It was mayhem across the markets with the benchmark indices falling sharply, thanks to the fall in the US markets. Here are a list of Bluechip stocks at 52-week lows in trade today.
List of bluechip stocks at 52-week lows
|Name of company||Current market price||52-week low price|
|LIC||Rs 860.85||Rs 855|
|HDFC Bank||Rs 1293||Rs 1282|
|BPCL||Rs 326.50||Rs 324.15|
|HDFC Asset Management||1712||1707|
Buy HDFC Bank and LIC stock
Among the list of stocks, we would definitely recommend buying the stock of LIC and HDFC Bank. LIC's price to embedded value is at a significant discount to some of the private sector peers, The shares, which were offered at Rs 949 in the IPO are now available at Rs 860. Of course, retail investors and policy holders have lost money, but, buyers who wish to buy small quantities can do so now. That having said, if the markets fall further, there will most certainly be a fall in the share price of LIC, but, in terms of value, it holds tremendous value. This is largely on account of the most visible brand in the country and an under penetrated life insurance market.
The other stock that we like is HDFC Bank. The bank will continue to chalk out growth rates of 15 to 20% in the next few years. The price to earnings ratio for the bank has fallen to just 19 times. At these levels the stock is very attractive now.
Should you buy the stocks of BPCL, Dabur and Lupin at 52-week lows?
As far as BPCL is concerned, the divestment by the government just does not seem to be happening. That was the big trigger for the stock. With crude prices rising, beyond a point, companies may find it hard to raise retail fuel prices. As far as the Dabur India stock is concerned, inflation is going to lead to margin pressure as costs rise. This is probably one reason why the stock has fallen to a 52-week low. As far as Lupin is concerned, pharma companies are again facing margin pressures. Apart from this, we do not know which pharma company may get US FDA warnings and when, which is another problem. Hence, we have an avoid on the stock.
Should you buy Tastybites, Metropolis Healthcare and HDFC Asset?
Clearly, Tastybites and Metropolis Healthcare are stocks that are over valued. There is no point in buying companies where valuations are stretched. HDFC Asset Management like most HDFC group companies has been falling. Nothing wrong with the AMC business, as inflows into mutual funds continues to be robust. All in all, we would prefer investors buying the stock of HDFC Bank and LIC. However, one must also remember that the markets are volatile and if there is any further downside in the markets, these stocks could also dive.
S Hariharan, Head of Sales Trading, Emkay Global Financial Services on the market performance, "After increasing net longs single stock open interest since mid-Apr, Retail has started to trim long positions - they net long open interest is down $500 mn over the last 5 sessions. FII selling intensity in cash segment has also ebbed in this period. As a result, headline indices have bounced on low market volumes, from extremely oversold conditions. Metals stocks have been the weakest segment of the market, with long unwinding seen across ferrous as well as non-ferrous stocks. Autos and standalone refinery stocks have been the strongest sectors on account of revenue visibility."
If FPIs selling continues, we would see further fall in some of the stocks, despite them being at 52-week lows