Searching for value in equity markets? Well, chances are you might end up picking up a wrong name just going by historical performance.
The idea behind creating ‘wealth’ is to find companies which can outperform benchmark indices in a Bull Run and contain damage when the equity markets decide to head south.
We have collated a list of top 30 stocks which are common in the portfolio of foreign investors, mutual funds or HNI’s as well as LIC as of the quarter ended June 2017.
As many as 18 stocks outperformed Nifty so far in the year 2017 which include names like PNB, SAIL, Andhra Bank, JK Paper, Godrej Industries, BEML, Reliance Industries, Asian Paints, Godrej Consumer, Garware Polyester etc. among others.
Out 18 stocks 3 stocks more than doubled investors wealth in the same period which includes names like Dewan Housing Finance which rose 147 percent, followed by Chambal Fertilisers which gained 112 percent, and Reliance Capital rose 110 percent in the same period.
Most of the mid and smallcap indices have managed to find their place in the portfolio of FPIs, DIIs as well as LIC amid strong growth prospects. But, a surge of money in these stocks have made valuation look frothy, at least for some if not for all.
These stocks are not recommendations but a reference point for investors to filter their stock portfolio and if they find value then add these trusted names to their portfolio.
Midcap stocks have been consistently outperforming benchmark indices; hence, the portfolio should be a mix of large, mid, and smallcap stocks, suggest experts.
Over the last five years, midcaps have outperformed the Nifty by a whopping 70 percent. Midcaps now trade at a 22 percent premium to the Nifty on a P/E basis, said a report.
The mid and smallcap index hit a fresh record high along with Nifty50 on Tuesday. But, the outcome of the US Fed meet and rising geopolitical tensions capped upside.
The direction of the trend still remains to be on the upside and investors are advised to buy quality stocks on dips, suggest experts. The index could witness a knee-jerk reaction if US Fed turns hawkish or there are geopolitical concerns.
“With huge domestic inflow irrespective of outflow from a foreign investor has built-in confidence in the market to beckon on a standalone basis. However, a major concern on the geopolitical front will still exist, keeping the market under pressure,” Dinesh Rohira, Founder & CEO, 5nance.com told Moneycontrol.
“The long-term trajectory is likely to continue with uptrend with the expectation of growth revival and consumer spending,” he said.
Not all 30 stocks gave positive returns. As many as 5 stocks gave negative returns so far in the year 2017, but the quantum of loss was much lower than gains witnessed in the year.
Stocks which gave negative returns include names like IFCI, GlaxoSmithKline Pharmaceuticals Ltd, Praj Industries, Infosys, and Sarla Performance Fibers.Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.