If there is a proven track record, strong pedigree and a dominant market share, it is just a matter of time, when the company could perform. Here are three stocks that have been under performers in 2019, but, are leaders in their field and could be big out performers in 2020.
This is the world's largest two-wheeler manufacturer with a dominant share in the Indian market. It is a cash rich company, which is also zero debt. The shares of the company have fallen from levels of Rs 3,300 exactly a year ago in Dec 17, 2018, to a price of Rs 2,300 on Dec 17, 2019. The stock has now dropped a good 30 per cent from peak levels.
The quarterly numbers of the company have not been good for the last few quarters, as Hero MotoCorp has been hit by the slowdown in the Indian economy. Unlike some of its peers the company would need to constantly focus on exports to hedge against a sharp slowdown.
Hero MotoCorp: Attractive on valuations
The shares of Hero MotoCorp are attractive, when it comes to valuations. The shares are trading at a one year forward p/e of about 15 times, which is way lower than the historical average. The company's dividend yield is also very close to that 4 per cent mark, which is at least better than the interest on savings bank accounts.
This makes the stock an attractive bet from a long-term. If the economy starts recovering and greenshoots are already visible, we could see a sharp rally in the stock.
Shares in TV Today have also fallen way below the 52-week levels of Rs 383. The shares are trading at a very attractive price of Rs 248. The company owns the popular news channels including Aaj Tak and India Today.
A hit in advertisement revenue is what has impacted the company over the last few quarters. This is largely on account of a slowdown in the economy. When investing it is important to remember to invest in companies that are leaders in their field and TV Today's Aaj Tak is the number 1 Hindi News channel.
The shares are also trading at very attractive valuations of around 10 times one year forward earnings, which has the potential to generate at least 30 per cent returns.
Shares in ONGC too have not been doing great over the last few months. The shares are very close to their 52-week low price of Rs 116. At the current market price, the shares are trading way below their long-term historical averages.
Apart from this, the stock gives a dividend yield of near 5 to 6 per cent, which makes it attractive. We do not anticipate too much of a fall in the stock from these levels, as there has already been a decent price destruction.
It is unlikely that crude oil prices would go down significantly from these levels, which is why a stock like ONGC could be an attractive bet.
We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor.