Monday, January 2, 2012

Top Midcap and Smallcap Picks for 2015

Midcaps are normally stocks that have market capitalization less than 10000 crores. These stocks are quite attractive mainly because they are the most growing companies. Technically the most upward moving stocks are found in the midcap universe.

Mcap ideas for 2015 target

Stock Current Market Price Market Cap in Crores 52 Wk High/Lows
3M India  3450.3 3875 4900.00 / 3100.00
Biocon  274.05 5475 430.50 / 240.10
City Union Bank 42.55 1730 50.80 / 34.85
CRISIL  864.95 6151 976.90 / 560.00
Mahindra Holidays and Resorts 289.6 2437 574.00 / 333.10
Page Industries  2400.15 2677 2784.00 / 1273.05
Sintex Ind  65.2 1778 195.00 / 54.60
Supreme Ind  177 2423 245.10 / 138.00
Tata Chemicals  308.85 7857 411.85 / 287.00
United Phos  127 5864 175.75 / 120.00
VIP Industries  77.5 1098 205.00 / 73.50

Small Caps are companies that have market cap upto 2500 Crores. These may be newly listed companies or small firms. They have tremendous upside potential. Since the stature of the firm is small they also tend to be highly volatile, hence there is heavy risk of loss of capital too.

Top Small Cap Picks for 2015 target

Stock Current Market Price Market Cap in Crores 52 Wk High/Lows
Alembic  14.1 659 77.90 / 13.45
Eveready Ind  23 167 61.00 / 22.05
Everonn Edu  336.9 650 723.90 / 227.25
Finolex Ind  45.55 563 107.40 / 42.00
Greenply Ind  145.5 354 255.00 / 143.00
Nilkamal  185.85 280 388.95 / 180.00
Tata Coffee  761.75 1421 1026.90 / 455.00
Tata Sponge Iro  235.6 362 409.00 / 232.15
Texmaco  24.5 310 55.30 / 20.50
V-Guard Ind  156.2 465 240.25 / 139.00

Saturday, June 25, 2011

what basic 2 things you need to know before picking up a stock..

How would we know what is the best share to pick? The answer would be another question - Do you intend to make money immediately or you plan an investment? Most things in capital markets are quite simple rather than taking this obnoxious decision. This is where our financial strategy comes handy.
Basically we need to look at 2 things before buying a stock -
  • How good the company is?
  • How good the stock is?
When you analyze the goodness of a company its called as Fundamental Analysis, our focus would be long term investment and not quick bucks earnings. When we critique the CMP (current market price) of the stock its called Technical Analysis, our focus would be immediate return on investment due to fluctuation in CMP.
            Lets try to simplify the fundamental and technical analysis so that amateurs like us can also start participating in capital markets. The best thing I would say is to form the strategy (long term or short term) after realizing the difference between fundamental and technical analysis.
Fundamental Analysis (FA) -  Study of the factors that make or break a company's good run. FA are derived from the firm's Y-O-Y or Q-O-Q results. The main things we look here are 
  • Turnover - The gross output/sales generated by the firm. The turnover should be showing a growth trend.
  • Operating Profit Percentage - This is the ratio of the gross profit to the turnover. The OPP should be growing.
  • Earnings Per Share (EPS) - The ratio of profit to the total number of shares. This gives the value of what profits the firm was able to generate per each share held.
  • Price Earnings (P/E) - This is the ratio of CMP to the EPS. This also indicates how well the company is placed among its peers. Higher P/E means the company is on a good growth track and enjoys a good share of the business among its peers.
Most of these ratios or numbers would indicate how strong the company is. All these numbers are quite important to assess the quality of the company. Normally a good running company continues to run good unless spoiled by non-existent influences.

