There is no dearth of stock market stories about the next HDFC bank or the next Page Industries or the next Dixon Technologies. In the recent IPO boom, this comparison went to the next level – comparing Indian companies with global giants.
But this kind of chasing the next big multi bagger, has seldom yielded rich dividends for investors.
Ask any new CFA pass-out what drives stock returns in the long run and he’ll likely tell you that is earnings, of course! Equity analysts spend many man (and woman) hours on excel sheets, trying to model the future earnings of companies, to identify stocks to bet on.
But if you look at the journey of multi-bagger stocks over any time period, you’ll find that there’s an X factor apart from earnings that drives multi-bagger returns.
A lot goes into making that piece of gold jewellery you see at your jewellers’. Or even the copper that goes into your two-and four-wheelers. The first step starts with mining these metal and mineral ores. The next is to crush the ore lumps into desired sizes and processing them in mills to extract the metal or mineral. This involves a lot of machinery such as crushers, screens and other mineral processing equipment. In mill equipment, there’s a critical component that protects the equipment to ensure longer life, reduce noise as well as downtime, and improve safety.
In the previous update on the outlook for the Nifty 50, we had mentioned the possibility of the Nifty 50 index stabilising for a while before resuming its uptrend as one of the possible scenarios. This scenario has played out. The breakout above the positive trigger level of 17,500 confirmed the bullish case scenario as well. The third point worth highlighting is that the Nifty 50 index did not breach the bearish trigger level of 16,400 mentioned in the previous posts.
This earnings season, the standout performers come from the banking sector. While private banks led the revival in earlier quarters, this time around, performance is visible all round – across leading private banks to old private banks and PSU banks.
There are three reasons why we think investors may be better off looking at other opportunities at present.
If you are a growth subscriber, you will have access to Prime Stocks – which is a list of stock recommendations. When stocks in the list move up in price and it is still in our buy list, many of you have problem identifying the buy price at which you should invest.
GATI is one of the oldest players in the domestic express logistics space with nearly 3 decades of existence. GATI was originally part of the assets of TCI (Transport Corporation of India), which was split between Mahendra Agarwal and his three brothers in 1998….
In the previous update on the Nifty 50 outlook, we had flagged concerns about the overbought breadth in the higher time frame and that the breach of 17,300 would trigger a deeper correction with heightened volatility. This scenario is currently unfolding in the Nifty 50 index.
US stock indices have started a fresh bout of declines. This has led smart investors to ask if they should be bargain-hunting US equities at this juncture. The answer depends on where the US economy and earnings are heading.
This corporate private bank has overcome asset quality issues in the past, gained strength from management transition and looks poised for growth.
Will the Indian IT sector slowdown as a result of a looming recession in the US? This is the question that many of you have asked us on the back of a sharp 32% correction in the Nifty IT index from its peak in January 2022. The next question is whether our ‘buy’ on one of the IT stocks is valid now and whether the same can be accumulated. We will try to answer these questions here.
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