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Stocks To Buy: 5 Stocks From Nifty Trading At Up To 64% Discount

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Markets have dropped nearly 8% from 52-week highs. Here are a few stocks that are trading at a discount to long term averages, based on Motilal Oswal's Bulls and Bears report.

 

What has been taken into account in the table below is the 10-year historical p/e average and the current p/e average to arrive at the discount.

Stocks trading at a discount between 34% and 64%

Stocks trading at a discount between 34% and 64%

Stock nameCurrent p/e10-year historical p/eDiscount %
JSW Steel6.912.2-43%
Tata Steel4.913.7-64%
ONGC3.89.1-58%
Coal India5.712.1-53%
NTPC7.511.4-34%

The above is compiled from the latest bulls and bears report by Motilal Oswal Financial Services.

Should you buy these stocks that are trading at a significant discount?
 

Should you buy these stocks that are trading at a significant discount?

Let's take a look at the category of stocks that are trading at a discount. Either these are metal stocks or stocks that are majority owned by the Government of India.

Let's first take a look at whether you should buy the metal stocks of JSW Steel and Tata Steel.

Being steel stocks much of it would depend on economic growth outlook for the globe and how metal prices move internationally. We believe that metal stocks faith hinge on these. Steel companies tend to have periods of good economic growth and then a sudden subdued growth in the economies tend to impact them. No doubt that they have also fallen significantly from their highs. We believe that there are more downside risks to metal stocks currently as the spread of the omicron virus good stunt growth.

Government of India majority owned stocks

Government of India majority owned stocks

Now coming to the other set of stocks and whether you should buy the ones that are at a discount, these again are linked to commodity prices globally. For example, ONGC shares would largely depend on how crude prices perform in the global markets. If crude prices move higher we could see these set of stocks performing really well.

Coal India is one stock that we recommend to buy, which is trading at -53% discount to long-term averages. One of the reasons to recommend this stock is the good dividend yield. At current prices, the stock can yield a dividend of more than 8%. In the current scenario where banks offer an interest of only 5.5%, this stock is not a bad bet. The shares have over the years under performed the benchmark indices, but, can do well in the coming days.

Disclaimer

Disclaimer

Investing in equities is risky and investors are advised caution. Invest only if you have an appetite to take risk. Please be informed neither Greynium Information Technologies Pvt Ltd nor the author are liable for any losses caused as a result of decisions based on the article.

Read more about: stocks to buy ongc tata steel
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