Small cap stocks have been on a roll in the last few weeks and you have to really find some good quality stocks available at attractive prices. In fact, there are still some pockets that are under priced and where you can find value. Take a look at few stocks, where you can make money from a more long term perspective.
If there is one stock that is undervalued on most parameters, it has to be Century Enka. The company is a part of the B K Birla Group and manufacturers products like Polyester Filament Yarn, Nylon Filament Yarn, Polyester POY, Polyester and Nylon Chips of industrial and fabric grade and Nylon Industrial Yarn and Nylon Tyre Cord Fabrics.
The company is trading at just 0.8 times, price to book value. For the quarter ending June 30, 2016 the company reported an EPS of Rs 10 and did exceptionally well. For the fully year, the company can report an EPS of Rs 40, which takes the p/e to just 7.
At a price of Rs 274, the stock is a good long term pick.
Apart from this, the company gives you a solid dividend of Rs 7.5 per share. Among the best small cap stocks to buy.
Everest Industries manufacturers a host of products that use cement and cement fibres products that find applications in a number of things like roofings, ceilings, walls, floorings etc. The company is a very old company with a presence of almost 80 years in the country.
It has been a consistently strong dividend paying company and declared a dividend of 50% last year. The company reported an EPS of Rs 7.5 for the quarter ending June 30, 2016. Even if does an EPS of Rs 30 for 2016-17 times, the stock is trading at a p/e of under 10 times.
The price to book is also attractive at around 1 times. Investors with patience can earn decent returns, if they hold onto this undervalued stock. You get a cool dividend yield of near 2 per cent, if you buy the stock.
Everest Industries currently trades at a price of Rs 271 on the NSE.
IFGL Refractories is a manufacturer of Specialised Refractories and requisite Operating Systems for Iron and Steel Industry. The company has a small equity capital of just Rs 34 crores. The promoters shareholding is pretty large and there are no shares that are pledged.
The company has had some excellent technical collaboration, which has helped it to grow itself. For the quarter ending June 30, 2016, the company reported an EPS of nearly Rs 2. The company can report an EPS of Rs 10, which should take the p/e to just 15 times, one year forward earnings. The shares of IFGL remain among the best small cap stocks to buy at the current levels of Rs 145.
The company has been declaring regular dividend and declared a dividend of 20%.
This is a high risk trade, for those who have a penchant for risk. We wish to emphasize that this may not be the best of fundamentally strong small cap companies. In fact, the company has a high level of debt on its books. However, we are recommending the stock for a number of other reasons.
The first is that the net profit of Gitanjali Gems rose 188.15% to Rs 57.40 crore in the quarter ended June 2016 as against Rs 19.92 crore during the previous quarter. The company managed to reduce financial charges dramatically, which means it has started paying-off debts.
The company is an authorised DTC Sightholder. A Sightholder is a company on the De Beers Global Sightholder Sales's (DBGSS) list of authorized bulk purchasers of rough diamonds.
The company owns brands like Asmi, Gili and Sangini.
On Friday, the shares of Gitanjali surged a staggering 15 per cent to end at Rs 83, which was also a new 52-week high. The company can report an EPS of Rs 10 for FY 2016-17, which will leave the stock trading at a p/e of just 10 times one year forward earnings.
JMC Projects has a small equity capital of Rs 33 crores.
The company currently has sizeable orders on hand. We believe that the government's emphasis on infra development is likely to benefit companies like JMC Projects tremendously.
The company has been doing well lately and reported an EPS of Rs 3.2 for the quarter ending June 30, 2016. This makes the shares a good bet at the current levels of Rs 250. We believe that the company can report an EPS of close to Rs 18 for 2017-18. This will take the p/e to just under 14 times.
A good order book position and a comfortable debt to equity make JMC Projects among the better stocks to own at Rs 250.
Ganesh Housing has been consistently been paying good dividend and reporting decent profits. The share price of the company have dipped from levels of Rs 143 to the current levels of Rs 73.50. In fact, the share price is now very close to 52-week low levels of Rs 70.
The company recently paid a dividend of 20% per share. The dividend yield itself translates to a yield of almost 3 per cent.
Good stock to buy keeping a long term perspective in mind, if you want to buy a stock in the real estate business.
Jindal Polyfilms is India's largest producer of PET film and BOPP films. JPFL entered the metallizing business in 2003 and also has India's largest Metallizing capacity.
This stock we believe is again a small cap stock that is undervalued. For the quarter ending June 30, 2016, the company reported an EPS of near Rs 10. For the full year even if it does an EPS of Rs 40, the stock remains undervalued at Rs 417. In fact, the price to book at 0.72, leaves the stock undervalued at current levels.
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