In my earlier article I describe about selling strategy in a stock and tell how Chandu book 63.26 % Profit in BLB Ltd. ( Chandu is a notional follower of me)
Read all part of Chandu story from this part 1 here:-
or
Read details of earlier 63.26% profit here:-
Now I describe 2nd profit booking of Chandu:-
Fundamental target price of a stock:-In BLB ltd story I think calculation of selling strategy is little hard for small investors and for those who unable to track stock price every day (like me because I hold many stocks and I am so busy in my life so I am unable to track stock price every day)
Then what to do?
OK, from this part we use fundamental target price of a stock which I describe in chapter 5 ( page 28) of my book.
If you do not buy my book yet then first buy it from here:-
( I am the author of book and not sell my book directly or indirectly recently I find that Amazon charge high price 800-900 for my book so I give you above uread.com links where you get it below INR 500 so please remember I am not liable for any mistake from book seller )
If you do not want to buy my book then no problem I quote some line from chapter 5 of my book:-
"Averaged out net revenue per share , book value and base price of a stock then reduce it 10 % this is the fundamental target price of a stock."
So when I publish manali petro recommendation @8.44 on 13.04.2013( read it here;-manli petro) then:-
Net sale per share of manali petro was=33
Base price was=11.71
Book value of march 2013=11.19
So as per above line"Averaged out net revenue per share , book value and base price of a stock then reduce it 10 % this is the fundamental target price of a stock."
33+11.71+11.19=55.90
average out=55.90/3=18.63
reduce 10% for safety=18.63-1.86=16.77
So 16.77 is the fundamental target price of chandu he achieve this target on 10 Nov 2014 so here is the chandu profit booking details in manali petro:-
Buying date:-15-Apr-13
Price:-8.28 ( read part 2 of this story again to understand why I use price 8.28 instead of 8.44 link for part 2 is " Part 2")
Quantity:-604
Brokerage:-50
Total investment with brokerage:-5051
Selling date:-10-Nov-14
Selling price;-16.79
Quantity:-604
Brokerage:-50
Total amount get from selling-brokerage:-10091
Net profit:-10091-5051=5040
Dividends during holding:- Record date 18.07.13 dividend 0.50 per share get dividend INR 302
Record date 31.07.14 dividend 0.50 per share get dividend INR 302 total dividend 604
Total gain from selling plus dividend:- 5051+604=5644
Percentage return:-111.74 %
( Manali petro touch 37.20 on 05.08.2015 so if I use this price 37.20 for profit booking then profit is 349.47% but I use only honest and real examples).
Thanks for the article sir.still manali petroleum is a buy???
ReplyDeleteNo because current year high/low ratio is over 2 (37/13.70) , this stock is re-buy in march 2015 @ 14 but now after twice profit booking we wait year high/low ratio stable below 2, until more downside is remain.
DeleteHello Maheshji,
ReplyDeleteVery good article. Do you hold the stock till it achieves it's fundamental target even if it takes 2-3 year or even more than that or you sell it as soon when you get 20% profit.or as you suggested in your video that use the trailing stop loss and increase it after every 10% increase and hold it till it achieves fundamental target.
Thanks,
Manish