Paytm stocks lying in my holdings, every time I successfully accumulate more to average out my price, something goes south and the stocks crash. I have patience, and can accumulate some more. Any sound advice?
P.S. Not seeking directions, just some sane advice. I was in a murky situation with PNB a few years ago, and I successfully managed to accumulate and now they are doing handsomely!
Not an expert but here's my take:
- Paytm is trading at 5.5-6x EV/sales
- PayPal is trading at 2.3-2.5x EV/sales
- Both companies are nearing their SAM
- Ignoring Paytm's profitability to adjust for India growth vs US (not perfect assumption but reasonable imo)
= Paytm has ~50% downside
I would cut my losses and exit Paytm
Aaron Lee
Student
10 months ago
What's the rationale for picking PayPal as a comparable for Paytm? Are there business model same?
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What was your thesis for investment and continued trust, if I may ask
Aaron Lee
Stealth
10 months ago
Did see some promise in terms of consistent loan disbursements, streamlining of services on the product (a bit, at least), and addition/growth of user base. Might not be much, but for me, I was possibly hopeful.
From what I have heard second hand from their tech employees, they are struggling to compete with their better funded competitors like gpay and phonepe.
Not sure if there is too much upside in the short term atleast
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There are many stocks such as Polycab, BEL, mazagon dock, CDSL etc., invest in those they are both short + long term purpose.
Very helpful. Could you suggest more?
How find great stocks like this?
Jordon Lee
Student
10 months ago
Keep an eye on platform led scalable companies. The penetration of financial assets is still miniscule compared to other large economies.
These platforms are major enablers to further the penetration
I'm also in a similar situation. Had blindly applied for the IPO without even looking at their valuations or GMP let alone RHP.
My thoughts at that time were that Paytm was kind of pioneer in fin-tech starting from demonetisation when govt indirectly promoted Paytm wallet, and was cashing every opportunity available in the digital space since inception. On top of that Paytm was hiring good talent for tech and business departments, so was confident that smart people would figure things out as I felt they were still innovative - Soundboxes, etc. (Although that doesn't translate to good business, my investments back then were based more on sentiments, evidently)
Since listing as the stock price kept crashing,I've been averaging out as my thesis that they have plenty of revenue streams including a trading platform and potentially can lend money to many small scale businesses was still intact.
While discussing with my one of my friend who works for an investment bank, he said:
"Don't put good money after bad money" which sounded like a golden advice at that time.
From then onwards I stopped pumping money and started to speculate on what they would come up with to make a profitable business. As more and more restrictions from govt came in its way I realised that I awarded too much for the future growth which may or may not even materialise.
I am planning to exit after the current bull run as I am unable to see a clear path to profitability even after 8 quarters and would revisit once they're back to form
Kendall Carmden
Stealth
10 months ago
This, is gold!
Dezi Lee
Stealth
10 months ago
This, is gold!
Not sure what’s the status of your overall portfolio. If it’s green, maybe you can use paytm losses for tax harvesting and exit peacefully.
Jordon Hyrum
Stealth
10 months ago
Quite green. Honestly, of the 20 odd scrips, only this bugger is red, and that's why it's bothering me.
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