3 Stocks That You Should Buy & Not Ignore In A Falling Market

It's been extremely hard in the last few weeks for investors who have put money in small and midcaps. Several of them have just collapsed, include the recent digital tech favorities like Zomato, Policy Bazaar, Paytm and Nykaa. It's time that investors stop being naive and look at stocks with profitability and dividend paying track record. Here are a few stocks that you should definitely buy after the market carnage.

Oracle Financial Services

Oracle Financial Services is a subsidiary of Oracle Financial Inc, US, one of the world's biggest software services company.

The company provides banking and insurance related software and has been doing well over the last few quarters. In fact, the company had declared a dividend of Rs 200 per share, taking the dividend yield itself to the near 6% mark (5.87% to be precise).

In its recent results the company highlighted the fact that the orders for the nine month period ending Dec 2021, is up 21%, when compared to the previous nine months. The stock is trading at 14 to 15 times, one year forward earnings. Mid sized IT companies are trading at p/e of as high as 25 times. The stock of Oracle Financial Services is trading at Rs 3500 and we believe that 30% returns in the stock is highly possible from current levels. The stock had also hit a 52-week high of Rs 5000 plus.

Castrol India

This is a multinational company, like Oracle Financial with a dividend yield of 5.1%. How many times do you get to see a company with a strong brand available at a price to earnings ratio of 12 times and a dividend yield of more than 5%. There is little need to highlight the fact that the company is the top player in the lubricants segment and has a strong brand equity.

The shares have fallen from levels of Rs 154, to the current levels of Rs 107, making it an attractive stock to buy at the current levels. As economic recovery takes place, the company is bound to benefit as the lube market would be one of the top beneficiaries.

ITC

This is another stock that is a bluechip stock with brands like Vivel, Fiama, Ashirvaad, Bingo, Sunfeast etc. The company is a cigarette to FMCG player with a long standing track record. The shares of the company at the current market price are available with a dividend yield of more than 5%, which is very attractive. We recommend that investors buy the same. ITC has seen its shares dive from levels of Rs 235, just a few weeks ago to the current levels of Rs 231, which now offers a good entry point.

While we have recommended to buy the above stocks, we do believe that there would be immense volatility in the coming days. Foreign Portfolio Investors have been in a selling mode for the last many trading sessions and that is unlikely to change. We also believe that with the US Fed is likely to hike interest rates, and things could be very volatile in the coming days. So, buying in small quantities would be the best strategy going forward.