Technical Analysis (TA) - TA on the other hand gives a quite strong indication on how well placed the price of a stock is, what are its immediate trends like and whether you would like to BUY/SHORT it immediately. It mostly deals with the momentum of the stock and whether the trend is bullish/bearish
Few things that make up the TA are.
  • Resistance and Support Index - Resistance is the upper oscillating point of share price which if not broken would not allow to share to sustain the bullish trend. Support would be lower oscillating point which sustains the share price not falling into a bearish trend.
  • Moving Averages - This over a period say 5, 20, 50, 100, 200 etc that shows the price of the share. The share normally sticks with its price on these periods. If it shows a deviation, it indicates a trend would have emerged.
There are lot of momentum indicators as well that complement the TA. This could predict whether the trend is continual or reversing.
Now we would have got a basic insight into the FA and TA. The next best thing to do is to create your strategy and then select the analysis method. Use it to your advantage and maximize your returns

Saturday, June 18, 2011

why would you want to invest in stock markets in the first place...

Before asking yourselves on what all needs to be known to make a successful investment, you bet you get the answer to why you want to invest in the stock market?  Until and unless you have the answer to the 'why' - you never gonna make a fortune out of your investments in equity.
Investments are something that help you create assets. Assets are something that gets you money on a recurring basis. We would be financially independent if we have more of assets than liability i.e. if we have more source of earnings than source of expense.
Now if we know investments create assets, we need to know what all kind of investments are possible and what are the associated risks with it. 
  1. The easiest way to keep aside some money for later use is through savings i.e savings account with bank. This might yield you returns upto 4%. Which means 1 lakh invested would turn 1.04 lakh next year.
  2. People dont find it difficult investing in bank fixed deposits FDs. This can provide return upto 10%.
  3. Investing in gold is not a bad idea either. We somehow feel the gold prices would never come down. This has given a consistent 7.5% return over the last 30 years.
  4. Fortunately few identify long term bonds and government securities and invest in them for long periods of time. This has returned over 12% value on investment from 1980's.
  5. Investment into equities becomes the best choice since its return is as fascinating as 18% from 80's.
  6. Real estate would be the winner in terms of ROI, but we need to know the disposable money we need to have to buy some land. 
Like most of you I too am an employee. So given these options, what priority would I assign into each mode of investment? Always I need to keep in mind, my investments should return me more than what inflation treats it. Inflation being at 8% would more likely rule out option 1 and 2. Investing in gold might turn risky as it may have storage hazards, moreover its return over a broad period isnt attractive as well. Its definitely better if we go with options 4 and 5 to begin with and later do well with option 6. 
If we can keep aside 1000 rupees every month, then investing into selected stocks are definitely bound to give excellent returns. There are no better means to save for future with the low disposable income we have. Over a long term perspective you might not regret putting your hard earned money into capital market. So its all the 'why?' that needs to be ringing alarm in your ears.
Get your gear ready, because we are going to learn together on how to make successful investments.. watch out this space for more.

Thursday, May 5, 2011

never was i more excited about stock markets...

I think it was when i just finished schooling that my Father and Mother sat around me and gave me some useful tips to succeed in life. Of the many thing that they told me, i particularly remember what my father told about stock markets. He said stock markets are like buying lotteries - you win at the cost of someone else's loss. I really made note of that statement and walked away unsure on how to react.
It might be because of that seed of thought implanted in me that i quit searching for any real answers on what stock markets are esp when all my room mates back at college and at working hostel were crazy about stocks. The major reason why i kept away from any numbers were mostly attributed to this fact as well. I kept saying to myself that i am very bad at numbers and i kept piling up all those finance related stuffs like ITR, income tax investments, NSC and FD's to my father. I really did not poke my nose into any financial numbers for my first 3 ITR's and now things have changed quite a bit.
I assume it was when my marriage was round the corner that i really thought about money and financial planning. It might be quite humorous to speak out that i almost washed out all my savings during the marriage phase. Somehow or other i kept searching on how to begin a savings program and plan for future ahead. That was the magical moment i learned about how to invest in stock markets. 
Now after spending some quality time every day on stocks, i feel my life has got some more meaning. The more i tried to learn, the more complicated my learning became. Earlier i kept thinking, i could learn everything about stocks say in about 2 months. Now i feel 20 years wont get me any closer to real knowledge. However i feel proud that atleast i started learning something....