Stock picks for March

Now that the finance minister has made his move, the stock markets have responded with a crash in prices.  Now, it’s time for us to see if there are any good stock picks in the market.

Large caps:

Punjab national bank: We had recommended to buy PNB at Rs 770 and below in November 2012. The stock then rose to Rs 922.10 on 31st January 2013, giving a profit of approximately 20% in 3 months. The stock is now trading at Rs 788 and can be considered for accumulation again.

BHEL: Another stock that we recommended last time was BHEL. At the current market price of Rs 201, we strongly recommend to buy this stock which is trading at an attractive price for investors who are targeting a high return in the long term.

Sesagoa: This iron ore extracting company is going to be merged with sterlite industries and will widen it’s portfolio to include iron ore, oil, zinc, lead, silver, aluminimum, copper etc. The details of this meger are already known in the market circles. At Rs 153.80, we estimate that the stock is trading at a 60% discount compared to the value it’s going to create when the merger formalities will be completed.

NMDC: the giant iron ore extracting company currently trades at Rs 138.00. The iron ore industry is cyclic in nature and reduced demand for iron ore especially from huge markets like china has resulted in this stock trading well below its actual worth. At the current rate, we estimate that NMDC trades at 55% discount and can be considered for long term investments. The cash rich, zero debt company has also made several overseas acquisitions. As the demand for iron will definitely increase in the coming years, this stock is all set to scale highs. We recommend long term investment in NMDC at Rs 138nd below.

GAIL: Another large cap that can be recommended for long term investment is GAIL. There is steady demand for natural gas and the company is a major player in this segment. Looking at the past datas, we observe that the company has been growing at a steady pace although there is some decline in the net profits over that last few years due to debts. At the current market rate of Rs 332, long term investors can start accumulating this stock in declines. The company also aims to carry out heavy expansion plan in the coming years which means that it may resort to more debt funds for financing its capital requirements. This, if done, can further bring down the net profit of the company in the coming years. Another factor to be considered is that this stock is ideal only for long term investment since all it’s projects are long term in nature and the success of such projects may take time to reflect in it’s bottom line.

Midcaps:

Crompton greaves: we had recommended this stock earlier at Rs 113 or below. The stock now trades at Rs 94.25 and can be recommended for investment with a long term point of view.

Indian bank: Indian bank is a public sector bank which falls in the mid cap segment. It has more than 2000 branches and has major presence in south India. It also has overseas branches in Sri Lanka and Singapore. However, the revenues from overseas branches are nothing much to talk about as it represents only approximately 2% of its total revenues. The bank, which is more conservative in nature of operations, has been growing steadily in the past. At Rs 174, the stock is an attractive investment. Further declines are possible but will not be a use of worry since it’s trading at an estimated discount of 40%. The stock has the potential to move up to Rs 290 in the medium term.

Small cap:

JBF industries: JBF is the market leader in polyester chip manufacturing and supply. It manufactures a wide variety of polyester chips used in textiles, bottle, films etc. the company has so far grown at a fast pace and is poised to become the only company with a diversified portfolio in polyester chip manufacturing. Apart from its manufacturing facilities in India, it also has a manufacturing unit in UAE and it has also plans to setup a unit in Belgium by the end of 2014. When all these come together, the future of the company looks bright. However, since a lot of capital expenditure is being incurred, the company meets these requirements by raising huge debts. Increasing debts will affect the bottom line of the company and it may take some time for the company to pay off its debts. At the current market rate of Rs 105.50, the stock looks attractive for long term investment. It’s a small cap and hence, all those risks that come attached to small caps are applicable here too.

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18 Responses to “Stock picks for March”

Mansoor

March 2, 2013 at 12:44 am

Thanks for your views on a variety of stocks and recommendation. You have picked some of the fundamentally sound businesses. How do you ensure that we are not getting into a value trap with Crompton greaves or any other company?

Gurwant singh

March 2, 2013 at 6:03 am

Thank you for sharing the information about stocks.

S G S Nair

March 2, 2013 at 9:18 am

HEy Jins!! Query on AADHAR VENTURES, i bought 100k shares fr .98Rs and exited at 1.18 Rs again accumulated at .97Rs , What is ur veiw point on this stock?

J Victor

March 4, 2013 at 8:22 am

dear SGS Nair, I have not analysed this stock. This is a penny stock and i don’t really support investing in penny stocks because they are generally risky in nature.

J Victor

March 4, 2013 at 8:32 am

@ Gurwant singh , @mansoor – thankyou !!

Vipul

March 4, 2013 at 10:52 am

India is currently paying very hign intrest (@ 8.5%) on both NRI and domestic FDs. This in contrast with very low intrest rate in developed countries (close to 0% in USA).
How do you see this will impact on INR exchange rate.

Shahhaji

March 4, 2013 at 11:53 am

Hello Jins,

Thank you Very much.

I am a new in share market I have read all your massages on your website and It has very helpful to me to learn about market .

Thanks a lot…

Shahaji

March 4, 2013 at 11:57 am

Hello Jins,

What is your opinion on SBI

J Victor

March 10, 2013 at 11:25 am

Hi , read about our view of SBI in this link

J Victor

March 10, 2013 at 11:38 am

@ Vipul,

Other things remaining the same, increase in interest rates in one country will increase the exchange rate of that currency.
However, interest rate is not the only factor that decides where the money would flow. Apart from interest rates, the interplay of factors such as Inflation, political stability, international risk rating, balance of payment position will all decide how the currency rate moves.

S G S Nair

March 14, 2013 at 9:32 am

Hi jins wats ur opinion for MMTC for this fY 13-14 ??? can i invest it in current levels of 308 ??

Chaitanya

March 20, 2013 at 8:24 am

Mr. Victor, why do you think is the BHEL share(LTP 185.8) getting hammered in the market? when do you expect it to bounce back? Is it still advisable to accumulate them?

rajeev choudhary

April 6, 2014 at 11:23 am

No post from you for long time in investment ideas section?

J Victor

April 7, 2014 at 7:42 am

AHi..the site is up for a revamp. we will soon come up with all the features..

rajeev choudhary

April 7, 2014 at 9:04 am

jins pls suggest me regarding euro.

rajeev choudhary

April 7, 2014 at 9:05 am

recently i bought cairns india@332.5.is it a good decision?

rajeev choudhary

April 7, 2014 at 3:47 pm

wats your view on Dewan housing and southern ispat?

rajeev choudhary

April 14, 2014 at 9:42 am

this section is waiting for your recommendations

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