What shares to buy?
Updated: May 9, 2020
The market Cap of Bombay Stock Exchange traded shares have risen from INR 9 trillion to 12 trillion from 2015 to now. The increase in the cap despite the impact of COVID is because of growth in corporate earnings. The Price-Earning multiple now and in April 2015, reflected in below graph, reveals very little change. Isn't this a testimony of corporate India's good track record?
(move the cursor on the below chart to see the values)
The Price to Book Value ratio is down from 3 to 2.4 during this period. The last two decades has seen the lowest Price Book Value ratio of 2.3 times and highest ratio of 5.4 times. Now is the time to be ready to start investing at every pitfall. While it is not easy to predict the point of nadir, we surely are in proximity.
Below PIE chart reveals our recommended allocation across different sectors
(Move the cursor on the PIE chart to see the classifications and their respective allocation)
The three critical aspects every investor knows but many times don't practice:
1. Diversification - Not taking too much exposure on any single entity, group or industry
2. Investment call - Where to invest should be based on complete understanding
3. Timing investment - Not to get tempted to buy at higher price
Munoth Financial is unveiling the top stocks for potential buys in near future.
Below is our curated list of stocks along with respective recommended price for an investment horizon of 3 years.
Hoping that COVID-19 will take a respite soon and wishing everyone good health & prosperity.
The above recommendations are subject to market risks. Some stock prices may not fall up to our targeted buy rates and some may fall below. The recommendations are based on our 25 years of capital market experience.