button with this, let's get started. So the first thing that we're going to discuss is invest in what you know. What does So What You Know mean? That such popular themes or such popular brands which have a very good loyalty base and consumption is a consumer behavior which is positive.
You can catch those trends. If you look at the recent times, the theme of defence has been in the limelight. The themes of power generation and data centers have been in the limelight. And it is not that defence and power generation or data centre are short term themes of one or two years. This theme might survive for the next five years and more than that.
So basically in this way you have to see the early signs as to what is happening in the market, what things are going on or are going to go on, on which you can base and you can actually do research on it. Now the second thing that Peter Lins focused on was your 10X growth story. A 10x growth story means I want to stay invested in the long term and it should have multiple growth potential.
Therefore, if you see, Peter Lynch was more focused on small caps and mid caps. So there he used to favor small cap companies where the growth potential is very high and where 20%-30% growth can be achieved. Now there are two things in this as I told you, one is longevity of earnings and second is sustainable business model.
So, the company whose business model can grow and remain relevant for a long time, its business comes in a shortlist category of Peter Lynch. Now the third one is an interesting fundamental matrix or we can call it a valuation matrix which has been made very famous by Peter Lynch. It has become quite popular.
He has also mentioned it in his books. That is your peg ratio. Now what is peg ratio? PEG ratio is your PE upon growth. Now PE upon growth price to earnings upon growth. If you want to understand this then go to my fundamentals playlist and make a separate video on it. You can see that for details. But let me tell you in simple language.
Let's say for example the price to earnings of a company, that is your PE ratio. It is equal to 20. Ok? And if there is growth, the percentage of growth in the company is also 20%. So then your peg becomes one 20/20 that is one. So this is Peter Lynch's framework. Any company where the peg is more than 1.5 that is expensive.
So you have to value the peg reasonably. The peg should be approximately 1.5 and below that. If it is found below one then it is very good. But normally you do not get the peg so cheap in high growth companies. So you need to find the right timing for that. Now if you have any doubt regarding the pegs that we have told you in simple language, then you can ask in the comments.
But I will give you some examples of this as well when we see the screening later. The fourth principle that Peter Lynch follows is your strong fundamentals and simple business. So strong fundamentals means there is a company whose business model is good and there is no debt in the company. Is able to generate cash flow consistently.
That's a strong business. And Simple Framework What does Simple Business mean? So simple business is that which you can easily explain to a small child, that is, a child of 8th class or a child of 10th standard, if you can convince someone about the business model in 2 minutes, then that is your business.
So basically, this simple framework that he has used, strong fundamentals with simple business, has actually been beneficial for Peter Lynch in the long run. Now, the fifth and the most important principle that Peter Lins has talked about in his books as well. I have this book called Beating the Street.
If you see in this also, he has told a lot about his career as a fund manager and has also explained many different frameworks in it. Ah, you have told important learnings. Out of this, he has said one very good thing about timing the market. Time in the market. Time in the market is more important than timing the market.
So, in the long term, the more you stick to your principles and research in any stock, the better your money can grow in the long run. So you don't need to invest in a destabilizing business but a good business model that can actually scale over a long period of time and stay invested in it is important.
And Peter Lynch said another great thing about what do normal people do ? They keep accumulating stocks randomly. Meaning, the portfolio of 10 stocks became 15 stocks , 15 became 25, 25 became 50. Stocks are being bought, they are being bought and actually you are not cutting down the position. So what happens?
You exit those which are profitable. Those which are losses remain stuck with you somewhere. So in a way we are not building a portfolio in the market. We are just collecting garbage from the market. So basically ultimately your portfolio gets spoiled in that. So Peter Lynch said something very good.
He is always focused on winners. So you can take a position in whatever is winning. You can add opt to it. And those who are losers are cut down or ignored somewhere. So, the strategy and executable strategy from Peter Lynch known as Garb Strategy that we are going to discuss in this video which is your growth at a reasonable price.
So here we come to the screener. Here at siner.in, I have created a screening strategy tool. That is a Garp. So I've added some filters to Garp. You can see how the strategy has been made. We have taken the company with a market cap above Rs 1000 crore. We have taken less than two pegs. And the company should create ROC and also profit growth should be more than 10% and price to earnings is not very expensive.
Therefore, we do not want companies with PE multiple above 100. So basically, when we are talking about pack pack, then suppose if the company is seeing 100% growth and the price to earnings multiple is 100. So Then Again Your Pack Will Be One. So basically the 1.2 1.5 pack also works but there I feel the PE ratio should not be more than 100.
