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Mutual Fund News

ME AND MY MONEY

Special to The Globe and Mail

NILANJAN ROY, 27

Occupation

Financial analyst

The portfolio

Includes Intel Corp., Walt Disney Co., Lenovo Group Ltd., Cogeco Cable Inc. and Yellow Media Ltd.

The investor

Nilanjan Roy has both an MBA in finance and an engineering degree. His "financial modelling and strategic analysis" skills come in handy when assessing investment opportunities. He is particularly interested in the technology, media and telecommunications (TMT) industries, where his work experience has provided him with "a good understanding of TMT business models."

How he invests

Generally, Mr. Roy first picks a sector with a favourable macroeconomic trend or two.

Then he screens "for the companies with good fundamentals but trading at a discount to peers."

He reads "annual reports and other news from market-research firms to understand the positioning of the company compared to its peers." Various analyses are also performed, including financial-statement projections and a discounted cash-flow analysis to determine the stock's fair value.

Mr. Roy owns shares in Yellow Media Ltd. Nearly bankrupt a few years ago, it is now emerging "as a strong competitor in the digitalmarketing space under its new CEO." Revenues are still declining because of the printed telephonedirectory business, but its digitalmarketing line is growing strongly and has climbed to more than 50 per cent of total revenues. The company is earning "healthy free cash flows."

Cogeco Cable Inc. is another holding. The introduction of TiVo/Netflix services "is expected to be beneficial in terms of customer retention and average revenue per user." And growth in the enterprise-customer base should result from Cogeco's expansion of its data centre and cloud-computing services.

Best move

"Buying Netflix in early 2012. Having worked for a major U.S. cable company, I understood the trends ... bought at around $110 [U.S.] and exited a year and a half later at $345."

Worst move

"Buying Debenhams, the British retailer, in 2013 ... [the stock] has started only recently to move back up."

Advice

There is more to value investing than finding cheap stocks, says Mr. Roy. An investor must also be able to properly assess the company's turnaround potential.

Want to share your strategies?

E-mail mccolumn@yahoo.com

© 2007 The Globe and Mail. All rights reserved.

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