While each one has to make his/her own judgement, as a general advise , I would think that the markets have come down to an extent where buying select shares is safe and could provide good return in the medium to long term. Index may come down a bit further but even at this level , I think there is value in the following shares in the small number of Companies that I follow. These are Cmpanmies I am invested in or planning to invest
1.
TN Newsprint- EPS around Rs 16, PE at a price of Rs 96, just 6 with very good visibility of atleast sustatining the earnings. Have consdierarble windpower capacity ( 30 plus MW), are commissioning a Cement clinker plant, expanding the paper and pulp capacity
Low marker capitalisation of around Rs 700 Crs . Pay dividend of Rs 4 per share
2.
Seshasayee paper- Qtr 4 appears a bit lower. Reasons not ascertainable at this point of time. Even discounting that, EPS of a minimum of Rs 30 next year is easy, PE at current price of Rs 170 would be less than 6. Pulp expansion plan underway.
Low marke capoitalisationb of around Rs 240 Crs
Paper Industry has been a low profile Industry. This is one of the reasons why the PE s are low.
You go back, you will find that very few well run paper Companies have ever made loss in the past in India.
3.
Sonata software- At Rs 31 with EPS of Rs 3.5 ( Consolidated EPS Rs 5.8 including their European subsidiary ) could turn out to be a good acquisition target. Market cap of only Rs 35o Crs
Current management is too conservative and have not expanded business much. The Company , however has enough reserve strength and intrinsic value to get to Rs 75-100
4.
Sundaram Brake linings - EPS should be around Rs 35, PE of around 7, market cap of Rs 70 Crs. Could give 25-30% Compounded for the next 3 years.
5.
Dark horses- Oil trading Companies HPCL, BPCL
Market caps are low, below Rs 10 k Crs. Oil can not be traded at these levels. TRhe moment it comes down to below $ 100, these can turn out to be multi baggers. Of course this is a bit risky, personally though I see greater opporunity than risk in this proposition
6.
Zensar Technologies- At Rs 137 is down from Rs 350 a year back. PE of 13. Part of HV Goenka group
7. Most of the A Group shares which have fallen by more than 50 % in the last 6 months could hold value
May be a chance to spread portfolio across sectors being stock specific across sectors.
Some construction Companies which have not caught market fancy like
JMC projects. Of course , in this case onw is not too sure about the management part. One has to do some research
Sundaram Finance- Holds more than 50 % in Royal Sundaram Insurance .By itself has a fantastic network and has been a consistent performer , very disciplined management
Has the potentiel to double in a year or two
Sugar Companies- Most of the commodities are up and hyped except a few like Sugar. Government can not let this Industry die. Cane prices are fixed , sugar prices are down. Situation can not continue like this. Bit of a risk, but worth taking the same
Textiles-
Vardhman. Low PE. Last quarter profit was low, but at a market cap of Rs 600 Crs with a turnover of Rs 2000 Crs plus , with impact of recent expansions to come through n the curent year, appears to be a value buy. Current aset managemnt is the only blot. Most of the negatives have been deeply discounted like
Rupee appreciation
Low demand from export markets especially US
This Company depends a lot on doemstic market, performance should be reasonable. hey pay a consistent dividend of Rs 4, yeild of around 4%
Should be worth the risk