Ridham Desai Of Morgan Stanley Recommends 11 Top-Quality Mid-Cap Stocks

Peak of scare and despair reached: Dalal Street’s under-performance to reverse soon

It is a matter of grave concern to all investors that Dalal Street has been under-performing its global peers over the past few weeks.

According to data produced by Surabhi Upadhyay, the Dow has soared 8.9% while the Nasdaq has surged 11.5%.

The entire MSCI Emerging Markets Index is up 9%.

In sharp contrast, the Sensex and Nifty have given a beggarly return of only 1.4% in 2019.

The Mid-cap index and Small-cap Index have fared much worse and disappointed by losing 6.5% and 7.3% so far.

#Nifty at 11000 again, but…
40% of #Nifty50 stocks down 5-20% since start of 2019
SO FAR THIS YEAR
Nifty: 1.4%
Bank Nifty: 0.8%
Nifty Junior: -5.9%
Midcap Index: -6.5%
Smallcap Index: -7.3%
MEANWHILE#Dow: 8.9%#Nasdaq: 11.5%
MSCI EM: 9%
Brazil: UP 29% !!#stocks #stockmarket

— Surabhi Upadhyay (@SurabhiUpadhyay) February 6, 2019

However, the shocking aspect is that India has under-performed all other countries and is at the absolute bottom of the list.

This is revealed by data produced by Charlie Bilello of Stock Twits.

“The world is booming again … 46 out of 48 country ETFs are positive thus far in 2019 with an average return of +8.7%,” it is stated.

The world is booming again. This: https://t.co/PaGLY6rD9e

— StockTwits (@StockTwits) February 16, 2019

Sunil Singhania has opined that Dalal Street is seeing a “peak of scare and despair” and that a “more positive outlook” is around the corner.

It may be recalled that Sunil Singhania has already advised us on the sectors and stocks that we have to focus on to be able to reap maximum benefits (see Time Is Ripe To Buy Beaten Down Mid Cap Stocks For Multibagger Gains)

After a long time, seeing green across stocks that have recently borne the maximum pain. Is this signalling a peak of scare and despair and do we see a more positive outlook going forward? Though early to b sure, makes sense to start thinking on positive lines 🙂 Always Positive

— Sunil Singhania (@SunilBSinghania) February 14, 2019

Sensex will surge to 42,000 by September 2019

Ridham Desai is known to be an incorrigible optimist.

He has earlier opined that the Sensex is likely to surge and touch its target of 42,000 by September 2019.

Good morning! Ridham Desai, Morgan Stanley
Raises Sensex Target To 42,000 For Sep 2019 From 36,000 In June
Says Indian Equities Continue To Be In An Uptrend
Adding SBI, Apollo Hospitals & Prestige Estates To Portfolio @rndx1

— Sonia Shenoy (@_soniashenoy) September 14, 2018

He has also advised that we should not be scared of volatility but should embrace it and welcome it because it gives us the chance to tuck into high-quality stocks at bargain basement prices.

“There is always uncertainty, sometimes good or bad. But if you pay the right price, you make money,” he stated.

There is a lot to worry about around the world but share prices become cheap only when there are things to worry about: Ridham Desai, (@rndx1), @MorganStanley
Watch the video here: https://t.co/aK4UDBHrQX#ETMarkets

— ETMarkets (@ETMarkets) October 12, 2018

Morgan Stanley's Ridham Desai (@rndx1) believes valuations are much more lucrative than they were last year. #Diwali

Read: https://t.co/cV6ckmtRLn pic.twitter.com/K1tNI5DgJH

— BloombergQuint (@BloombergQuint) November 7, 2018

Forget NBFC stocks, Corporate Banks will double & give 100% gain

In his latest interview, Ridham Desai has come out with all guns blazing in favour of private corporate banks like Axis Bank, ICICI Bank, HDFC Bank, Kotak Bank etc.

He explained that corporate banks are coming out of a “seven-year down cycle” and that their balance sheets are repaired and earnings will boom.

He also opined that the competition from NBFCs has waned and will not come back in a hurry.

“We are into a new capex cycle and the stocks are cheap. So, probably a slew of them, from largecap to smallcap could double in the next couple of years,” he said emphatically with a big smile on his face.

“For anybody who is willing to give himself three to five years I think we are in an upcycle and we should make pretty good returns on stocks over the next three to five years,” he added, bringing cheer to beleaguered investors.

Model portfolio of 11 best mid-cap stocks

Now, we can turn to the most important thing, namely, the 11 stocks recommended by Ridham Desai.

The list is as follows:

It is quite obvious, even on a casual glance, that Ridham Desai has invested quite a bit of time in cherry-picking the aforesaid 11 stocks.

The first point worth noting is that all the 11 stocks are well known and popular stocks with reputed managements and long track records. Thankfully, there are no “chor” stocks in the list.

The second point is that most of the stocks are in the doldrums, with some having lost as much as 40% of their valuation in the past one year.

This is a good thing because it implies that the stocks are at the bottom of the barrel and are drained of all expectations.

Such stocks are unlikely to plunge further but will instead surge like rockets if the sentiment turns positive.

The third point is that Ridham has ensured that the portfolio is properly balanced with representatives of all sectors.

There are two real estate stocks, two Pharma/ Hospital stocks, FMCG, Hotels, FMCG/ Consumer, NBFC and Auto Ancillaries.

The focus on real estate stocks is a sensible thing because experts are expecting big-bang reforms for the realty sector.

#EXCLUSIVE | Sources to @NayantaraRai: PMO, FinMin in favour of big ticket GST rate rejig to revive housing market. 2 proposals on reviving housing market may be placed before GST Council @GST_Council @PMOIndia @FinMinIndia #GST @askGST_GoI pic.twitter.com/45jxB9B3hh

— ET NOW (@ETNOWlive) December 19, 2018

Even a stock which will benefit from internet penetration is there in the portfolio, namely, Just Dial.

Just Dial is said to be Google’s arch rival, at least in the context of local searches.

Morgan Stanley's Ridham Desai (@rndx1) believes that the gap will close with the broad market rising rather than the Nifty falling and recommends 11 midcap stock ideas.

Read: https://t.co/CpIDYfCzM1 pic.twitter.com/dkf72bpzL6

— BloombergQuint (@BloombergQuint) February 11, 2019