Top 10 expert moneymaking ideas for the short term
If your investment journey coincided with formation of the Narendra Modi-led National Democratic Alliance (NDA) at the Centre, you may be sitting on a tidy profit. As many as 11 stocks has returned over 1,000 percent in the last four years, a number which was hovering near 50 when the Narendra Modi government completed three years in office in 2017.
But you will be surprised to note that the number of stocks that offered multi-bagger returns reduced considerably in just 12 months. If we look at the outperformers in the BSE 500 index, which is considered as the true barometer of the Indian economy, 11 stocks delivered returns in the range of 1,000-2,214 percent. These include: Minda Industries, Avanti Feeds, KEI Industries, Phillips Carbon Black, Indiabulls Ventures, HEG, Aegis Logistics, Tata Metaliks and Capline Point Laboratories.
Moreover, 206 stocks returned over 100-900 percent in the last four years. These include: Bajaj Finance, Venky’s India, APL Apollo Tubes, Sterlite Technologies, V-Mart Retail, Jamna Auto Industries, Bajaj Finserv, Britannia Industries, GHCL and Force Motors.
Indian equities have surged to record highs during four years of the Narendra Modi government. Since May 26, 2014, the day Modi was sworn in as Prime Minister, the benchmark Sensex has risen nearly 40 percent. The Sensex hit a lifetime high of 36,443 in January but since then it has lost nearly 2,000 points. It looks like the momentum which D-Street gathered in 2014 seems to be fizzling out.
"Four years of the Modi government have been a roller-coaster ride with its share of ups and downs. There was a lot of euphoria in the market post Modi’s victory and citizens looked up to him to usher in a wave of change in the country,” Jimeet Modi, Founder & CEO, SAMCO Securities told Moneycontrol.
He added that the performance of the Modi government has been remarkable in terms of planning and execution of some policies, whereas the macroeconomic numbers aren’t all that rosy.
Most stocks that delivered multi-bagger returns belong to the small and midcap space, which witnessed a strong correction in 2018. More than 75 percent stocks in the BSE Midcap space posted negative returns in the last five months.
The question that emerges is whether it makes sense to hold on to stocks that have given stellar returns in the last four years? Well, the maths is not that easy for starters. Experts feel investors should do their own research and stick to sectors that are making the news for the right reasons.
“In the top-down fundamental analysis, the decision of which stock to hold and in which to book profit depends on a number of factors. Looking at the current scenario, FMCG and IT are moving in a secular uptrend by generating alpha, so investors should stay in these two sectors for the longer term,” Ritesh Ashar, Chief Strategy Officer, KIFS Trade Capital, said.
We have collated the views from various experts on some of the stocks that have given exponential returns in the last four years:
Analyst: Jimeet Modi, Founder & CEO, SAMCO Securities & Stock Note
It is a key exporter of shrimp, and has benefited from the rise of shrimp cultivation in India post-2009 and is virtually debt free.
The company has shown consistent profit growth of around 50 percent over the last 5 years and is expected to maintain its leadership position in shrimp business.
HEG is a leading graphite electrode manufacturer in India, rose more than 1200 percent over the last 4 years mainly due to the clamping down on polluting industrial plants in China.
However, the gains from here on could be limited as some Chinese graphite electrode manufacturers have been adding production capacity and the Indian government has imposed an export tariff of 20 percent on electrode manufacturers.
Cyclical stocks like HEG should be sold and book profits as scarcity of graphite will not last forever and sooner or later new capacities will drive down the prices of the end product.
Analyst: Ritesh Ashar Chief Strategy Officer, KIFS Trade Capital
The company’s revenue for Q4FY18 grew by 131.7 percent on a YoY basis and 14.4 percent on QoQ basis. It has recently raised Rs 2,000 crore via preference share sale with an intention of expanding its credit business which will further contribute to the net revenue of the company and looking at the solid fundamentals of the company the returns are expected to be continued in the long run.
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