Lower share prices, need not necessarily be the best and investors should know, that there are risks. Having said that, there are also stocks that can give good returns over the more long term. We warn investors, that these are high risk stocks, and invest in them, if you have an appetite for risk. Most of these stocks are under Rs 50.
This stock has collapsed from Rs 44 to Rs 12.50. This is a highly risky stock to bet on, given the fact that the company is saddled with debt.
Recently, there were reports that the China Development Bank would file for insolvency proceedings against the company to recover its debts. However, there could be some triggers for the stock as well.
The first is that the company is looking at debt reduction through stake sale in the tower business to Brookefield. It is planning to sell real estate assets and is planning to offer debt to equity swap for lenders.
If the plans for restructuring go through, we could see the stock price rally. Also, if Mukesh Ambani led Jio show interest in a takeover, we do not know where the stock price could be headed.
It could be a risk worth taking at the current price of Rs 12.50. Check stock quote of RCOM here
The one reason to recommend this government owned bank is the fact that the stock has fallen to 52-week lows.
Dena Bank has huge problems with bad debt, and the problem is unlikely to go away anytime soon. However, the biggest trigger for the stock would be the consolidation with government owned banks.
For example, if there is even a slight ray of hope that smaller PSU banks would be taken-over by the larger ones, we would see sharp recovery in the share price.
This makes the stock risky as well a good bet. check Dena Bank stock quote here
Zee Learn is among India's top education company with the fastest growing chain of K-12 schools - Mount Litera Zee School and Asia's No 1 chain of pre-school network - Kidzee in its portfolio.
It also operates the Zee Institute of Media Arts (ZIMA), a TV and Film training institute in Mumbai that offers diploma courses in Direction, Acting, Sound, Editing, Production and Cinematography. Zee Learn also has Zee Institute of Creative Art (ZICA) a full-fledged Classical and Digital Animation Training Academy.
Zee Learn: Stock has potential to rally
Zee Learn has aggressive plans to expand and capitalize to cater to the needs of the education sector. The company also has a very asset light model. Recently, Zee Learn ventured into manpower recruitment and training through one of its subsidiaries. It is likely that Zee Learn will post strong growth in the coming quarters on account of the many initiatives that it is taking.
The company can post an EPS of Rs 3 by 2018-19. If we value the company at a 20 p/e the stock should trade at Rs 60. This means an upside of at least 50 per cent over the current levels.
South Indian Bank
If you are looking to invest in banking stocks, that have the potential to generate returns in the long term, South Indian Bank should be a good bet.
The stock is trading at relatively reasonable valuations. The gross NPAs for the quarter ended Sept 30, 2017, came in at 3.57 per cent, which is still reasonable when compared to a host of other banks. Interestingly,this was a drop from the previous quarter level of 3.61 per cent.
South Indian Bank can report an EPS of close to Rs 2 for FY 2017-18. The stock is trading at a p/e of just 15 times one year forward earnings. This is a private sector bank that definitely deserves better discounting. This makes the stock a good bet at the current level. Buy for long term capital gains.
Hindustan Construction is like Gammon India and has built some of the finest projects in the country, including the iconic Bandra-Worli sea link, first Thermal power plant in Mumbai, first water treatment plant in Mumbai, first underground power house in Bihar, first port impounded dock in West Bengal, first nuclear power project.
The list of firsts to the company's name are plenty. Recently, the company said that it can reduce debt by half, after the company allowed arbitration awards to be settled quickly.This would halve its debt, which would see profits shoot-up sharply.
HCC also recently received an award for the construction for the Bangalore Metro project. The award of the contract was almost Rs 800 crores. This project is to be executed in 36 months. The government's ongoing thrust on infrastructure development could boost the prospects of the company in the coming years.
The stock is a good bet around the Rs 32 levels.
Exercise some caution
It is best to exercise some degree of caution, as the stocks recommended may or may not be fundamentally the best. Stocks under Rs 50 are generally small cap stocks, whose price can be extremely volatile. In some case the downside risk is very low, given the huge destruction already in the stock. Remember, if you hold for a longer period of time, there maybe some possibility of making money. We have also recommended some small cap stocks here
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