Stay invested in real estate

As the markets opened in the green, it looks like the uptrend is likely to continue. The markets have seen phenomenal moves over the past couple of days, and one of the sectors that has certainly been riding the tide is real estate. As the market sentiment suggests strong buying, experts advise how to trade in the space now.

It makes ample sense to stay invested in sectors like real estate, where the momentum is very strong. Sajiv Dhawan of JV Capital Services says, “Remain invested in real estate; those stocks are booming once again.”

Judging the sector as a whole, the fundamentals are very strong, that’s evident. Dhawan cautions, “Keep your stop losses in.”

“Once you are in that sector there is no looking back, it has been an amazing performer for the last six months to one year,” he affirms.

However, he recommends to go in for top-notch firms first and then diversify into smaller companies in the space.  

Within the space, Dhawan’s favourite picks are Unitech, Ansal, Bombay Dyeing, Indiabulls and Mahindra Gesco.  

He believes that even in the midcap space, real estate has good picks, not only for short-term traders, but also for long-tern investors. 

While Unitech is being recommended, a lot of investors feel that the current valuations are not justified. So from that perspective, Dhawan agrees that it would be difficult for fresh investors to enter the stock now.

On the other hand, he suggests stocks like Mahinder Gesco or Bata for fresh investors. “Look at some other stocks like Mahinder Gesco, which took a big beating and has bounced back very sharply, and some of the indirect plays like Bata. There is a real estate story that might be the next one to pick up.”

Investment advisor PN Vijay shares the general outlook on Unitech. “It is terribly over-valued in terms of P/E multipliers,” he informs.

According to Vijay, the stock is sort of reinventing itself. “With the type of growth and the pan India presence that Unitech is generating, people are looking at that stock seriously.”

“I think it is a fantastic but a very aggressive play,” he adds.

As a safer bet, Vijay recommends Peninsula Land. “The valuations are much more somber and they are in Mumbai where a lot of redevelopment of mill properties is going on at a fast pace. So here the risk is less, the reward may be less, but this is also a good real estate stock,” he informs.

By Crystal Barretto