Stocks To Buy If Geo-Political Tensions Escalate Between Ukraine & Russia

Stocks plunged in the US on Friday, after U.S. National Security Advisor Jake Sullivan said at a White House briefing that there were signs of Russian escalation at the Ukraine border and that it was possible that an invasion could take place during the Olympics. If an invasion does take place, we could see Indian stocks falling. Here are some stocks, however, one could buy if an invasion does happen.

ONGC

Crude prices have surged in the last few weeks. In fact, on Friday crude oil jumped by almost 5% in the global markets on increasing fears that Russia would invade Ukraine. WTI rose more than 5% to hit $94.66 per barrel, its highest level since Sept 30, 2014

One of the biggest beneficiaries of rising crude prices in the country would be ONGC, which is the nation's biggest oil and gas explorer.

This current quarter may see bumper results for ONGC, given the way crude oil prices have rallied. Already the stock is extremely cheap with a 1-year forward price to earnings around 5 to 8 and a dividend yield in excess of 2%.

If crude continues to be elevated be rest assured that the stock of ONGC is likely to give handsome returns for investors.

Oil India

This is the second largest oil exploration company after ONGC. This too is a direct beneficiary of higher crude prices. Oil India is also a government entity and pays a handsome dividend yield of 2.16%. The stock is also available at a price to book value of 1 and a price to earnings multiple of just 6 times.

We believe that crude oil prices are going to stay elevated for a long period of time and this is going to benefit a company like Oil India, which is a pure oil and gas exploration play.

With the fundamentals of the company also very sound, we believe that from a 1-year perspective the stock of Oil India is a good bet.

Now a word of caution in the sense that markets are extremely volatile at the moment and any final outcome remains unknown.

Disclaimer

Sunil Fernandes is the Managing Editor for goodreturns.in. He has 27 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His expertise remains in stocks, mutual funds, gold and tax planning.

Disclaimer

Investing in equities poses a risk of financial losses. 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.