Value Stock Only Model Portfolio (Methodology Document)

With Yadnya’s Value Model portfolio, we are offering a portfolio built using Long Term Value Investing Strategy. Value investing is a term made popular by Mr Benjamin Graham who is also known as the father of value investing and in recent times by Mr Warren Buffett, CEO of Berkshire Hathaway.  In his 2008 Berkshire Hathaway Chairman’s Letter, Warren Buffett said - “Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we are talking about socks or stocks, I like buying quality merchandise when it is marked down.”

Simply put, it means buying undervalued stocks of companies with strong business models and holding these stocks over a long period. This philosophy has worked wonders for many patient and diligent investors. These are some of the main components of a value portfolio:

For portfolio construction, this Model Portfolio uses primarily fundamental parameters with a hint of technical parameters. These parameters include Price Earnings ratio, Price to Book ratio, Dividend Yield, Debt to Equity, Profit After Tax % growth, Earnings per Share, Beta and trendline analysis of some of these parameters.

Some of the screening criteria used for the portfolios are that the Debt-to-Equity ratio should be low, no pledged shares, Price to Earnings ratio should also be lower than its past highs and the interest coverage ratio should be high as compared to peers in the same sector. For the Banking sector, Gross Non-Performing Assets and Net Interest Margins were important factors that have been utilized for screening stocks.

Please note this model portfolio is suitable for investors with moderate risk tolerance and risk appetite. Typically, to begin investing, we recommend starting with the mutual fund route, wherein you rely on the professional expertise of fund managers for making stock choices for you. After the initial learning curve, we suggest following it up with the Mutual Fund is driven portfolio approach with some percentage of direct stock exposure.

This value portfolio is meant for moderate risk profile investors i.e., investors who are willing to accept periods of moderate market volatility in exchange for the possibility of receiving returns that outpace inflation by a good margin. It is important to have a long-time horizon for moderate-risk profile investors, investing in direct stocks because if there is a severe downturn in the market, an investor will need plenty of time to make up for the decline in value.

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Use of this information is at the users own risk. The Company and its directors, associates and employees will not be liable for any loss or liability incurred to the user due to investments made or decisions taken based on the information provided herein. The investment discussed or views expressed herein may not be suitable for all investors. The users should rely on their own research and analysis and should consult their investment advisors to determine the merit, risks and suitability of recommendation. Past performance is not a guarantee for future performance or future results. Information herein is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The images used may be copyright of the company or third party. As a condition to using the services, the user agrees to the terms of use of the website and the services.

DISCLOSURES UNDER SEBI (RESEARCH ANALYST) REGULATIONS, 2014:
Yadnya Academy Pvt. Ltd. (InvestYadnya) is registered with SEBI under SEBI (Research Analyst) Regulations, 2014 with registration no. INH000008349.

Disclosure with regard to ownership and material conflicts of interest:
1. Neither Research Analyst nor the entity nor his associates or relatives have any financial interest in the subject Company;
2. Neither Research Analyst nor the entity nor its associates or relatives have actual /beneficial ownership of one percent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report or date of public appearance;
3. Neither Research Analyst nor the entity nor its associates or his relatives have any other material conflict of interest at the time of publication of the research report or at the time of public appearance.

Disclosure with regard to receipt of Compensation:
1. The Research Entity and its associates have not received compensation from the subject company in the past twelve months.
2. The subject company is not or was not a client during the twelve months preceding the date of recommendation.