Being a value investor, I have not ventured into buying Growth stocks in the past 4-6 years. Whenever I have bought Growth stocks at fair or high valuations, have received not so optimum returns and have moved back to value investing.
MOST is good at researching into growth stocks, and do give recommendations at high valuations but some of those in the past have proven quite not so good. Some of the highly valued stocks in IT such as TechM, HCL Tech have corrected once their growth suddenly drops from above normal to below normal, so one has to be very cautious if you are paying for PE of 50 and above.
My assessment is that, competition is increasing in all sectors and some of the decent 30%-35% growth stories are seen suffering today with modest 20-25% growth and have not sustained high 50+ PE valuations for long time. It looks tough that, 35% growth will be sustained by PAGE for next 8-10 years to justify such high valuations. Being a cautious investor, I may sound pessimistic, but Mr. Market sometimes in sad mood can bring down valuations of strong business to realistic levels.
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