Want to invest in share market right now? Consider these stocks!

In last few days, indian stock market has seen a lot of buying interest. Sensex and Nifty50 both have seen a recovery or say rally of between 10-15 percent. This is common to see when many stocks are available at very cheap prices.

Source: Yahoo Finance

Many good companies are available for purchasing with a discount ranging from 40-60 percent from their 52 week highs. Whether you want to invest in Tata Group shares, Aditya Birla Group shares, Adani Group or Godrej group shares, you can buy them with a great discount. When you buy a great company having very low share price or is undervalued, you are considered to be doing Value Investing at that point of time.

Here is what is the definition of value investing —

Value investing refers to buying securities that are considered undervalued in the market. Investors using this strategy buy securities for less than their intrinsic value.
Many successful investors, such as Warren Buffet, Tej Kohli, and Peter Lynch, follow and encourage others to do value investing.

However, value investing is not the only reason behind why markets have seen this good recovery from lower levels.

• Some more stimulus packages are expected to be announced by Government soon.
• Lockdown is expected to be lifted much before than many other leading countries.
• In net terms, FIIs have stopped selling in stock market.

Above mentioned reasons are also supporting market a lot. But, one should understand that these reasons are temporary and negative news can dominate these positive news if Covid-19 (coronavirus) picked up a good speed in India too. When negative news will be dominating positive news, market will also not sustain at current levels and may start falling again.

In other words, what i want to tell you is that future of Indian economy is still very uncertain and no one accurately knows how much time our country will take to resume economic activities. Some experts believe that if transmission of covid-19 (coronavirus) has not taken place at community level and is limited to only few, then we can see resume of some economic activity by May/June. But this is just an expectation and no one is 100 percent sure about these things.

But in case, if Government lifted lockdown in May and economy got restored into normal situation very fast, then you may also lose this Great Opportunity! If Covid-19 came in Control and Government started giving relaxations in doing economic activities, nifty will hardly come below 10,000 levels again.

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So, if you start purchasing shares at present and accumulate them at every lower level, it will not be a bad decision.

If you still have not started investing your money in stock market and want to start investing right now, or you are a beginner (who don’t know about which stocks are really good), or want to make more investment right now in those good stocks which can give you some exciting returns in short term, then continue reading.

In last few weeks, many stocks have already given 30-50 percent returns on the back of value investing by big investors and some other reasons. But even after these returns and rally in market, there are some stocks which are available near to their bottom levels and with great discount. This can really provide your capital (hard earned money) a better safety from any profit booking or any decline in market. These stocks are linked to good businesses and belongs to reputated promoters and have strong financials.

If all is perfect, the why these stocks are not rising?

It is possible that these stocks may not have come in the sight of institutional investors and High-Net-Worth individuals yet. Or there may be some other reasons.

If you want to know what or how much value does these stocks provide you, then I can say that these stocks are value for money stocks!

So, what are these stocks?

Here are the names of these stocks and some important financial information of each stock.

Federal Bank

Current Price: 40.65 (14 April)

Market Capital: 8,100 crore

52 weeks High / Low: 110.40 / 35.70

Book Value: 67.74

Stock P/E: 4.84

Dividend Yield: 3.44 %

Target Price: Rs 52/share

State Bank of India

Current Price: 183.50 (14 April)

Market Capital: 163,767 Crore

52 weeks High / Low: 373.80 / 173.55

Book Value: 262.75

Stock P/E: 13.45

Target Price: Rs 240/share

Bombay Stock Exchange (BSE)

Current Price: 330.60 (14 April)

Market Cap: 1,489 Crore

52 weeks High / Low: 648.00 / 275.00

Book Value: 528.79

Stock P/E: 10.06

Dividend Yield: 9.07 %

Target Price: Rs 420/share

Indian Oil Corporation (IOC)

Current Price: 83.15 (14 April)

Market Cap: 78,279 Crore

52 weeks High / Low: 170.75 / 74.45

Book Value: 119.88

Stock P/E: 6.07

Dividend Yield: 5.11 %

Target Price: Rs 102/share

Birla Corporation

Current Price: 439.15 (14 April)

Market Cap: 3,382 Crore

52 weeks High / Low: 807.60 / 389.95

Book Value: 605.22

Stock P/E: 7.71

Dividend Yield: 1.71 %

Target Price: Rs 520/share

As i discussed in the first part of this article, no one exactly knows how the pandemic will affect earnings of Indian companies in the short term. At current levels, these stocks (which I mentioned above) looks cheap as compared to other listed companies and earnings potential, when the economy revives.

Bulk purchasing in this market can be proved very risky for you. So please avoid it.

All the best 🙂