Summary of "Warren Buffett Strategy : Find Value Stocks Easily with FREE Screener | Sanjay Kathuria"

Warren Buffett Strategy: Find Value Stocks Easily with FREE Screener | Sanjay Kathuria

Key Finance-Specific Content

Investment Strategy Discussed

Value Investing Thesis inspired by Warren Buffett’s approach.
Focus on finding fundamentally strong value stocks in the Indian market using a systematic screener.
Emphasis on knowing why you own a stock, aligning with Peter Lynch’s philosophy.
Use of promoter (insider) buying as a key indicator of value—if insiders are buying shares quarter-on-quarter, it signals confidence and potential undervaluation.
Avoid reliance solely on traditional multiples like PE because they look at past earnings, which may not reflect current value.

Methodology / Step-by-Step Framework for Screener Setup

Promoter Holding Change: Select stocks where promoter holding has increased quarter-on-quarter (change > 0).
Sales Growth: Check 5-year sales growth, requiring consistent growth (around 15% per annum, aligned with nominal GDP growth ~12%).
Profit Growth: Require 5-year profit growth of at least 15% per annum, plus profit growth in the last year to ensure consistency.
Price Relative to 52-Week High: Select stocks trading at least 10-15% below their 52-week high to find potential value opportunities.
Market Capitalization Filter: Optionally filter stocks with market cap above ₹1000 crore to reduce risk.
Equal Weight Allocation: In backtesting, equal allocation across all selected stocks (e.g., 10 stocks = 10% each).
Portfolio Rebalancing: Suggested holding period of at least 12 months before rebalancing, to allow compounding and reduce churn.
Backtesting: Use backtesting over 5-12 years to validate strategy performance relative to benchmarks like Nifty 500 or Small Cap 250.

Performance Metrics & Results

Hypothetical investment of ₹1 crore starting September 1, 2021.
Portfolio based on this screener grew 4.25 times (~₹4.25 crore) over approximately 4 years.
Benchmark (Nifty 500) returned 62% (₹1 crore to ₹1.62 crore) in the same period.
Portfolio beta: 0.95 (indicating slightly less risk than the market).
Sharpe ratio: >1 (indicating good risk-adjusted returns).
Low churn portfolio (annual rebalancing) outperformed portfolios with frequent trading, echoing the “Coffee Can” investing concept.

Tools & Platforms Mentioned

Sharply: A stock screener platform used to apply filters and backtest strategies.
Market Watch by UPS (Upsearch): A news alert platform that delivers company-specific news within 5 seconds via WhatsApp or email, helping retail investors react faster to market-moving news.
Offers a free 5-day trial and a 20% discount (coupon code: S20) for 3-month and 12-month plans (₹7500 for 12 months, discounted to ₹4799).

Market Context & Insights

Indian markets have been mostly in a bull run, making value investing challenging due to inflation in stock prices.
Promoter selling peaked in 2023-24, indicating market overvaluation at that time.
Currently, promoter buying is increasing, signaling a potential shift to undervaluation or fair valuation.
Value investing opportunities are more likely in fundamentally strong stocks that have not yet rallied.
Importance of patience and avoiding frequent portfolio churn to maximize compounding benefits.

Stocks & Sectors Highlighted (Examples from Screener Output)

Blue Star Company (Industrial sector)
KDL (Textiles/Industrial)
Genex (Pharma/Healthcare)
Finance Awas Finance (Financials) – notable 22% promoter buying
Godrej Properties (Real Estate)
Monarch Networth Capital (Financial services)

Market caps range from ₹200 crore to several thousand crores, with a focus on mid-caps and small-caps for value.

Recommendations & Cautions

No direct stock recommendations provided; users encouraged to research and paper trade.
Use backtesting to validate any strategy before real investing.
Maintain a long-term horizon (at least one year) to allow compounding.
Stay updated with news to react promptly but avoid knee-jerk reactions.
Use portfolio allocation and rebalancing to manage risk.
The video is educational and not financial advice.

Next Steps / Upcoming Content

Next video planned on Growth at Reasonable Price (GARP) strategy, another Buffett-inspired approach.
Viewers encouraged to comment “GARP” to request that video.

Presenters / Sources

Sanjay Kathuria – Host, Fundamentals series.
Kunal – Founder of Upsearch (UPS), CFA, expert on screeners and financial education.

Summary

This video teaches a Buffett-inspired value investing framework tailored for the Indian market using a free screener tool (Sharply). The methodology centers on insider buying, consistent sales and profit growth over 5 years, and stocks trading below their 52-week highs. Backtesting shows strong outperformance versus the Nifty 500 benchmark with lower risk and higher Sharpe ratio.

The discussion also highlights the importance of low churn, staying updated with real-time news via Market Watch by UPS, and disciplined portfolio construction. No direct recommendations are given; viewers are advised to do their own research and paper trading before investing.