While it’s commonly acknowledged that there’s no foolproof strategy for purchasing stocks or investments, it’s often overlooked that selling a stock is an equally formidable challenge. Successful exits demand meticulous research, careful consideration, and a touch of serendipity to secure a profitable position. The commencement of your exit strategy occurs from the very moment you invest, especially when thorough research grounds it, and a rationale promising growth potential underpins it.

Consider this scenario: you’ve acquired shares in XYZ Motors Limited, enticed by their substantial investment in electric vehicles, with an initial purchase price of 400 INR. Now, with the stock soaring to 1000 INR, exiting necessitates assessing various factors, notably whether the share price has reached its full growth potential. Setting aside the preamble, let’s proceed with a few key considerations to bear in mind. It’s important to note that this article predominantly delves into a company’s fundamentals, omitting technical aspects. It’s also worth emphasizing that perfection in strategy is elusive in the stock market; success is the outcome of persistent evaluation, analysis, and unwavering patience. Lastly, there might be 1000 different perspectives associated with exiting from stock investment, but in this article, we’ll delve into 4 as listed below

1. Investment goals to determine the right stocks:

• These are targets for how much money to save and how to invest it to cover a variety of future expenses. It could be saving for a new vehicle purchase or retirement, or starting a child’s college fund. Goals are typically set to be achieved within a certain time frame. (TITAN,2022)

• Investment goal plays a huge role in determining the period and the riskiness of your investment. To illustrate, a person buying a house would prefer going into long-term investments like SIPs. A young 19-year-old whose main goal is to direct his pocket money in the most efficient way possible might find peace in equity investments.

• Riskiness can also be denoted as a function of investment goals, age, and many times income.

• Risk tolerance is the level of risk an investor is willing to take for each investment. Some investors will forgo a significant rate of return to achieve lower risk. For example, U.S. Treasuries are considered risk-free assets as long as they’re held until their maturity or expiration date.

In return, investors are paid a rate of interest. (BEATTIE, 2022)

Now, if we keep on ranting over Investment goals, it would take me another 30 pages to finish just that article, I’ll list a few articles for one to understand the essence of investment goals.

https://www.titan.com/articles/how-to-define-your-investment-goalshttps://www.investopedia.com/managing-wealth/basic-investment-objectives/https://www.investopedia.com/investing/figure-out-your-investment-goals/

2. Fact Finding for stock analysis:

Sona Comstar in-depth analysis and price target

• In the realm of stock and equity investments, one critical aspect is fact-finding. In the hypothetical scenario based on your research (fact-finding) you base your stock purchases on a company’s strategic moves it’s critical to assess how long it will take for these moves to reflect in its share price.

• Take, for instance, the scenario we discussed earlier: an entity, like XYZ Motors Limited, investing heavily in electric vehicles and holding a 30% market share. When all these elements align, you don’t just anticipate or expect a short-term share price boost. This investment serves as a catalyst, propelling the company forward in both the immediate and long term.

• The company’s alignment with industry trends and sustainability, along with its substantial market control, ensures that the investment not only has a positive immediate impact but also secures a promising future. It effectively addresses evolving market demands, safeguarding and potentially enhancing profitability.

• This insight is an imperative component of our exploration into the timing of exiting stock and equity investments. It emphasizes the significance of thorough fact-finding while making investment choices, allowing your investments to adapt and prosper harmoniously with the constantly changing market landscape.

Case Study:

If we take a real-time example rather than the made-up XYZ Motors Limited, we come across a similar situation in the case of Tata Motors. Tata Motors announced an investment of over $2 billion in its electric vehicle (EV) business over the next five years on October 13, 2021, following a fundraising event with private equity firm TPG. Tata Motors is now the market leader in India’s electric vehicle (EV) industry because of its substantial investment in EVs. With 34,000 EVs sold as of the first half of 2023, Tata Motors held a 72% market share. This is within the framework of a market that grew by 137% year over year, with 48,000 EVs sold, or 2.4% of all vehicles sold in India during that time.

Case Study On Borosil Renewables

3. Fundamentals for stock selection:

• The fundamentals of a company refer to the key financial and operational aspects that underpin its performance and value. These fundamentals are used by investors and analysts to evaluate the overall health and potential of a company. Some of the key fundamentals include Revenue, Profitability, cash flow, Debt to Equity, EPS, and Market Capitalization.

• In some cases, there may be situations where the company’s fundamentals start declining. This is when investors should consider reducing the allocation of that stock in their portfolio.

Case Study:

Yes Bank serves as a real-life example of a bank that faced deteriorating fundamentals. The loan portfolio of Yes Bank started to decline due, to an increase in non-performing assets indicating issues with credit quality. As a result of these worsening fundamentals, the Reserve Bank of India (RBI) took control of Yes Bank in March 2020. The RBI implemented a “moratorium” on the bank placing limits on withdrawals and announcing a restructuring plan. This caused concern among depositors. This led to a drop in Yes Bank’s stock price and Investors who held onto Yes Bank stock without taking any notice of its fundamentals would have experienced losses while those who acted quickly could have potentially minimized their losses.

