Ten Value Creator Stock Picks For Long Term
>> Monday, April 13, 2009 –
Multibagger Stocks,
Sector Picks
In my earlier post I discussed some of the best long term investment themes. In this post I would try and identify ten stocks which can be value creators in the long term. The stocks which I will list below has been picked primairly on the basis of industry outlook and company fundamentals.
In my subsequent posts I will try and taker up each stock on an individual basis and give a more detailed analysis for each. Investors should note thet this is just my opinion and need not be the best opinion just because I am an analyst. So before taking any position in these stocks investors should do their own research and see if these companies satisfy their investment criteria.
I would also like to state that I really dont know any entry level prices for these stocks. Thats something really difficult to determine. What I can say is that if investors buy these stocks in a beaten down market with a 5-10 year investment horizon then returns would be amazing in my opinion.
1)Oil & Natural Gas Corporation Ltd
In my opinion ONGC is one of the best stock picks in the Oil Drilling And Exploration sector in India. Crude Oil prices should be much higher in the next 3-5 years then what it is at today. This would lead to higher margins for the company. ONGC's foray into uranium mining is also something to watch out for in the long term. In all its a great company with strong fundamentals and excellent management.
2)Sterlite Industries (India) Ltd
Sterlite is another commodity pick in my list of value creator stocks. The main products of the company include copper rods, copper cathodes, anode slime and others. The demand for copper in a growing economy is huge and when Asia starts to grow again at a robust pace, copper prices will again hit the roof. In such a scenario companies like Sterlite will be major beneficiaries. I must add that Sterlite too has got a very ambitious management and this would be an additional driving factor for the company and the stock price.
3)Container Corporation of India Ltd
CONCOR, in my opinion is another great company with huge growth potential. The Indian ligistics industry has a long way to go in order to match global standards and big players like Container Corporation will be the ones leading the way for the industry. On top of this the company has a excellent balance sheet and cash flow position. So fundamentally its among the best stocks in my opinion. CONCOR has also been increasing its facilities and services at a rapid pace indicating a active management team. In my opinion this stock should give stellar returns to investors in long term.
4)Subhash Projects & Marketing Ltd
Subhash Projects is one mid cap company which has got great growth potential. The company is primairly into water infrastructure and that is one of the major reasons to be bullish on this stock. Besides this, Subhash Projects has a robust order book and is procuring new water infrastructure related projects at a rapid pace. In my opinion the company is also very undervalued relative to its peers. This stock should ideally be a 10 bagger in my opinion if we invest with a 7-10 year investment horizon.
5)Sun TV Network Ltd
The media and entertainment sector in India will become the largest in Asia by 2015. A major part of the growth story for media and entertainment companies is still to come. Sun Tv has got a dominating presence in the South and has been moving in a excellent manner in terms of its growth strategies. Foray into radio, film production and DTH services are just examples of the same. The company has also got excellent fundamentals and whenever markets recover it should be a big mover among the media and entertainment stocks.
6)Axis Bank Ltd
The banking sector stocks have been one of the worst hit in the stock market carnage. Axis bank was no exception and the stock has fallen substantially from its highs. In my opinion this is one of the best banks among the private sector banks in India. Axis bank has been expanding at a rapid pace in terms of new branches as well as ATM's. As I stated in my earlier post that the banking sector is the backbone of the economy. Thus as credit situation starts to improve again and when the economy starts to grow more robustly then Axis bank will see a substantial upside in stock prices.
7)Everonn Systems India Ltd
If anyone is bullish on the education sector in India then Educomp and Everonnare the stocks to watch out for. In my opinion on a relative basis Educomp is overvalued and hence Everonn provides a good long term investment opportunity. The company has been growing at a robust pace and with the education sector in India still needing huge room for improvement and growth, companies like Everonn would be major beneficiaries of the same.
8)Fortis Healthcare Ltd
The Hospitals & Medical Services sector in India is still at a very early stage of growth. The number of beds as compared to the population is among the lowest in India compared to global standards. But as there is rapid urbanization and increasing health awareness, the needs for medical services will increase. This would be the growth drivers for companies like Fortis, which already has big expansion plans in place. The management of Fortis Healthcare also needs no introduction as they have alreay proved their capability over years. Thus, in my opinion this stock is another 10 bagger if one is ready to invest and wait for 7-10 years.
9)Karuturi Global Ltd
KGL is not a huge company and also a risk bet. But investors can afford to have 1-2 such stocks in their portfolio because if the company does well then the stock price can go up 20-25 times in a short span of time. What I like about KGL is its huge expansion plans in Ethopia, not only in rose plantation but also other agricultural commodities. As I explained my bullishness on agricultural commodities for the future I am very bullish on this stock as well. But investors have to bear in mind that this is a relatively risky bet and positions should be taken accordingly.
10)Jain Irrigation Systems Ltd
Since I am mentioning Jain Irrigation in the end it does not mean in anyway that among these 10 stocks this is my least preferred. I believe that Jain irrigation is a excellent company with a pottntial to give multi fold returns over a 5+ year investment horizin. Jain Irrigation is among the largest providers of drip irrigation system in the world. It is also into agri products and water management. In my opinion the management of the company is efficient going by their past plans and execution. The stock has risen substantially from its 52 week low and any big correction will be a great long term investment opportunity.
Conclusion
The Indian markets have moved up nearly 30% from its lows in March. So in my opinion it might not be a great time to buy stocks for long term now. There should be some correction in the markets in the near term. These small or massive corrections can be used to buy some of these stocks for long term.
I said it in my earlier post also and would like to say this again.
