While Taurus Discovery Stock may not be an alchemist, its investment strategy scouts for undervalued
15-Aug-2000 •Research Desk
While Taurus Discovery Stock may not be an alchemist, its investment strategy scouts for undervalued stocks that have the potential to become tomorrow's bluechips. Not surprisingly, this fund falls in the high-risk, high return category since the fund's pick also run the risk of fizzling out. Taurus Discovery Stock (erstwhile Taurus Newshare) was launched in September '94 to invest only in primary equity issues. With the IPO market going bust, the fund faced a steep fall with its NAV languishing at pathetically low levels. Thanks to the sharp upsurge in the market in 1999, which gave a fresh lease of life to the fund, it gained a whopping 73% through 1999 till early 2000. Besides, the fund cleared junk stocks in its portfolio by writing off those investments. In the interim, the fund also changed its investment objective to focus on turnaround stocks and mis-priced issues, when it went open-end in October 1999. However, it was back to square one for the fund, when it lost 61% from its high of Rs 10.81 in the ICE meltdown in early 2000. This is largely attributed to its concentration in mid and small-cap stocks, which lost more than the broad market. The fund's claim to fame is its top holding HFCL, which it picked up in early 1999, when the stock was trading at sub-100 levels. The fund has been a key beneficiary of the steep rise in valuation of HFCL and holds few other stocks with a similar latent potential. The short-term gyration in NAV notwithstanding, the fund holds promise in the long run. Join Taurus Discovery if you believe that this fund manager can pick up the hidden diamonds on the bourses but remember, some of them may just turn out to be lemons!