The performance of Marcellus’ CCP portfolio over the past 12 months has been fully supported by fundamentals. The CCP stocks have seen more than 30% YoY growth in profits during 3QFY20 and 9MFY20 vs 28% portfolio performance since 1st April 2019. In fact, CCP stocks have seen more than 20% annualized growth in profits over […]
After falling by about 39% from its January 2018 peak to its August 2019 trough, the BSE Smallcap index has since returned 22%. This rebound has been fairly broad-based with >70% of the BSE Smallcap stocks giving positive returns. However, this rally does not seem to be backed by any meaningful improvement in the underlying macros and […]
The most sustainable way for a firm to compound profits over the longer term, is to sustain high ROCE alongside a high rate of capital reinvestment. However, such businesses face the challenge of consistently finding avenues for incremental capital redeployment in areas which deliver high ROCE. Some of the most common capital allocation mistakes made […]
Given that each year 60 companies enter the BSE500, there are indeed strong economic drivers which help well run small firms explode into prominence. From an investors’ viewpoint, in the three-year run-up to entering the BSE500, new entrants outperform the index by a CAGR of 40%, indicating significant return opportunity before these stocks are discovered […]
An investor looking to buy and hold stocks over a long time period, needs to be able to differentiate between businesses which can deliver longevity of consistently healthy free cashflows and those that run a high degree of uncertainty in their fundamental prospects. This differentiation is essential, both, in order to avoid premature exits from […]
45% of the stocks which were in the BSE500 ten years ago have exited the index since. The primary driver of these exits is shoddy corporate governance and poor capital allocation (the two are linked). In contrast, the number of companies which have significantly enriched their shareholders are a handful. Inspired by Howard Schilit’s legendary […]
Marcellus’ Consistent Compounders Portfolio consists of companies which have already delivered consistently healthy growth in their fundamentals over the past decade or longer, and where we expect the firms to deliver consistent compounding over the next decade as well. However, given the long and consistent historical track record of these companies, some investors are concerned […]
‘Niche’ focused players have been the biggest wealth creators in India over the past decade thanks to superlative earnings growth and high return on capital. Given this background, it makes sense to identity & invest in such companies, more so when such companies are relatively ‘unknown’ in the stockmarket. We find German Management Guru Hermann […]
Great lenders (banks as well as NBFCs), which are Consistent Compounders, benefit significantly in the aftermath of a financial crisis. This is because: (a) when the competition struggles to raise funds during & after a crisis, great lenders have access to adequate liquidity; and (b) as competition’s ability to lend reduces, great lenders can […]
Given that each year 60 companies enter the BSE500, we can see that there are certain economic drivers which are helping well run small firms explode into prominence. From an investors’ viewpoint, in the three years run-up to entering the BSE500, new entrants outperform the index at a CAGR of as much as 40%, indicating […]
The superficial approach of choosing winners from the recently announced tax rate cuts, is to look for companies paying the highest rate of tax and then expect a 10-15% increase in their profits. Instead, the real winners will be determined by the ability of a company to either: (a)reinvest the incremental cash flows back into […]
Marcellus’ Consistent Compounders portfolio has shown resilience since inception in 2018. This resilience is not uncommon for share prices of great companies. Over the past 2 decades, in stock market crashes,stocks like Asian Paints and HDFC Bank have, more often than not, delivered positive and healthy returns.More importantly, in the few instances that these stocks […]
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