Good Quality Stocks Near 52-Week Lows; Should You Buy?

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The Nifty has fallen a good 8 per cent from peak levels, though one must admit that the valuations are still not very cheap. However, there are many stocks that are near 52-week lows. Here are a few that could be worthy picks at these levels. 

Yes Bank

Yes Bank shares have fallen dramatically from levels of Rs 382 to the current levels of Rs 303. Though it is some distance away from 52 week levels of Rs 275, it seems difficult that the stock would get there anytime soon. 

Yes Bank has been having splendid quarterly numbers every quarter. Take a look at the numbers for the quarter ending Dec 31, 2017. The growth in advances jumped 46.5 (year-on-year) to Rs 1.5 Tn. 

The deposits at the bank for the same period jumped to 29.7 per cent (yoy). The Current Account Savings Account Ratio, that is known as CASA is at a solid 38 per cent. 

Yes Bank: Cheap on valuations

The net profit at the bank has been growing handsomely in the last several quarters. The net profits rise to Rs 1080 crores for the quarter ending Dec 31, 2017, up 22 per cent, year on year. 

Total assets rose to Rs 2,654.3 billion as the end of Dec. The net interest margins continue to be healthy at 3.5% in Q3FY18.

The bank is also on target to achieve its CASA target of 40 per cent by 2020. The bank's stock is trading at a p/e of just 15 times one year forward earnings. From 3-5 year perspective, the stock can yield handsome returns. 

Check stock quote of Yes Bank here

SBI Life Insurance

SBI Life Insurance recently came-up with an IPO at a price of Rs 700. The shares are now trading at Rs 705, which is just above the IPO price.

The company is a joint venture between SBI and BNP Paribas. At the time of the public issue, many brokerages had placed a buy call on the stock. 

At the current price the stock is still trading at a very high p/e of almost 55 times.  However, the heavy discounting is largely on the back of the strong potential in the insurance business.

SBI Life: Buy on dips

While the p/e ratio is still high for the company, at the current market price of Rs 705, the company is trading at P/EV multiple of 3.7 times, which is reasonable.

The stock can be bought on declines only, as valuations continue to remain lofty. However, it also has more to do with the current market scenario, where valuations for most stock prices that are into he life and general insurance business are high.

Investors who can hold the stock for 3-5 years can gain from the growth prospects the company may show, due to the under penetrated insurance business. 

Check stock quote of SBI Life here

Tata Motors

Shares of Tata Motors have plunged to Rs 342, which is very close to its 52-week low of Rs 324. Largely, the fall has been on account of numbers that lagged estimates.

Net profit for the quarter ending December 31, 2017 rose to Rs 1,198.6 crore. The net profit for the company was largely below estimates on account of below than expected sales from the Jaguar Landrover in key markets. However, what was encouraging was the solid recovery in the domestic business. Volumes and sales, both surged as there was a strong recovery in every segment including commercial vehicles.

Check stock quote of Tata Motors here

New launches to drive growth

However, new launches especially from Jaguar Landrover will drive growth in the coming quarters. In fact, a stronger fourth quarter is likely to be driven by new models, seasonality and improved profitability. Jaguar Landrover is also expected to launch its first electric car, the Jaguar I-Pace and Range Rover plug-in hybrid later this year.

What is also encouraging is the fact that there is a robust recovery in markets like the US and China, which are key markets for the company. This could propel sales of Tata Motors' JLR brand in the coming quarters. This is a good stock to buy at 52-week low levels.

Disclaimer

The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author  do not accept culpability for losses and/or damages arising based on information in this article.

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