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

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    The Nifty has fallen a good 4 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. 

    Manpasand Beverages

    This was once a darling of investors. However, the shares of Manpasand has fallen from Rs 500 to Rs 135.30. Even at these levels the stock may remain a risky bet. 

    The reason for the collapse in the stock price is that the auditors of the company resigned suddenly citing reasons such as lack of information from the company to complete its duties. However, Manpsand blamed the systems for the delay in providing information. 

    Since then, the company has appointed another auditor but, the damage in the stock has been done. Many investors are unlikely to touch the stock, given the worries. Large institutional investors, which were once some very marquee names have sold into the stock. 

    Manpasand Beverages: Should you buy?

    However, let us examine some facts. One interesting fact is that the company is a debt free company, with ambitious plans to expand its reach. Manpasand manufactures "Mango Sip" and "Fruitsup" range of brands, along with a few others. 

    In the past, the company has been able to raise money through equity, which is why the debt has remained near zero. Even at these levels after the collapse in the share price, the stock still trades at a p/e of 20 times one year forward earnings.

    Should the share fall below levels of Rs 100, one could consider investing for the long term. Check stock quote of Manpasand 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 682, 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 682, the company is trading at P/EV multiple of 3.6 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 305, which is very close to its 52-week low of Rs 280. 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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