Stocks That Are Cheap Even As Markets Hit Lifetime Highs

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The Sensex and the Nifty are trading at new lifetime highs. It is very difficult to find stocks that are cheap even as markets have soared almost 22 per cent this year. Here are a few stocks that are not expensive and could be great bets even in a rising market.

Talwalkars BetterValue Fitness

Talwalkars is among the largest health and fitness centres in the country and operates more than 210 gyms in India and Sri Lanka. The company has tied-up with "Snap Fitness", USA, which is the global leader with 2,500 franchisees around the globe.

Under the agreement, Talwalkars Better Value has exclusive Master Franchisee for Six Asian countries namely Thailand, Singapore, Malaysia, Vietnam, Sri Lanka and Bangladesh. Going ahead the company is likely to benefit from this partnership. During the year the company introduced a new Rs 1 lakh package which has seen a very good response.

The promoters would also be pumping in more money for expansion through preferential allotment at a price of Rs 318.3, which is way higher than the current market price of Rs 282. This means they are paying a higher amount for stake, when compared to the current market price.

Talwalkar's Valuation

The next three years are likely to see some phenomenal growth for Talwalkars Better Value Fitness. In all probability the company can report an EPS of close to Rs 35 by 2019-2O.

If you apply a p/e of 15 for the company, the share should not be trading less than Rs 525. This means a significant upside from the current levels of Rs 282. Buy the stock from a long term perspective in mind. Check stock quote of Talwalkars here

ONGC

India's oil exploration major has not participated in this year's stock market rally. In fact, even as the Nifty and the Sensex have hit a new record high, ONGC is still languishing very close to its 52 week low.

However, there is reason to believe that this stock may soon get better discounting and is headed higher. The first reason is gas prices.

Gas prices are set to rise from Oct 1 and every $1 increase in gas prices, increases ONGC revenues by Rs 4,000 crores. The Daman block has already commenced gas production and Vasistha would be fully operational later this year. Crude prices have also firmed this quarter, as compared to the previous and this should be reflected in the results.

Heavy contribution from ONGC subsidiaries

Recently, the company bought out the government's stake in HPCL. With this the company now has stakes in three major oil refining companies, including Indian Oil, MRPL and HPCL. Refining companies are at the moment doing exceedingly well and this is good news for ONGC.

It is unlikely that oil prices would dip too much going forward and hence ONGC is likely to increase profitability in the coming years. 

 

ONGC: Valuations inexpensive

ONGC shares recently hit a new low of Rs 156 and is currently trading at Rs 165. It is likely that ONGC can achieve an EPS of Rs 21 in the next couple of years. This means the stock is trading at a p/e of just about 7 times 2019 earnings.

The stock also is an excellent play on dividends, given that the yields on the dividend works to around 6 per cent. A great stock to buy on every dip. The shares at the moment are trading very close to its 52 week low.

Disclaimer

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

 

 

Read more about: sensex, nifty
Story first published: Tuesday, September 19, 2017, 8:54 [IST]
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