4. Diversification of stocks: refers to the practice of spreading your investments across a range of stocks or securities. This strategy aims to reduce risk and potentially increase returns. It’s a principle, in investment and risk management emphasizing the importance of not putting all your eggs in one basket. When building your stock portfolio, it’s advisable to choose stocks, from industries, sectors, and geographic regions. By doing you can help minimize the risk associated with any industry or market segment underperforming. Now, how is it relevant with respect to selling the stock, usually experienced investors prefer allocating only a certain section of their portfolio to a specific sector keeping in mind the market conditions and trends.

What would a diversified portfolio look like?

➢ Reliance Industries Ltd. (RELIANCE) is a major Indian company that operates in the detail, telecommunications, petrochemical, and refining sectors.

➢ Information technology consulting and services are offered by Infosys Ltd (INFY), a large-cap Indian multinational company.

➢ Known for its financial services, HDFC Bank Ltd. (HDFCBANK) is one of India’s biggest private sector banks.

➢ India’s Tata Motors Ltd. (TATAMOTORS) is a manufacturer of automobiles that also makes commercial vehicles.

➢ Offering a variety of financial services, ICICI Bank Ltd. (ICICIBANK) is another well-known private sector bank in India.

➢ Hindustan Unilever Ltd (HINDUNILVR) an indian consumer goods manufacturer offering a large selection of personal care and household goods.

Disclaimer: Tradealone is using the above-mentioned portfolio as an illustration to describe the previous assertion and does not intend to suggest anything.

Both investing and exiting are based on personal value judgments which one perfects with consistent research to understand the workings of the market. There was never a shortcut to getting rich and profiting every time.

Thank you

Before we discuss D-link, let us see the three important factors that can be used to determine the target price of the stock are

• Future performance of the company
• Fundamental analysis
• Technical analysis

Future demand-supply for the company

D-Link is a global leader connecting people, businesses, and cities with computer networking solutions and technology. The company provides various consumer utility products such as routers, switches, wireless access points, controllers, adapters, cameras, and cloud services.

The router and switch market size was valued at US$ 50.50 billion in 2022. It is expected to grow at a CAGR of 6.3% from 2023 to 2030. As more companies shift to digital technology, the demand for network connectivity will improve drastically. After Covid, when most companies started connecting from home, efficient network connectivity was in demand highly. 5G technology, cloud computing, and Internet-of-things have majorly contributed to networking growth. Also, e-commerce websites from food to retail shopping to grocery shopping are expected to fuel the rapid growth of networking technology around the globe.

So, Yes D-Link and other networking companies are expected to showcase remunerative growth in the following years.

Fundamental analysis of D-link

• The revenue has grown by 29% in FY23 as compared to FY22.
• The net profit saw a drastic increase to Rs.86 Crore, compared to Rs.42 Crore in 2022.
• Very strong annual TTM EPS growth rate
• Effectively increasing RoE as it is using the shareholder’s fund efficiently.
• The company has zero debt
• The company is also using the capital efficiently as we can see a good increase in ROCE compared to previous years
• The PE is 9.6, which indicates the undervaluedness of the stock.
• The stock is highly volatile with a beta of 1.76 and we can see more prominent investors selling the stock recently.

Technical analysis of D-Link

RSI is the relative strength index indicator, which is a momentum indicator used in the technical analysis of stocks. An RSI value of above 30 indicates oversold and above 70 indicates overbought. Let us see where the RSI stands for D-Link

The volume of the stock when it was closing on Friday 28-07-23 was at 475.675K, which was at 707.903K on Thursday and was at 1.317M When the stock was closing last week Friday.

The stock is giving a return of 20% in the last 1 month and 86% in the last 1 year. The company also reached its 52-week high in the past 7 days.

The quarterly results ending June 2023 were made available. The company’s revenue fell by 4% quarter to the quarter ending 30-jun-23. Consolidated PAT increased by 4% using the same period. However total revenue increased by 2% YoY and PAT increases by 29% during the same period. The stock was trading at Rs.309.05/share when it closed on Friday, but anticipating the Q1 results the price target is set for Rs.315/share in the upcoming week. Dopwnside the stock can trade at Rs.298/share.

Visit here to read the comprehensive analysis of D-Link

Introduction 

The two leading stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), both of which are essential to the financial system of the nation. Despite having the same objective of giving investors a transparent and effective platform, they are different in a number of ways.

Historical Background

Asia’s oldest stock exchange, the Bombay Stock Exchange (BSE), has a distinguished history of defining India’s financial environment for more than a century, whereas NSE has been new in the picture. 

