‘This correction could be an opportunity to boost returns: Sunil Singhania
Subscribe to enjoy similar stories. While it is uncertain whether the market might dip 2% before rising, for those seeking decent returns and investing with a long-term perspective, any time is a good time to invest, says Sunil Singhania, founder of Abakkus Asset Manager. “This correction could be an opportunity to boost returns by buying stocks 10-15% cheaper," he believes.
The capital goods and infrastructure sectors look very promising but stocks in these sectors are somewhat overpriced, so the ongoing correction may present opportunities in these areas, he said while adding, “We generally avoid sectors that are heavily government-dependent". Edited excerpts: We are value-focused and approach stock investing as becoming a partner in the business. Our core investment philosophy is straightforward.
First, we aim to be investors, not allocators, analyzing whether a stock will generate returns rather than merely adjusting weightage. Second, we are numbers-focused and avoid loss-making companies, prioritizing profitability and its visibility. Third, we don’t mind being the first or sole investor, supported by our large research team.
Fourth, we remain flexible, open to any sector as long as the stock meets our criteria. Fifth, we adopt a buy-and-hold approach, investing with a 3–4 year perspective. Lastly, valuations are crucial; the best stock isn’t always the best company or vice versa, especially when priced beyond perfection.
Our framework focuses on investing in profit-making companies with a return on capital employed (ROCE) or equity (ROE) of at least 14-15%, and profits ideally doubling in 4-5 years. Return expectations vary with time. In 2020, we aimed for stocks that could double in two years, then shifted to
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