We practice value investing and also advocate to practice value investing to all investors. But we are not the old fashioned like Graham and looking for those “cigarette butt” strategy where there is still chance to puff couple more.

We believe in buying cheap stocks but same time we also believe in to buy quality stocks only. Secondly, we also look for businesses where there is good prospect to grow its earnings.

So our new formula for investments is value stocks with growth prospects. Here are the four stocks that we are keeping an eye on this month. We believe they are trading within their 2018 valuation zone, hence, good opportunity to have exposure on them as per our investment conviction. We also found that many analysts expect them to grow their earnings in 2018.

Company Expected Earnings growth for 2018
Zensar Technologies 68%
Kitex Garment 69%
Asahi India Glass 81%
Tata Elxsi 47%

 

Caution: Please conduct your own research to identify if they are quality stocks and also build your own investment conviction on these ideas. Here is the help if you want to know where and how to start your analysis.

Zensar Technologies

Zensar Technologies reported profits of Rs 221 crore in the 2017 financial year. Analysts expect that its 2018 profits will be in range of Rs 345 – 375 crore. Your job is to find can they achieve those profits. Because if you believe they have a good chance to report profits in those range then it’s worth investing in this stock at current price.

Kitex Garment

We have written about Kitex Garment on this blog and you can read our recent views about it by clicking over here. Analysts expect its 2018 profits in range of Rs 130 – 147 crore. If its profits fall in that range then even Kitex Garment is also worth to invest at current market price.

Asahi India Glass

Asahi India reported profits of Rs 131 crore in 2017. One of the analyst expects its 2018 profits of around Rs 235 crore. If that turns out right than Asahi India Glass looks little cheap. I will be sharing my views more in detail about this company later in this week. So, stay tuned.

Tata Elxsi

Tata Elxsi reported profits of Rs 173 crore in 2017 and one of the analyst’s report expects its 2018 around Rs 250 crore. If you consider they have that potential than even Tata Elxsi looks good to invest at today’s market price.

Disclaimer: We have exposure to all the above four stocks as per our conviction level in those ideas. We keep check regularly on its valuations and re-look at our conviction level every quarter.