Stocks for the long and short term portfolio

[Option.Trader]

Need to add more to the list of growth stocks. Rejected three companies this week. Companies that generate Free Cash, with low debt, decent net profit margins, organic growth and such a history are hard to find, low PE and a easily saleable product without need for continuous innovation.

Growth Stocks:
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1) Petronet LNG
2) Gruh Finance
3) HDFC Bank
4) Axis Bank
5) Cummins India
6) Greaves Cotton
7) Gujrat Gas
8) Swaraj Engines
9) Amara Raja

Dear friend, could you put the ideal buy price levels, election time is the ideal time for prime pickings

 

[jamit_05]

Dear friend, could you put the ideal buy price levels, election time is the ideal time for prime pickings

There are two ways:

1) SIP; keep investing a portion every month. In that case price won't matter much, assuming you intend to hold for the long-term (5 yrs plus).

2) To Buy in bulk one will have to wait for sharper corrections. If one is investing all of his savings, then he'd better wait for nifty to touch 52W lows. Let a healthy dose of pessimism affect the market.

 

[jamit_05]

Engineers India Limited is a well managed company. But, its share price will experience a double whammy... first blow has almost already sunk in where it share price has tumbled from ATH of 500+, to a low of 120 and this was due to the industry being cyclical in nature and current it is in the downcycle.

The second blow will come from the fact that EiL is going for an FPO; This will tantamount to equity dilution, which investors do not like. Unless the EPS is growing at a good pace, the share price usually takes a beating.

 

[jamit_05]

Earlier the following stocks were shortlisted for their potential as strong reliable companies that will survive, but currently in severe downcycle.

Cyclical Stocks currently in a downcycle
---------------------------------------
(to be bought in corrections)

1) ACC
2) BHEL
3) Engineers India
4) IDFC
5) Gail
6) Maharashtra Seamless

Out of these IDFC and ACC are private enterprises hence give diversification. ACC is still expensive and has much downside left. However, IDFC has started to look interesting for the following reasons.

1. Its PE is at all time low. Reflecting investor pessimism.
2. Company is making profits every year. It is into the business of lending, which is the group's forte and has a regular flow of income.
3. 3% dividends.
4. Around 15% earnings Yield. Very Nice.
5. Projected Earnings will be stable, not much growth.

I do not expect any impressive returns from it, but only take consolation in the fact that i own stock one company from the HDFC group near its all time low while all others have their share prices in the stratosphere.

 

[gmt900]

Earlier the following stocks were shortlisted for their potential as strong reliable companies that will survive, but currently in severe downcycle.

Cyclical Stocks currently in a downcycle
---------------------------------------
(to be bought in corrections)

1) ACC
2) BHEL
3) Engineers India
4) IDFC
5) Gail
6) Maharashtra SeamlessOut of these IDFC and ACC are private enterprises hence give diversification. ACC is still expensive and has much downside left. However, IDFC has started to look interesting for the following reasons.

1. Its PE is at all time low. Reflecting investor pessimism.
2. Company is making profits every year. It is into the business of lending, which is the group's forte and has a regular flow of income.
3. 3% dividends.
4. Around 15% earnings Yield. Very Nice.
5. Projected Earnings will be stable, not much growth.

I do not expect any impressive returns from it, but only take consolation in the fact that i own stock one company from the HDFC group near its all time low while all others have their share prices in the stratosphere.

I think Maharashtra Seamless too is a private company.

 

[jamit_05]

I think Maharashtra Seamless too is a private company.

Right. Jindals own it.

 

[jamit_05]

Slow Giant.

Investment in CIPLA​

Markets were disappointed with recent results of CIPLA as it was expecting growth in EPS. With last quarter to go, which is the slowest one, they see EPS shrinking to near Rs.17 Per Share for F.Y.2013-14. A decent drop from Rs.19.2

This will inject good amount of pessimism in the share price. Considering an average PE of 19 and EPS of 17, A share price of Rs.325 would be a good purchase price.

 

[blisscapital]

Do you think it is wise to invest in Tata Investment Corporation as per this article in businessline

Basic idea is Its market price is Rs. 390 while the underlying investments are worth over Rs. 800 per share

 

[jamit_05]

Do you think it is wise to invest in Tata Investment Corporation as per this article in businessline

Basic idea is Its market price is Rs. 390 while the underlying investments are worth over Rs. 800 per share

Its growth is tied to the Equity Market. It has nothing special of its own.

If an investor gets cheap stocks that have good management and a brand name, he can do much better. And there are plenty such stocks.

 

[umeshmandal]

I suggest accumulation IDBI Bank for Long term holding. Can be a min. 5X bagger in 5 years.