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Stock Reports Plus, powered by Refinitiv, undertakes detailed company analysis for 4,000+ listed stocks. In addition to detailed company analysis, the report also collates analysts’ forecasts and trend analysis for each component. An average score in Stock Reports Plus is calculated by undertaking quantitative analysis of five key investment tools - earnings, fundamentals, relative valuation, risk and price momentum. ....
Probably the debate on valuations is over or even if it is taking place, the majority has accepted that yes valuations are high but at the same time liquidity is also high which is ensuring that the street is under the control of bulls. Now there is enough historical evidence to show that valuations matter and justifications don t stand the test of time. Now to take care of the valuation factor, investors looking to invest in midcap space should just push the filter levels a bit higher and should look more closely at business and financial parameters before investing. Right from whether the trend in promoters shareholding to dividend track record to what is the debt situation. Some hard work will ensure that when the street gets into a mode of correction, probability and yes only probability of relatively less drawdown in portfolio value. ....
The movement of nifty and sensex needs to be delinked with what has happened in the last quarter and what might happen to mid-cap in the coming quarter. There is no way one can fight with liquidity, if it is going to mid caps and they are moving up irrespective of valuations or quality of stocks one cannot argue. But the only thing which as an investor one can do is to be careful when taking exposure to this segment of the market. Stay away from stocks where there is a narrative that this sector will do well because of XYZ reasons. At this point of time there is no dearth of tips floating in whatsapp group and telegram channels. But there is enough evidence in history to show that more than anything else, it is time to use checks and balances while making investment decisions. ....
For all those investors whose portfolio is titled in favour of the mid-caps need to do two things in current market conditions. First, don t extrapolate what has happened in the last one quarter to the mid caps stocks. Second, which is more important, be careful when taking fresh exposure to this segment of the market and apply checks and balances when investing and even after that be ready for some drawdown in the value of the stocks. How does one put checks and balances? Simple, have a look at fundamentals and it is not very tough, having a look at some of the critical ratios like ROE and ROCE would help in avoiding silly mistakes which are common in bullish markets. ....
While at this point of time, there are many reasons to be bullish. Right from the result of state elections to GDP numbers to trends in oil prices to US bond yields. However in bullish times there is just one reason to be cautious and that is valuations. At a time when stocks of companies which are under insolvency and where the bottomline has been in red for ages are flying as if there is no tomorrow. So while being bullish don t forget the fact that at the end of the day, fundamental matters and especially when one is looking to take exposure in mid-cap stocks, have more checks and balances by putting more filters. ET screener powered by Refinitiv’s Stock Report Plus applies different algorithms & filters to all BSE and NSE stocks, and lists stocks which fulfill the various criteria as specified into the algorithms & filters to find those which might help navigate the stock market. ....