Fundamental stock picks:
Investors buy or sell shares of companies. To know which shares to buy or sell, they use research. This tells you whether a company’s share valuations are cheap or expensive based on the current and expected growth in profit of the company. At the same time, they compare the performance of one company with competitors. Any stock picking done based on financials and fundamentals of the company is called fundamental stock picking.
IDFC CMP: Rs. 96 Target Price: Rs. 137 Upside: 42.7%
Company has been focusing on the niche infrastructure financing space and enjoys the best asset quality in its space. IDFC carries sufficient provision buffer to provide for any likely future increase in GNPA.
Falling wholesale lending rates in addition to improved view on capital market related business may act as future catalyst on the stock.
KPIT Cummins Infosystems CMP: Rs. 141 Target Price: Rs. 159 Upside: 12.8%
Company management maintains a positive outlook on continued traction in automotive, manufacturing and utility verticals. Revolo, if successfully launched, can provide a significant earnings boost to the company. Management maintains revenue growth expectations at ~15% in FY14.
L&T Limited CMP: Rs. 861 Target Price: Rs. 889 Upside: 3.3%
The company who has diversified presence in the Indian infrastructure and industrial sector, holds an order backlog of Rs.1.65 trn which provides strong visibility for next 32 months. The company expects a growth of 20% in their order intake in the current year.
Maruti Suzuki India CMP: Rs. 1427 Target Price: Rs. 1584 Upside: 11%
The company among weak domestic vehicles sales is focusing on new export strategies to boost volumes by introducing newer PV models. Increase in localization and SPIL merger benefit will lead to improved margins in FY14. Management expects marginal growth in sales in FY14.
Va Tech Wabag CMP: Rs. 511 Target Price: Rs. 570 Upside: 11.5%
A zero debt company with a benefit of being a cash surplus position, Va Tech Wabag has experienced an increase of over 250% in its order book over the past 4 years. The company’s capacity to own execute large orders is now providing a 32 month order visibility worth Rs. 42.8 bn.
Tata Steel CMP: Rs. 310 Target Price: Rs. 358 Ups ide: 15.5%
Tata Steel India has delivered commendable H1 sales volume growth of 18% Y/Y and has provided a guidance of similar growth in near future. The Europe division production has reached a 2yr high on the back of improved production rates and value added products. TS is the best play amongst domestic steel companies over medium term and should be accumulated on declines on likely week Q2 results.
Technical stock picks:
Analysis here is on the basis of past trends of stock prices, trade volumes and other statistics. The underlying theory is that over time, the movement of stock prices take into account along with the company’s fundamentals. This then helps establish a trend over time, which is likely to be followed going forward.
You thus buy or sell a stock when parameters are giving buy/sell signal with tight stop losses. We have to keep in mind that nothing is “certain” either technical or fundamentals. It’s a game of probabilities and accordingly we have to trade or invest in the market.
Infosys Tech: Buy: CMP – 3308
The stock has completed one more leg of correction and heading for the target of 5000. It will arrest at 3500 but again on corrections it will attract value buying. On the down side it has big support at 3000. Buy at 3350 and 3050 with a final stop loss at 2700 on a weekly closing basis, for the target
Mcdowell: Buy CMP – 2577
The stock is moving with trendline support. Technically it seems that the stock has good amount of momentum. 2750 is the hurdle area for the stock. Sustaining above 2750 will be interesting for the higher side target of 3700. Buy at current add more if it dips to 2350 with a stop loss at 2200 on a weekly closing basis.
Tata Steel: Buy CMP – 329
As per quarterly charts the stock has paused and reversed the prevailing trend of bearishness. It will again bounce back to 420 or 470 in coming few months. Buy at current and balance at 285 with a final stop loss at 255 on a weekly closing basis.
Reliance: Buy CMP – 903
It seems that the stock is absorbing selling pressure that it has in the region of 900. Above the level 900 it has next major hurdle in the range of 1100 and 1150. Buy in three phases, 30% at current, 30% at 830 and balance 40% at 780 with a stop loss at 750 on a weekly closing basis for the target 1150.
Nestle: Buy CMP-5525
The stock is into consistent and gradual up move. It turned volatile in the first half of the year 2013; however it is stabilizing above the level of 4900. Based on overall performance it should quote at 7000/7500 in the long run. Buy 50% at current balance at 4900 with a stop loss at 4700 on a weekly closing basis.