Investments in stock exchange alone has the potential to deliver very great profits. While some have great experiencing of profiting out of investments in stocks, many have had bitter experiences. Well the moot question is who is to be blamed for it? Most of the investors lose money or are not consistent in making profits because they have not followed the right practices ever. In this presentation we bring forth parameters which needs consideration before decisions are made for investments.

1. Introduction to Portfolio Management Services
Introduction to investments in stock markets

2. Investments in stock
market has the potential
for earning higher returns
versus investment in any
other asset class.
FACT NOT MYTH

3. However it is seen that many people have lost
considerably in stock markets. And so it is
misconstrued by many to be utmost risky and akin
to gambling.
FACT NOT MYTH

4. The
reason for
their
losses is
mostly
because
they do
not know
to invest
wisely.
FACT NOT MYTH

5. We now share with
you the approach
for wisely investing
and making money.

6. You have
got it right.
You can
profit out
of stock
markets.
FACT NOT MYTH

7. How do you
make wise
investments
?
Answer
A systematic step
by step approach

8. Steps for successful investing….
Step 1
Step 2
Step 3
Step 4
• Filter companies prima facie suitable for investments.
• Identifying companies with maximum potential for increase in share
prices. Simply put, to shortlist where to invest.
• Decide how much & when to invest in which company or sector.
• Continuously follow the market & developments and take corrective
actions as well as decisions on investments & divestments.
It requires subscriptions of fundamental databases, application software's, research reports, business
papers, access to timely quarterly performances, investor presentations for conducting a research on
investments.

9. STOCK SCREENING
Step 1
• Filter all listed entities to create your universe.
• Universe to be reviewed every quarter.
• Parameters to be considered for generating your universe
[all or combination of few based on objectives of your portfolio]
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–
–
–
–
–
–
–
–
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Sales and / or profits: Minimum sales value or profit value [below which investment to be avoided]
Growth: Minimum average growth in sales and / or profits in last 3 to 5 years
Returns: Minimum average returns on capital employed in last 3 to 5 years
Margins: Minimum operating margins [if it is too low ,chances of entity going into red is higher]
Dividend: Minimum dividend yield and / or yardstick looking at dividend payout as a % of profits
Market capitalization: Define corpus allocation between low, medium & high market capitalization
Holdings: Promoter holdings, FII / institutional holdings, pledged shares by promoters
Foreign exchange: net outflows or inflows [can have impact on profits with currency volatility]
Debt / Equity: trend of leverage levels in last 3 to 5 years and impact on future expansions [if any]
Liquidity – Average daily turnover on the exchange [to decide minimum investment in liquid stocks]

10. Identify companies poised for
maximum rise in share price
considering following aspects

11. IDENTIFYING COMPANIES TO INVEST
Step 2
• Objective to dig out companies with higher prospects for rise
in their prices vs. others
• Evaluated on daily basis to gauge opportunities and invest in
them considering many parameters including but not limited to
– Price Earning Multiples chart over last 3 to 5 years. Also consider PE in
comparison to book value. Comparison of PE with revenue and / or
profit growth in recent few quarters.
– Performances in recent few quarters.
– Expectations of performance in next few quarters considering cyclical
nature
of
business,
capacity
expansion,
geographical
expansion, change in trends or consumer demand, effect of
monsoon, Government policies, currency fluctuations & so on.

12. Deciding how much to invest & in
which company

13. DECIDING QUANTUM & TIMING OF
INVESTMENTS
•
•
•
•
Step 3
A balanced approach avoiding too much of concentration or too much of
diversification is essential.
Approach could be based on allocation on basis of sectors, market
capitalization of entities or simply based on rules that define maximum or
minimum investments in any specific company, industry or a business house.
The decision on quantum depends on your liquidity parameters, return
expectations & risk bearing capacities, and estimated tenure of portfolio
engagement.
Decisions for purchasing stocks is to be based on many parameters including
– Forecasted PE multiples for 1 or 2 year time frames [based on forecasted earnings]
– Current market sentiments
– Company specific or industry specific news and its estimated impact on business
Timing the market is the most vital activity. Most of the funds, performing good and
bad hold similar stocks. The entry and exit price makes all the difference.

14. Step 4
Look out for change and take
corrective actions and make
decisions to accumulate, sell or
buy considering any of the
following parameters
Changes in demand of
product, competition, Government policies, costs or
selling price, emergence of new
technology, political
environment, management, future expansion
plans, etc.
REVIEW & COURSE OF ACTIONS

15. BEWARE
There are no
shortcut proven
methods
guaranteeing success.

16. There are two ways to investing –
by self
or
by engaging a Portfolio manager
[even existing investments in securities can be pooled in to open a portfolio
account]
Portfolio Management Service [PMS] provider in India has to be registered with Securities
and Exchange Board of India [SEBI]. Minimum investment required to open a PMS account
is INR 25 Lakhs. Portfolio Manager usually charge a small fee and / or work on small profit
sharing basis.

17. Contact us for more information on our
Portfolio Management services.
Munoth Financial Services Limited (MFSL) incorporated in 1990 is a widely held Public Limited
Company.
MFSL is a Merchant Banker, a member of the National Stock Exchange (NSE), Madras Stock
Exchange (MSE), and Depository Participant (DP) with NSDL and also provides Portfolio
Management Services (PMS). It is registered with Securities and Exchange Board of India (SEBI)
to provide all these services.
MFSL is empanelled with many leading banks and insurance companies for stock broking
business. The company has been associated with over 100 IPO’s. MFSL is the Investment
Managers to Bangalore based Valmark Infra & Realty Trust, a Category II SEBI registered AIF
fund into real estate.
Investments in capital markets are subject to market risks. Please read PMS related documents carefully.
HQ: Munoth Centre, 343 Triplicane High Road, Chennai 600 005.
Landline: +914428591185 | Fax: +914428591189 | Email: info@munothfinancial.com
www.munothfinancial.com