Hello Sir,
Hope you are doing well.
I think you would agree with me that deciding when to Sell a stock is probably 10x more difficult than deciding when to buy.
At least I find selling very difficult because there’s always this fear that I may sell too soon and what if the stock continues rising.
Based on my observation of several stocks which have had decent correction, 1 metric you can add to your checklist to aid sell decision is:
No. of Shareholders data
Below, we will see the example of Waaree Renewables Technologies to see how the above data point can prove to be useful.
Before that, on 4th August, we recommended a Cement stock to Alpha and Alpha + Members
- It’s a well managed Cement company and available at Rs 330-340 cr. per MTPA against replacement cost of ~ Rs 850 cr. per MTPA
- As per ET report, cement industry is going through a phase of consolidation and smaller cement cos. are getting acquired in Rs 700-900 cr. per MTPA range
Update: As on 5th Sep’24, 22 medium/long term stock recommendations are under coverage. Out of the same, 9 are both Positive rated and in the buy zone.
You can get the detailed report on the latest Cement stock and other recommendations by signing up HERE
Waaree Renewables – Number of Shareholders data
Waaree Renewables has been a huge wealth creator over the last 5 years. However, recently, the stock has corrected from the highs of 3,000 odd levels to around 1,450 odd levels, i.e., more than 50% correction.
So, the stock peaked out in May’24. Now, what’s interesting is the shareholding data of the company.
Between Sep’23 and Dec’23, the no. of shareholders of the company increased by 16%; however, between Dec’23 and Mar’24 end, the no. of shareholders increased by 200%. That’s a huge jump.
What is the significance of this data? We believe, such a huge increase in no. of shareholders could signal distribution of shares to smaller shareholders by larger informed shareholders.
Basically, smart money exiting.
In our view, though not fool proof and prone to noise; if you are already contemplating selling a stock because of very high valuations or overheated markets, do check No. of shareholders data as well.
If there’s say 100% + jump in no. of shareholders between 2 quarters and stock has also had huge run up…You may become cautious about your holding.
(End)
Disclaimer: This is not a recommendation to buy/sell Waaree Renewables. The securities quoted are for illustration only and are not recommendatory.
Best Regards,
Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.
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