Indian Markets have rallied a great deal and it is time to pick stocks that can create value. Here are a list of stocks that have great value from a long term perspective.
GIC Housing is one of the cheapest housing stocks in the country. The shares are trading at a p/e of just 10 times one year forward earnings as compared to other companies, where the p/e is as high as 20 times. The sector itself is growing at 20% and there is no reason why GIC should grow at a lesser pace. If you give the stock a decent valuation of 15 times, the stock should give you a near 50 per cent return. The dividend yield also at 2 per cent is pretty decent. A good value pick from a long term perspective. Check stock quote of GIC Housing
Shares in Coal India have fallen ever since the stock went ex dividend. The stock has fallen from levels of Rs 322 recently to the current price of Rs 292 in juts a few days. The shares of the company have gone ex dividend for Rs 18.50 per share. This means you would now get the dividend sometime next year. However, even if you assume that the company maintains the same dividend your yield would be close to 7 per cent, if you can buy the stock around the Rs 285 levels. The company's business has very less risk and it is also a debt free company. A good value pick from the long term. Check stock quote of Coal India here
We think that Union Bank has value because of a number of reasons. Today, it is impossible to create a franchisee as large as Union Bank for a new full-fledged bank. The stock is trading below its book value and there is a high possibility that in the next one year or so, NPAs would start falling as growth in the economy picks-up. PSU banking stocks which are saddled with NPAs would be one of the biggest beneficiaries of such a growth. However, in the immediate short term all would depend on how the monsoon progresses in India. From a 2-3 year perspective this stock should not be a bad bet. Check stock quote of Union Bank here
Tata Motors DVR
The Tata Motors DVR is trading much lower at Rs 271 compared to the stock price of Rs 468. The only difference between a DVR and a share is that DVRs have lesser voting rights. But, many investors are least interested and hardly attend AGMs. Tata Motors DVR also entitles you to an extra dividend of 5 per cent when compared to equity shares. So, if you want to look at purchasing the Tata Motors stock go for the DVR. The shares of the company have fallen a great deal recently due to a poor set of results. However, we believe that a spate of new launches from Jaguar Landrover and robust growth in the US Economy would power the shares ahead. Buy with a long term perspective in mind.
Karnataka Bank is another stock that we like at the current levels. It is amongst the cheapest private sector banking stocks that is presently available. If you have a long term perspective n mind, this is a value stock that you should pick. The p/e ratio for the stock is around 10 times, while the p/e book 0.91, which is much better than larger and smaller private sector banks in the country. With a dividend yield of 3 per cent, the stock is not a bad bet at the current levels. Check stock quote of Karnataka Bank here
Karur Vysya Bank
We like Karur Vysya Bank as a value stock for a number of reasons. The first is that its asset quality is pretty much stable as compared to PSU banks and some other private sector banks. The dividend yield of 3.5 per cent is good and we keep mentioning the same because these days interest rates in the economy have fallen very badly. The stock is not expensive at a p/e ratio of 10 times one year forward earnings. A good stock to buy with a long term objective in mind.
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