So this is one thing we have kept as criteria here. Because the growth gets decelerated due to some news or some policy change. So that's a major problem when you are chasing stocks with very high multiples. So basically here we have taken that thing into consideration and sales growth should be approximately 10% and more than 10% and here you will find some companies.
So here we first split the companies market cap wise. So let's go top to bottom. For example, if you look at the last cap company, Sun Pharma is coming in this filter. So Sun Pharma is set in this filter. Given MNM Finance. So if you look at MNM Finance in the last one year, it was coming under this framework.
There we saw multiple good products being launched. So the company is a large cap company but is growing very strongly. It is growing at 30% to 25%. Apart from that, if you see, the company has changed its product mix a lot. It is also gaining market share. So MM has been outperformed in the last couple of years.
Apart from that trend, if you see, the trend has just started coming. Because earlier their PE multiple was more than 100. So in recent times 8085 has come around PE multiple of 75. Whereas recently the company announced slightly better numbers. Bonus has also been announced. Where as Sola Finance comes into this category then Lupin happened.
Vari energies happened. Waaree Energy is one of the strong companies when you talk about the solar theme that is integrating backwards. It is upgrading in wafers, technology, and in ings, so Wari Energy is one of the strong players there. If you want to track solar themes and renewables, you can do that.
Apart from that persistent system, the numbers in persistence have been good in the past. But if you look at AI which has just come up, there has been margin compression in many places in recent times in HCL Tech or other companies. So here we have an IT sector theme, IT which is a theme, after the arrival of AI Entropic, a little hurdle is visible there in the near term.
So the clarity is still low. Clarity is missing already. Apart from that, if you can see the growth guidance for IT sectors, whether it is for TCS or Infosys, the growth guidance has been quite muted. Remained in single digits. Therefore, if you see, you will not see momentum in IT companies here. In fact, apart from that you can see DX.
So Don was a major outperformer in the past but has seen flat sales growth in recent quarters. That is only 2% of sales growth. So this momentum has actually died down. Where the diction of 18,000 has fallen to around 100,000 10,500 at present. But roughly we will have to see in one or two quarters whether the growth revives.
So a lot of people might be interested in this. So, this ah market cap has also eroded significantly in Dicon. But overall Don is a well managed company which we have already seen very good momentum in the past. Apart from that, Premium Energy is again a competitor for your Vari Energies. IRCTC comes.
Growth levers are missing, so this is better for you in the framework but you will have to look at the growth levers individually. 361 Is One of the Good Companies falls under the theme of Capital Markets. You can go and see that in wealth management business. Then apart from that Kalyan Jewellers again one of the companies which is Titan's competitor in the jewellery segment is Sanko Thangamyil, so you can go and see individually here also that the growth numbers were quite good in the recent quarter.
So you can see that IS is one of the companies which provides medical data sessions if you look at it. A. If you have clients in the US, then if you look at the patients there, I will tell you in short. Your IAS provides services to the doctors in the hospital to manage their patient data, scheduling, payments etc.
So it is into health care for lots of hospitals in the US. Now basically apart from that Anantraj also comes. That is into data centers. Then you have sheltered hotels. We also talked about India Hotels. But the hotel industry has not shown that much momentum in the last two-three quarters. Therefore, a lot of hotel industry stocks have actually derated.
So not much momentum came there. And some of them were actually trading at a higher multiple than average in the last two couple of years. So basically, a little bit of momentum was seen there. Then we made an analysis of TBOT in the recent above. You can go and watch this video. I'll tell the team to flash here.
So you can watch this video. Above TBO Tech. So TBO Tech is one of the strong modes in B to B business in the travel industry. If you are interested then you have good ideas like Gravita India Recycling which I think is a long term trend which we discussed in Gar Strategy that the long term viability of business and the theme should be relevant and should be scalable in the long term.
So that is something that I think the recycling theme can happen in India. So in recycling it became Pondioxide , it became Gravita India. There are some such companies. There are some good water purification companies in Than Water also. If you also have something in mind then you can tell me in the comments.
Let's see who gets it right. Then going forward you will also find some small cap microcab companies. Like spectrum happened. Then Danish Power became NDR Auto Auto Energies Companies within it falls. Then you have Raju Engineering ah then Vilas Transcore you have different companies like Lakshmi Dandal.
