High beta stocks are stocks that will gain faster, when the markets are rallying and fall faster, when the markets are falling. In short, they are high risk bets.
The Nifty High Beta index comprises of 50 such stocks, that have beta more than one. That is more technical. In short, what it means is that these stocks can fall and rise very sharply, when the markets rise and fall.
The idea of suggesting to buy these high beta stocks is that markets have fallen dramatically in the last one month. What this means is that any rise in the indices may lead to a faster rise in these stocks.
Bank of Baroda
Like all other government owned banking stocks, Bank of Baroda has plunged to very low depths. It is the second largest government bank in the country in terms of asset size, after State Bank of India. But, that is not the reason to be recommending Bank of Baroda.
We all know, that there is a huge non performing asset problems in government owned banks. But, as they say, you can either get good stock prices or good news...you cannot get both. At the moment, you are having bad news for banks, which makes it good news for their stock prices.
But, there is reason to be optimistic on Bank of Baroda. The bank is now headed by P S Jayakumar, the former chief executive of VBHC Value Homes. It is an appointment from the private sector, which may in the next few years make the bank more nimble.
Secondly, we believe that there could be some economic recovery that could happen in the next few quarters, which could boost prospects for the banking sector. Fresh capital infusion by the government and credit expansion could be further triggers for the stock.
At a price to book at around 0.7 times, the stock is not really expensive.
Sintex shares have almost halved from levels of Rs 136 to Rs 75. The company recently reported a good set of quarterly numbers with net sales rising 12 per cent net profits gaining 11 per cent for the quarter ending Dec 31, 2015.
The company's prefabricated building systems and domestic custom moulding segments continued to do well.
The company reported an EPS of around Rs 3.5 for the quarter. Even if we assume an EPS of Rs 14 for 2016-17, the p/e of stock is just about 5.5 times. With the possibility of good growth prospects going forward, the stock has the potential to move higher.