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7 Largecap Stocks That Are Close To 52-week Lows, Should You Buy?
Markets staged a smart recovery this week, as the RBI decided to maintain a status quo policy and also articulated an accommodative policy stance. However, even as the indices are barely 5% away from record highs, there are many stocks that are very close to 52-week lows. Now, close is a relative term and we are taking for the purpose stocks that are between 1% to 7% away from their 52-week lows.
Large cap Stocks close to 52-week highs
| Current market price as on Dec 11, 2021 | 52-week low price | Away from 52-week low | |
|---|---|---|---|
| HDFC AMC | Rs 2549 | Rs 2425 | 4.88% |
| Colgate Palmolive | Rs 1438 | Rs 1414 | 1.69% |
| Bajaj Auto | Rs 3344 | Rs 3172 | 5.16% |
| MRF | Rs 74,221 | Rs 72,954 | 1.71% |
| HeroMoto Corp | Rs 2526 | Rs 2408 | 4.67% |
| Petronet LNG | Rs 211 | Rs 228 | 7.52% |
| Bandhan Bank | Rs 280 | Rs 259 | 7.43% |
Should you buy these largecap stocks?
To be honest, there we are not recommending any of these stocks to buy. Take the case of FMCG stocks mentioned here. Where is the sharp growth going to come from. Investors are paying hefty price premiums to companies where they are seeing a robust growth in the future. For example, take the case of Reliance Industries where they are seeing growth on multiple fronts. Some FMCG stocks have a p/e multiple that is 30, 40 and 50 times. Who is going to pay that kind of money where growth is stuck.
Auto, tyre stocks are also stuck as there are no hopes of seeing volumes growth of 10% to 20% quarter on quarter. Margins are also under pressure due to rise in input costs. So, some of these stocks are going to languish, though they are a better bet than the expensive FMCG. Stocks like Bandhan Bank may be reasonable, but, again the company has got exposure to the MSMSE sector.
Stay away from these stocks
All in all, we would recommend investors to stay away from these stocks, though, there could be investors who could do bottom fishing. A 5 to 10% decline could make some of them like Petronet LNG attractive. However, that said if natural gas prices continue to rise, it could pose a problem.
Disclaimer
Investing in the stock market is risky. Investors must therefore exercise due caution. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article.
