Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TOP PICKS (click on company name below)
Deep value holds promise of strong rebound
Several stocks that fell sharply during 2011 may possess the properties
that could drive an equally large rebound when equities valuations
recover. This was visible in the previous cycle that stretched from 2008
to 2010. During this period, a large number of the initial
underperformers not only recovered lost ground, but their
appreciation was also strong enough to make them outperform the
Sensex from the peak of the previous cycle to the next peak. The
promising underperformers are scattered across sectors and market
capitalization. In this report we put the spotlight on 10 stocks that are
capable of such a rebound – Axis Bank (Buy), Biocon (Buy), Hindalco
Industries (Buy), ICICI Bank (Buy), IDBI Bank (Buy), Maruti Suzuki (NR),
NCC (Buy), Sanghvi Movers (NR), Shriram Transport Finance (Buy) and
SKS Microfinance (Buy).
Beaten down stocks tend to recover value in the next upturn
268 stocks in the BSE500 had underperformed the Sensex during the rapid fall
in the wake of the global financial crisis of 2008. The mean erosion in market
capitalization of these stocks was 58.9%, well above the 45.5% fall in the
Sensex. The rebound during 2009‐2010 saw the market capitalization of these
268 stocks rise by 227.9%, well above the 157.4% rise in the Sensex.
Several outperform across the cycle
123 of the 268 underperformers during 2008 also outperformed the Sensex
from the peak of the previous cycle (Aug08) to the more recent peak in Nov10.
Therefore, a significant portion of the underperformers not only recovered the
value that was lost in the initial phase, but they also more than made up for the
initial losses in the later phase of the cycle.
Dispersed across a range of sectors and market capitalization
Contrary to common perceptions, we find that underperformers were
dispersed across a large number of sectors. In 2008, Engineering (27) and
Financials (27) had the largest number of stocks within the 268
underperformers, followed by IT Services, Metals, Construction and Real
Estate. In 2011, 343 of the BSE500 have underperformed and Financials (46),
Engineering (28), Metals (27) and Construction (23) make up the large part.
The Avendus ‘Deep‐value picks’
In this report we have focused on the factors that provide resilience to these
stocks during the ongoing downturn and those that would facilitate a rebound
in their growth, earnings and valuation over the medium term. We also
estimate the potential ‘worst‐case’ value for the stock under sustained adverse
conditions.
TOP PICKS (click on company name below)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TOP PICKS (click on company name below)
Axis Bank
Deep value holds promise of strong rebound
Several stocks that fell sharply during 2011 may possess the properties
that could drive an equally large rebound when equities valuations
recover. This was visible in the previous cycle that stretched from 2008
to 2010. During this period, a large number of the initial
underperformers not only recovered lost ground, but their
appreciation was also strong enough to make them outperform the
Sensex from the peak of the previous cycle to the next peak. The
promising underperformers are scattered across sectors and market
capitalization. In this report we put the spotlight on 10 stocks that are
capable of such a rebound – Axis Bank (Buy), Biocon (Buy), Hindalco
Industries (Buy), ICICI Bank (Buy), IDBI Bank (Buy), Maruti Suzuki (NR),
NCC (Buy), Sanghvi Movers (NR), Shriram Transport Finance (Buy) and
SKS Microfinance (Buy).
Beaten down stocks tend to recover value in the next upturn
268 stocks in the BSE500 had underperformed the Sensex during the rapid fall
in the wake of the global financial crisis of 2008. The mean erosion in market
capitalization of these stocks was 58.9%, well above the 45.5% fall in the
Sensex. The rebound during 2009‐2010 saw the market capitalization of these
268 stocks rise by 227.9%, well above the 157.4% rise in the Sensex.
Several outperform across the cycle
123 of the 268 underperformers during 2008 also outperformed the Sensex
from the peak of the previous cycle (Aug08) to the more recent peak in Nov10.
Therefore, a significant portion of the underperformers not only recovered the
value that was lost in the initial phase, but they also more than made up for the
initial losses in the later phase of the cycle.
Dispersed across a range of sectors and market capitalization
Contrary to common perceptions, we find that underperformers were
dispersed across a large number of sectors. In 2008, Engineering (27) and
Financials (27) had the largest number of stocks within the 268
underperformers, followed by IT Services, Metals, Construction and Real
Estate. In 2011, 343 of the BSE500 have underperformed and Financials (46),
Engineering (28), Metals (27) and Construction (23) make up the large part.
The Avendus ‘Deep‐value picks’
In this report we have focused on the factors that provide resilience to these
stocks during the ongoing downturn and those that would facilitate a rebound
in their growth, earnings and valuation over the medium term. We also
estimate the potential ‘worst‐case’ value for the stock under sustained adverse
conditions.
TOP PICKS (click on company name below)
No comments:
Post a Comment