A Monopoly business unearthed & uncovered
Continue to hold the view that a < 10 stock focused and concentrated portfolio of MNCs in developing countries is likely to outperform all sorts of buy-and-hold investing and small cap investment as a portfolio. Though you may never get 20-30 baggers in 4-5 years as one can make in Kitex Garments, Mayur Uniquoters, TTK, Symphony or Cera, but the limited portfolio weight to small caps reduces the prospects of equivalent gain.
The ones I have mentioned in the past are Unilever Nepal here, Steamships Trading here, Glaxo Bangladesh, Reckitt Benckiser Bangladesh in which I am invested.
I have made a passing reference to Gillette Pakistan at 13 PE. Another nice deal is Coca Cola Nepal at 6% dividend yield. Each one in solo cited above is better than stock indices in other countries and collectively as a garland of dream portfolio, in my opinion, unparalleled in bequeathing investing reputation with peerless glory.
The best for a capitalist and perhaps also controversial by far is Murree Brewery Ltd. based in Pakistan in which am not invested as yet. Reading a bit about it – all the excitement felt by group thinkers and funds alike appears like a Cola without any fizz towards United Spirits. I don’t get the excitement with United Spirits, I won’t buy it at half the current market price. I must be feeling really lucky with alternatives or a simpleton.
Murree Brewery is a legendary company founded in 1861, only company with liquor license in the country since independence with no competition. Mysteriously for capitalists also happens to be listed in Stock Exchange. Profits have nearly quadrupled in past four years.
“The Murree Brewery is in an obscure lane off the road that leads to Army House, an imposing Victorian building that is the official home of Pakistan’s Chief of General Staff”
“If you are non-Muslim Pakistani in Punjab and have a permit, you are allowed to buy six bottles of whisky or one case of beer per month. (‘Not enough,’ jokes the company’s technical manager, Fakher Mahmood.) Given that the company produces some 820 million half-litre bottles of beer, whisky, vodka, brandy and other alcoholic drinks per annum – and that those minorities make up less than five per cent of Pakistan’s 170 million people, those Christians, Sikhs, Hindus, Buddhists, Parsees and pagan animists would have to be consuming more than 90 bottles per person per year, man, woman and child.”
“Few distilleries in the world, even the high-end ones in Scotland, produce 20-year-old malts,” said Minnoo Bhandara, the Parsee businessman whose family has run the Murree Brewery since the creation of Pakistan at the partition of British India in 1947.”
Perhaps some of you get an inkling why I feel in a Louis Vuitton showroom when I look at Sensex and the dross listed there, well not really detritus, I do like Hindustan Unilever and Nestle India and it will be attractive at 1/3rd their current market price relative to opportunities. Murree Breweries Ltd. has given bonus shares in the past 5 out of 7 years, has tripled in past 12 months and is still available at 9 times annual earnings. Did I say monopoly ?