BSE

The BSE, which was established in 1875 has a long and storied history, started off using an open outcry method, in which traders transacted directly with one another on the trading floor. 

It has embraced modernisation and technical development over time, switching to screen-based electronic trading in the early 1990s.

NSE

The NSE, founded in 1992, entered the picture as a rival to the BSE’s hegemony. The NSE established electronic trading in India as a pioneer, driven by a mission to promote efficiency, transparency, and investor safety. 

It revolutionised trading by switching to a fully automated platform, which decreased settlement times and did away with the necessity for physical trading floors. 

Ownership and Structure

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) differ fundamentally from one another in terms of ownership and structure

BSE 

The BSE, operates as a mutual organisation, and brokers are also stockholders in the exchange. Brokers participate actively in the governance of the BSE and have a stake in its performance as shareholders. 

This model guarantees a strong sense of ownership and aligns interests, but it may also result in a more focused decision-making process that primarily represents the goals and perspectives of broker-shareholders.

NSE 

The NSE is a shareholder-owned company that is owned by a number of banks, financial institutions, and other market participants. It enables participants from various financial sector segments to influence the exchange’s operations, rules, and long-term goals. 

As a result, the NSE’s decision-making process frequently exhibits a wider variety of viewpoints since shareholders with different interests work together to find common ground on important issues.

Trading Mechanisms

The BSE and NSE both are technically strong, but they have their own differences in this field too. Their trading systems, however, reveal their various approaches to embracing technology.

BSE

The BSE began with an open outcry system, where dealers gathered in person on the trading floor to carry out transactions by shouting out bids and offers. In 1995, it started using the BSE On-Line Trading (BOLT) system. 

The BSE improved its accessibility and efficiency using BOLT, attracting a wider spectrum of investors and assuring smooth order matching and execution.

NSE

The National Exchange for Automated Trading (NEAT) technology, developed by the NSE, is notable for revolutionising the Indian stock markets. It launched the NEAT portal in 1994. 

The NSE’s NEAT system increased trading volumes by eliminating delays brought on by conventional open outcry procedures and a significant reduction in trading time.

Indices

Both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) provide well-known stock market indices that act as important benchmarks for monitoring India’s equities markets. Still, they hold on to their differences in this area too. 

BSE

The Sensex is an established index and is one of India’s first equity indices. The 30 largest and busiest BSE listed companies make up this group. The performance of the Sensex, which both market participants and the media extensively follow, is frequently used as a gauge of the Indian stock market. 

It consists of businesses from many industries, and its makeup is reevaluated on a regular basis to make sure it still reflects current market realities.

NSE

The 50 most liquid and actively traded stocks listed on the NSE make up the diversified index known as the “Nifty 50.” It is intended to accurately reflect the entire market performance and represents numerous economic sectors. 

The selection criteria for the Nifty take into account variables including liquidity, market size, and trading volume to make sure the selected stocks are indicative of the NSE’s larger market.

Product Offerings

Although both stock exchanges enable equities trading, they focus differently on other financial instruments.

BSE

The BSE offers derivatives trading but has historically placed a greater emphasis on debt securities and mutual funds. Bonds, government securities, and other fixed-income instruments can all be traded by investors on the BSE, which has been an important marketplace for debt securities. 

Additionally, by giving investors a venue to readily acquire and sell mutual fund units, the exchange has contributed to the promotion of mutual fund investing. Investors looking for more secure and predictable investment options in the Indian market will benefit from the focus on debt instruments and mutual funds.

NSE

The NSE has paved the way for the promotion and acceptance of derivatives trading in India. It provides a broad selection of derivative products, such as futures and options contracts on a range of underlying assets, including stocks, indices like the Nifty 50, and commodities. These derivatives give investors the chance to protect their positions, make predictions about price changes, and improve trading methods. 

The NSE’s introduction of currency derivatives, such as currency futures and options, also significantly impacted the development of a thriving currency trading market in the nation. This increased the financial environment’s diversity and drew individuals interested in exposure to foreign exchange.

S.No	Basis	BSE	NSE
1	Historical background	established in 1875, with open outcry method	established in 1992, with technically-abled system
2	Ownership and Structure	operates as mutual organisation	Shareholder- owned company
3	Trading mechanisms	Uses BSE On-Line Trading BOLT System	uses NEAT portal
4	Indices	Sensex	Nifty 50
5	Product offerings	Bonds, government securities etc.	Stocks, Nifty 50, etc.

Conclusion 

BSE and NSE, both diverse in a variety of ways because to differences in their histories, ownership, trading methods, etc. Despite these differences, both stock exchanges have the same objective: to give investors a forum to engage with the Indian economy and take advantage of its growing potential. NSE and BSE will continue to be significant engines of investment and economic growth as India’s economy changes.

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