NIFTY 50 had given a returns of 1.22% in the past one year, and in 2016 from year to date it has given a return of 8.68% so far. Market is very close to its 52 week high, but looking at the returns it does look like we are sitting at the bottom and there is more room for market to go up. But we don’t think so.

We also don’t know where the market is heading in the coming future, but we do know few stocks that we like will keep going up. Which tells us that investments in the stock market should be stock specific not market specific!

We do share every month the list of 10 stocks that we look for extensive research for our investments. This list doesn’t change much, but you will see few stock names enter the list and then disappear the very next month or in couple of months. This mostly happens because they move out of our intrinsic value bands.

Let me share the filters that we use to build this list every month (we do this exercise every week) and why it is so powerful list to do extensive research on those businesses.

  1. We only build this list from the universe of our stocks (Quality grading of: A1, B1 & A2).
  2. We make sure that there are other analysts who are following these stocks and have detail reports for us to cross check our analysis (Many times we find our reports contradict with them, which is good, because then we have our own individual opinion on the specific stock, for example we recently shared our view on JK Bank).
  3. The ROE > 10%
  4. They are expecting positive earnings growth (profits are expected to rise every year) at least > 10%.
  5. Forecast intrinsic value band is climbing up.

So below is the top 10 stocks to do further research and to add them in your watchlist.

jk bank logo Stock Price trading within 2017 intrinsic value band
mark logo Stock Price trading above 2017 intrinsic value band
kitex Stock Price trading above 2017 intrinsic value band
alembic Stock Price trading above 2017 intrinsic value band
eicher Stock Price trading above 2017 intrinsic value band
cadila logo Stock Price trading above 2017 intrinsic value band
berger logo Stock Price trading above 2017 intrinsic value band
ipca logo Stock Price trading above 2017 intrinsic value band
ongc logo Stock Price trading above 2017 intrinsic value band
indiabulls Stock Price trading within 2017 intrinsic value band

 

Not many businesses from the list above are trading today at cheaper valuations. The valuations of these businesses are calculated on the basis of analysts’ earnings expectations, not on the basis of our in-house analysis.

Aziz Dodhiya is the chief investment officer for the Valueoperations funds which operates in the Indian market as an FPI (Foreign Portfolio Investor). We do not offer any personal advice to buy or sell any stocks and the views that are shared by Aziz might not incline to your personal investment strategy and this is the reason we advise you to take professional advice before going ahead with our views.