Markets have come crashing down as foreign funds have started pressing sales in frontline stocks. Here are 5 stocks that have become affordable and are fundamentally sound. Take a look at why these stocks could fetch decent returns in the next 1-2 years.
NMDC was recently included in the Nifty group of stocks at the expense of Wipro. The company is a debt free company with cash on books in excess of Rs 19,000 crore. The stock hit a 52-week low on Thursday and is an excellent pick as it looks to buy assets across the globe, due to huge cash in hand. Government owned company with virtual monopoly in iron ore mining.
Punjab and Sind Bank
While there may be concerns with respect to asset quality of PSU banks, Punjab and Sind Bank is available at a price to book value of just 0.41. Very few stocks command so low price to earnings ratio. If you buy the stock at the current rate of Rs 59.55, you are likely to get a tax free dividend yield of almost 7 per cent, assuming the bank declares the same dividend as last year.
Like NMDC, Coal India is a cash rich company with virtually monopoly in coal mining. A government owned mining company, it is unlikely to face regulatory hurdles with respect to mining. The stock is trading almost 11 per cent below its 200 day moving average, which makes it an attractive buy. There are reports that the government will sell stake in the company, which should propel the stock higher.
Many analysts are now recommending Idea Cellular as they feel that a shakeout in the telecom sector is over and the few big players will survive. Also, players are likely to get better opportunities in pricing as competition starts reducing. Regulatory hurdles remain though
Reliance Industries has underperformed the broad indices for many years now. But, analysts are hopeful that increases in gas prices, which is likely could be a big trigger for the stock. There are hopes that the recent tie-up with Reliance Communications and sizeable investments of Rs 1 lakh in the next few years would push the stock higher.