Tracking what the Market is Doing with the Biggest Stocks
This bi-monthly product tracks key 12-month drivers for stocks in the Nifty index. We reckon these drivers include a) sell side consensus opinion; b) institutional ownership; c) relative valuations; d) ROE; e) consensus earnings expectations; and f) long-term relative trailing performance. All these indicators are plotted in a time series so investors get a picture of the current value as well as change over time.
Our argument is that for a 12-month view, apart from the usual fundamental debates, investors need to assess how bullish (or bearish) the sell side – the more bullish the less likely the stock performs, the level of institutional ownership – higher ownership is headwind for stocks, relative valuations – richer valuations become an impediment, earnings expectations – while falling expectations are bad, if earnings growth expectations fall too low, it could well become a support for shares and finally ROE which is the most important fundamental factor. Indeed, we may quickly point out that sometimes the consensus is right so taking a counter consensus view does not work. Yet, the objective of this work is to pinpoint extreme cases of mispricing.
The stand out stocks from Nifty
Based on the recent changes in institutional ownership, change in ownership, sell-side ratings, change in ratings, earnings revisions, trailing performance and change in relative valuations, it appears that IndusInd Bank, ICICI Bank, ITC, Lupin and Maruti are the stocks where the consensus is most bullish and Hindustan Unilever, Tata Steel, Jindal Steel and Power, BHEL and Tata Power is where the consensus is most bearish
No comments:
Post a Comment