Buying in Over-Sold Stocks

Recovery in JP Group


From the beginning of 2017, we have seen a rapid buying in over-sold stocks among which most of the lies around Rs.10. JP Group is the best showcase of that buying. JP infra and JP power that were I had recommended to buy had now gave almost 40 percent return as compared to 2 month previous price. Surprisingly, JP associat with loss of almost 1000 crore in Q3 had gave 90 percent return. Fundamently, I believe JP infra is the best stock in JP group for any investment.

Election in UP is going on and results will be disclosed on 11 March 2017. According to many experts, chance of BSP for making Government in UP is more than BJP and SP-CONGRESS. Major portion of Vote-Bank i.e Muslim Voters are with BSP. If BSP won the elections, than we can a see a rapid change/Growth in the JP group.

Jio-Offer and telecom stocks


The next group i.e telecom stocks had also shown a great and unexpected rise. Idea from levels of Rs.72 had gave returns of almost 60 percent in just one week after Big News of Merger with Vodafone. Bharti Airtel and MTNL have also shown rise of 20 percent in last one month. But as the Jio-Offer would continue till 31st march, numbers of telecom companies would remain under pressure. And only after Q1 of FY18, we could see a improvement in Numbers of telecom Companies. Although, any investment in idea and airtel would be risky for short term because of weaker numbers and grown share price. If anyone is going to invest in telecom sector, I would advice to invest in Rcom because of several reasons. First, Company doesn’t earn their income mainly from retail and wireless business. They also run digital T.V services, cloud exchange services and few others services which had not been effected. Retail business i.e direct service to consumer, holds minor portion of income of Company. Second, company is working on improving their strength in market with Aircel merger, MTS acquisition and virtual merger with Reliance Jio( Spectrum trading/Sharing with Jio ). Third and last is that stock is around its life-time low which really doesn’t looks Suitable as the future of company seems to be positive. In short-term, stock can be in volatile state. But on long-term basis, Stock is going to be outperforms the market.

Metal Companies with Good Q3 Quarter

Metal Companies are still in upward trend after giving such a great return. Vedanta, from levels of Rs.58 is now trading around Rs.250. Tata steel and Hindalco have also gave returns of 140 and 200 percent respectively. In last one year, prices of finish metal had rised more frequently than Raw material. Increased demand in China is also one of the reason of good Q3. However, Q3 of Metal Companies was so good that they can even give 20 percent more return from present levels.

Real Estate sector with weak growth

This year, stock of many Real Estate Companies have also gave better returns. Stocks like unitech, DLF and HDIL grown almost 20 to 40 percent. But due to Demonetisation in last of 2016, we have seen a large disparity in Q3 Numbers of Real Estate companies. But I think Q4 would be comparatively better than Q3. However, Real Estate business is a matter of Public choice. And with the growing demand of having a flat rather than personal home due to Decreasing plain area in our nation, i believe Real Estate Stocks are good to invest with long-term prospective. Although, due to weak Q3, Real Estate sector would not be able to outperform the market in short-term.

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One thought on “Buying in Over-Sold Stocks

  • February 18, 2017 at 4:39 am
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    Very wise speculation

    Reply

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