Tweet Buster: How a demerger can unlock value for ITC shareholders
NEW DELHI: With Nifty scaling fresh all-time highs, investors have once again started to worry over the sustainability of valuations at a time when the earnings outlook looks foggy amid lockdowns. Nifty smallcap and midcap indices also scaled fresh 52-week highs as the broader market continued to outperform.
On Twitter, Zerodha CEO Nithin Kamath groused that the social media platform has rejected his request for a verified account. Hours later, he managed to get the coveted “Blue Tick”.
In this edition of ‘Tweet Buster‘ we look beyond memes on
to understand investing strategies to navigate the market.
ETFs vs Index Fund
Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, said it is a myth that ETFs are less risky than an index fund. “These are vehicles. Risk comes from the underlying portfolio.”
Myth: It’s less risky because it’s an ETF or index fund These are vehicles. Risk comes from the underlying portfolio.
— Radhika Gupta (@iRadhikaGupta) 1622527960000
International investing
Gupta said Sebi’s circular on enhancing the limits of MFs to invest overseas is very positive as international investing is taking off now. “This move only widens the space for this category to grow, and fund houses to do more in this space.”
The SEBI circular on enhancing the limits of MFs to invest overseas is very positive. International investing is i… https://t.co/aXu3Hgf8k0
— Radhika Gupta (@iRadhikaGupta) 1622729120000
Did you know?
Gupta said bond ETFs account for 18% of global ETF AUM, but 37% of 2020 flows, making them one of the fastest growing passive asset classes. “Passive is not just equity!”
Bond ETFs account for 18% of global ETF AUM, but 37% of 2020 flows, making them one of the fastest growing passive… https://t.co/d3yvfCE6lG
— Radhika Gupta (@iRadhikaGupta) 1622567765000
Buy call
Sanjiv Bhasin of IIFL Securities remains bullish on Zee and has a target of Rs 250 on the stock this month. He said yesteryear’s wealth destroyer can be a great wealth creator in 2021.
@thesanjaydutt @IndiaToday @250 Less then 2 weeks & Zee hits 222 from 187,up 19% & looking good for 250 in June..wh… https://t.co/OaHVawkD2V
— sanjiv (@sanjiv_bhasin) 1622718793000
For ITC fans
In this thread, ‘Fundoo Professor’ Sanjay Bakshi explains how a demerger will unlock value for ITC shareholders.
Technically speaking it’s possible. In a tobacco litigation scenario, if courts decide against the company and awar… https://t.co/IrpnsVbd6d
— Fundoo Professor (@Sanjay__Bakshi) 1622903720000
But the taint of tobacco is removed from non tobacco assets if they are separated from the tobacco operations with… https://t.co/sFTuMv34m6
— Fundoo Professor (@Sanjay__Bakshi) 1622903720000
In the US something analogous happened when tobacco companies massively increased dividend payout ratios thereby p… https://t.co/HjjCPLhCw4
— Fundoo Professor (@Sanjay__Bakshi) 1622903720000
That’s because you can sue a company for alleged harm but not its stockholders as company is not the same as stockh… https://t.co/HvS8NuIy8D
— Fundoo Professor (@Sanjay__Bakshi) 1622903721000
Another scenario in which this can happen is that if ITC tobacco is separated from other businesses, then non tobac… https://t.co/wSTKx8knRK
— Fundoo Professor (@Sanjay__Bakshi) 1622903722000
A third scenario in which this can happen is to do with cost of capital. With ESG becoming a dominant force, a larg… https://t.co/utkqrpkTLz
— Fundoo Professor (@Sanjay__Bakshi) 1622904201000
Herd Behaviour
Behavioural finance expert and author Morgan Housel says two things can be true about this market: 1) It’s crazy, and 2) social media has permanently changed investor behavior in ways many professional investors haven’t yet come to terms with.
“People are interpreting this as suggesting the market will never crash. I think it’s the opposite: we’ve just made it easier for crazy things to happen,” he said.
Two things can be true about this market: 1. It’s crazy. 2. Social media has permanently changed investor behav… https://t.co/baSK2aT4kD
— Morgan Housel (@morganhousel) 1622741037000
Time to panic?
DSP Mutual Fund’s Kalpen Parekh said if you have to panic – don’t panic at March 2020 lows – rather panic at June 2021 highs. “Not a timing advise. The urge to rebalance asset allocation increases after sharp corrections, never when prices rise every day. I exercise my urge to trim by shifting from equity to DAAF.”
If you have to panic – don’t panic at March 2020 lows – rather panic at June 2021 highsNot a timing adviseThe u… https://t.co/bNgItBh2Ab
— Kalpen Parekh (@KalpenParekh) 1622654398000
Contra bet
PMS fund manager Shyam Sekhar said the best contrarian theme right now is anti-ESG. “Back the truck, pick your shovels, pack the portfolio, load as much as you like and drive on. Your GPS will take you to the bank laughing all the way along.”
The best #Contrarian theme right now is Anti #ESG.Back the truck, pick your shovels, pack the portfolio, load as… https://t.co/nHNyaLWy0s
— Shyam Sekhar (@shyamsek) 1622772433000
Show me the cash
Independent market expert Sandip Sabharwal said dividends and buybacks are the only true reflection of cash in the balance of companies.
Dividends and Buybacks are the only true reflection of cash in the balance of companiesAll the rest is fiction….
— sandip sabharwal (@sandipsabharwal) 1622800117000
Valuation worries
Sabharwal pointed out that the valuation gap between Bajaj Finance and any other NBFC stock is now at a record high. “So only Bajaj Finance will be able to cope up with the NPA spike due to the Covid second wave? Bajaj Finance is now 25-30% more expensive than any other financial stock in India,” he said.
The valuation gap between #BajajFinance and any other NBFC stock is now at a record highSo only Bajaj Finance will… https://t.co/F6gQhgpJqe
— sandip sabharwal (@sandipsabharwal) 1622792113000
The post Tweet Buster: How a demerger can unlock value for ITC shareholders first appeared on WorthStocks - Share Market Tips.
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