There are some businesses whose underlying nature is such that they don t have any sudden spike in their profits. However at the same time, there is constant growth. The growth could be because of many reasons, it may be because of the fact that penetration of that good or service is very low and over a period of time as it improves, both top and bottom line keep moving upward. In some cases, it could be because of the movement of business from the unorganized sector to the organized sector. It could also be because of the fact that the need is such that if required spending on it cannot be postponed. In the case of diagnostic business, it is all the three. But there is another side to it, how the street is treating these businesses when it comes to valuations. In case of diagnostics, from dizzy heights of valuation in 2021 to today where it is being seen as a sector where there is nothing worth looking at this point of time due to multiple issues. Yes, there are real issues with the b
While the markets have been correcting for some time, the pain of correction has been being felt more in the last three to four weeks. The reason, extremely negative market breadth and that too in the mid-cap segment. Until recently, corrections did not appear to be very obvious because one or the other sector kept witnessing sharp up moves and the whole focus of the market went there. So, sometimes it was railways stocks, sometimes power PSUs which keep the noise levels high. The reality is that corrections come and go, the only thing any investor needs to make sure of is that in any corrective phase, bias when making fresh investment should be toward large cap stocks as there is a possibility that they would see less damage in corrections which are stronger in nature due to global or macro developments. ET screener powered by Refinitiv’s Stock Report Plus lists down quality stocks with high upside potential over the next 12 months, having an average recommendation rating of &ld
In equity markets, whatever precaution one might take, the probability of a mistake of getting stuck with a wrong stock cannot be ruled out. The only difference is that the probability of that goes higher, when stocks are being bought at a time when even bulls don t know why they are so bullish, which was the case till very recently when there was a mad rush to buy mid and small caps. So, mistakes are an integral part of the learning curve of the stock market. But then there are mistakes and silly mistakes, just try to avoid silly mistakes. How ? Stay away from stocks where there is a narrative that this sector will do well because of XYZ reasons or the company will get such and such orders worth this much. There is enough evidence in history to show that more than anything else, checks and balances are most important at a point of time when valuations are high and yes despite the recent correction they are high.
Stock price and dividend yields have an inverse relationship but before this inverse relationship kicks in there is a level of equilibrium. Now this level of equilibrium is a subjective level which moves according to risk free interest rate level which FD provides. But there is another equilibrium level which mathematical equations don t solve. Stocks with reasonable probability of outperforming in a bearish market. The use of the word reasonable brings in the element of subjectivity.
Indian markets will open for trade when the global markets have been in a positive mood. Now it is not every day that one should correlate what has happened in global markets and how the Indian markets have behaved. But at times, these correlations become important because they are able to shed some light on what might happen in near term. In the last few days, the Indian market has been charting its own volatile course with bearish bias even when global markets have been inching higher. But that was probably due to India specific, like advisory on small cap and mid cap funds. But now with a spike in oil prices, does it mean some macro headwinds to which the market is adjusting the prices. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time fram