So Airflex is one such company that we have covered earlier as well. We covered Aerox a year and a half ago. We have already invested in this company as a disclaimer. I am not giving any buy sale recommendation on any of the companies that we have discussed. It's just that I am sharing the framework with you.
And when we covered Aeroflex here also, it was close to 180, from 170 it has now become almost 300, the stock it has almost doubled in the last one and a half years. So that's how we keep coming up with good ideas and you can track them with us. If you are a part of this channel, you can watch 360 Investing regularly.
So you must know that we consistently discuss a lot of new ideas and themes on our channel. So through the GAR strategy, you must have understood that growth at reasonable prices, we are focusing on such companies where there is growth and the valuation is also decent enough. Now you will tell me Azam, you have shared the screener here.
Now how to execute? Now that's the most important part because many people have the knowledge but somewhere the execution is missing. So, for execution, it is necessary to create a process and a framework and now we share that framework with you. That is execution. So before we start with the execution plan if you really got this strategy like the like button if you are loving this video.
Now here in the execution plan the first thing which is the first step is observation. And what do you have to look for in observation ? Sector Trends and Consumer Behavior. Sectoral tailwinds and your consumer sentiments, whether in the B2B category or B2C category, you have to ensure that both should be positive.
Now second part focus on companies which have more than 20% kind of 15-20% kind of revenue growth and there is no dept inside the company and consistently ROC it is more than 10-15%. Now let me tell you about the third framework. You can flatter the peg ratio by setting it below 1.5. Apart from that, avoid companies that are trading at a higher multiple than the five-year average multiple, meaning ignore overhyped companies that are trading at a much higher level than the 5-year average multiple, which is far from their actual fundamental reality.
The third thing if you look at the chart is the same meaning which I am telling you right now about overhyped, on the chart the company which is moving far away from the 50 moving average, there is extended momentum, even there you should avoid buying at the peak. Now the most important part in execution is the fourth thing, how to execute it?
So start taking smaller positions. Don't add bulk positions at the start. So in the beginning you do not have to fire all the bullets at once. You have to fire in the transes. So first you can give 30% 40% allocation. After that you can pile up 20-30% more and then again you can pile up more 20-30% as per your own comfort zone and availability of price.
How are you getting the price? So that is the strategy. Now the last thing that you need to do if you love your portfolio and your money. One thing you have to do is track your positions and review it, review your companies. So how to do this? You have to review earnings growth. What's going on with earnings growth?
You have to track the results that come quarter on quarter. Second, you need to pay attention to the margin guidance to see what the margins are doing. Margin Growth Margin Treasury tells you a lot of things. If somewhere the peak margins are becoming very high and here the company itself is coming forward and saying that this is one of the margins, these will not remain consistently stable.
So you have to be cautious there. I am giving you this hint by which you can avoid excessive peaking. And third thing management commentary. What new ideas is the management trying? Where is the new capex being done ? Where are you investing? How many means which new products are entering the mix ? Where is it making acquisitions?
What growth possibilities does the company have in the future? That is something, you will know this from management commentary from time to time. So these are the three things you have to do if you want to be a smart investor. So, if you can leverage and improve the five-point execution plan that I told you, then you can generate good returns in a long run over multi-year periods.
Now 30% will be made every year. I can't guarantee it's like Peter Lynch made it. Nor does Peter Lynch guarantee it. But I can tell you this thing that in the long term you can bring a lot of good picks in your portfolio. If you follow this strategy, even in bad times markets, you can find good growth opportunities at reasonable prices through GRAB strategy.
So, for you guys, at 360 Investing, we keep doing such hard core research based on stocks and research ah based on sectors. Now I have brought a task for you people. Those who have seen the Gab Strategy here, if you follow the Gab Strategy and bring some write- ups, some new ideas about stocks, then what do you have to do?
You have to make a one pager write up of good stock ideas and send it to us on our website 360 investing.in. By going inside this you can contact us through mail. So those who mail me, here I will review your write ups with our team. I'm going to gift a book by Peter Lynch to whoever I like best about stocks.
So you will get a gift. But make sure that you have good unique ideas which are relevant in the market. Share your good ideas with us. And 360Investing.in is our official website. We also do webinars here. You will also get its announcement. So stay tuned with 360 Investing and 360 Investing also has a Telegram channel where we post research updates free of cost, you will find its link in the description, you can join the channel in the future and follow for more such detailed research, 360 Investing, if you liked this strategy then share it with your friends, family members and relatives, hit the like button, so see you in the next video with a new analysis, till then keep learning keep going with 360 Investing because hope is understanding, thank you
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