Its not easy to predict where the markets will go in near term. So dont try and do that. What investors can do is to buy stocks with a 5+ year investment horizin on deep corrections. I can assure everyone that great money can be made investors buy some of these great companies and hold it with patience.
In my subsequent posts I will try and taker up each stock on an individual basis and give a more detailed analysis for each. Investors should note thet this is just my opinion and need not be the best opinion just because I am an analyst. So before taking any position in these stocks investors should do their own research and see if these companies satisfy their investment criteria.
I would also like to state that I really dont know any entry level prices for these stocks. Thats something really difficult to determine. What I can say is that if investors buy these stocks in a beaten down market with a 5-10 year investment horizon then returns would be amazing in my opinion.
1)Oil & Natural Gas Corporation Ltd
In my opinion ONGC is one of the best stock picks in the Oil Drilling And Exploration sector in India. Crude Oil prices should be much higher in the next 3-5 years then what it is at today. This would lead to higher margins for the company. ONGC's foray into uranium mining is also something to watch out for in the long term. In all its a great company with strong fundamentals and excellent management.
2)Sterlite Industries (India) Ltd
Sterlite is another commodity pick in my list of value creator stocks. The main products of the company include copper rods, copper cathodes, anode slime and others. The demand for copper in a growing economy is huge and when Asia starts to grow again at a robust pace, copper prices will again hit the roof. In such a scenario companies like Sterlite will be major beneficiaries. I must add that Sterlite too has got a very ambitious management and this would be an additional driving factor for the company and the stock price.
3)Container Corporation of India Ltd
CONCOR, in my opinion is another great company with huge growth potential. The Indian ligistics industry has a long way to go in order to match global standards and big players like Container Corporation will be the ones leading the way for the industry. On top of this the company has a excellent balance sheet and cash flow position. So fundamentally its among the best stocks in my opinion. CONCOR has also been increasing its facilities and services at a rapid pace indicating a active management team. In my opinion this stock should give stellar returns to investors in long term.
4)Subhash Projects & Marketing Ltd
Subhash Projects is one mid cap company which has got great growth potential. The company is primairly into water infrastructure and that is one of the major reasons to be bullish on this stock. Besides this, Subhash Projects has a robust order book and is procuring new water infrastructure related projects at a rapid pace. In my opinion the company is also very undervalued relative to its peers. This stock should ideally be a 10 bagger in my opinion if we invest with a 7-10 year investment horizon.
5)Sun TV Network Ltd
The media and entertainment sector in India will become the largest in Asia by 2015. A major part of the growth story for media and entertainment companies is still to come. Sun Tv has got a dominating presence in the South and has been moving in a excellent manner in terms of its growth strategies. Foray into radio, film production and DTH services are just examples of the same. The company has also got excellent fundamentals and whenever markets recover it should be a big mover among the media and entertainment stocks.
6)Axis Bank Ltd
The banking sector stocks have been one of the worst hit in the stock market carnage. Axis bank was no exception and the stock has fallen substantially from its highs. In my opinion this is one of the best banks among the private sector banks in India. Axis bank has been expanding at a rapid pace in terms of new branches as well as ATM's. As I stated in my earlier post that the banking sector is the backbone of the economy. Thus as credit situation starts to improve again and when the economy starts to grow more robustly then Axis bank will see a substantial upside in stock prices.
7)Everonn Systems India Ltd
If anyone is bullish on the education sector in India then Educomp and Everonnare the stocks to watch out for. In my opinion on a relative basis Educomp is overvalued and hence Everonn provides a good long term investment opportunity. The company has been growing at a robust pace and with the education sector in India still needing huge room for improvement and growth, companies like Everonn would be major beneficiaries of the same.
8)Fortis Healthcare Ltd
The Hospitals & Medical Services sector in India is still at a very early stage of growth. The number of beds as compared to the population is among the lowest in India compared to global standards. But as there is rapid urbanization and increasing health awareness, the needs for medical services will increase. This would be the growth drivers for companies like Fortis, which already has big expansion plans in place. The management of Fortis Healthcare also needs no introduction as they have alreay proved their capability over years. Thus, in my opinion this stock is another 10 bagger if one is ready to invest and wait for 7-10 years.
9)Karuturi Global Ltd
KGL is not a huge company and also a risk bet. But investors can afford to have 1-2 such stocks in their portfolio because if the company does well then the stock price can go up 20-25 times in a short span of time. What I like about KGL is its huge expansion plans in Ethopia, not only in rose plantation but also other agricultural commodities. As I explained my bullishness on agricultural commodities for the future I am very bullish on this stock as well. But investors have to bear in mind that this is a relatively risky bet and positions should be taken accordingly.
10)Jain Irrigation Systems Ltd
Since I am mentioning Jain Irrigation in the end it does not mean in anyway that among these 10 stocks this is my least preferred. I believe that Jain irrigation is a excellent company with a pottntial to give multi fold returns over a 5+ year investment horizin. Jain Irrigation is among the largest providers of drip irrigation system in the world. It is also into agri products and water management. In my opinion the management of the company is efficient going by their past plans and execution. The stock has risen substantially from its 52 week low and any big correction will be a great long term investment opportunity.
Conclusion
The Indian markets have moved up nearly 30% from its lows in March. So in my opinion it might not be a great time to buy stocks for long term now. There should be some correction in the markets in the near term. These small or massive corrections can be used to buy some of these stocks for long term.
I said it in my earlier post also and would like to say this again.
Its not easy to predict where the markets will go in near term. So dont try and do that. What investors can do is to buy stocks with a 5+ year investment horizin on deep corrections. I can assure everyone that great money can be made investors buy some of these great companies and hold it with patience.
A lot of useful information in those links, thanks. I feel that it might even be too much for me to “digest” in just one week.
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