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3 Undervalued Stocks With Strong Brands To Buy After Sharp Fall In Their Share Prices
The Sensex last week fell as much as 3.5% and there is a possibility that we might see a dip in the markets going forward as well. If that were the case, it would be a good time to accumulate some high quality stocks. Here are 3 stocks that you can buy after the market fall.
L&T Finance Holdings: Buy the stock as it nears 52-week lows
The stock of L&T Finance Holdings is very close to its 52-week lows. The stock is now trading at Rs 75.50, as against its 52-week low price of Rs 71.50. The company reported a good set of quarterly numbers for the third quarter ending Dec 31, 2021.
Net profits at the company saw an up tick by 12% to Rs 326 crores, when compared to the previous quarter of the last financial year.
A statement by L&T Finance Holdings stated that the company witnessed strong improvement in disbursements and collections in Q3FY22, and witnessed an all-time high retail quarterly disbursements of about Rs 7,600 crore, up by 29 per cent from a year ago.
However, L&T Finance Holings did also see its gross non-performing assets rising to 5.91 per cent by the end of December 2021 from 5.12 per cent by the year-ago same period. The EPS for the quarter is Rs 1.32. Even if the company does an EPS of Rs 6 for 2022-23, and we assume a discounting of 18 times, the stock should trade at Rs 106. Buy the stock for a good upside considering the strong pedigree.
Amara Raja Batteries: Strong brand, near 52-week low
Like L&T Finance Holdings this stock too has fallen to near 52-week lows, which is one of the reasons to recommend buying the stock. Amara Raja Batteries shares have fallen to Rs 614, as against a 52-week high price of more than Rs 1,000.
The company is a good profit making company with a good track record and owns the renowned Amaron range of batteries. In fact, the company is the largest player in the lead acid battery segment.
It has chalked out plans for e-vehicles and is getting ready with future technology. The company has a very strong brand equity in the replacement market and the products are known for high quality. We recommend buying the stock of Amara Raja Batteries, given that the shares are very
For some reason this stock has not been moving and slumped to near 52-week lows.
REC
The shares of REC, have also fallen to a low of Rs 132, as against the 52-week low price of Rs 122. This is a government of India majority owned company, is a top infra finance player. One of the reasons that we are recommending the stock as a buy is on account of the strong dividends that the company recommends.
For 2020-21, REC declared a dividend of 127.10% amounting to Rs 12.71 per share. At the current share price of Rs 132.90 this results in a dividend yield of 9.56%. This is a good yield for anybody looking at good steady income.
The p/e ratio is around the 3 mark and the company's price to book is 0.91 times. That makes it a very interesting stock to buy based on fundamentals.
Disclaimer
Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and is family do not hold shares in any of the above companies.
