Best Stocks to buy Today & Top Sectors to invest now in September 2018.
Hand picked Best Stocks to buy Today & Top Sectors to invest now in September 2018. Sectors that are finding strong momentum in recent times are short listed below. The following stocks can be used to build a decent portfolio which can be shuffled once in a quarter depending on the sector outlook and quarterly results from the stocks.
Top 10 Sectors/ Industries
- Private Banking
- Agro Chemicals
- Breweries and Distillers
- FMCG and Consumer Food
- Paper & Paper Products
Best Stocks to Buy Now
We are still identifying quality stocks from Retailing sector as most of the stocks have already rallied and are far from their moving averages and looks over priced fundamentally too.
We like Cyient, Tech Mahindra and Hexaware in Tech stocks.
Enter Cyient on dips towards 700-710. Target 850. Sl 670. 3 months.
Enter Tech Mahindra 650-670. Target 760. SL 630. 3 months. [Target hit.]
Enter Hexaware Tech 470-485. Target 560. SL 440. 3 months.
Rupee weakness helps Pharma Rally. Enter Jubilant Life and SMS Pharma.
Jubilant Life. Share price: 820. Add on dips towards 780-790. Target 1050. 3 months. 30% upside. SL 750.
SMS Pharma. Share price: 84. Target 106 and 120. Time: 3 to 6 months. 25-42% upside. SL 72.
Sector- Auto Ancillaries
There are lots of Auto Ancillaries that are available are good prices. We like stocks like Subros, Jamna Auto, etc.
In Private sector Banks, we like DCB bank & City Union Bank. Karnataka Banks is our value pick among the stocks. Stocks like RBL Bank, Bandhan Bank & AU Small Finance bank have growth visibility with good management, these stocks can be added on 5- 10% dips.
Sector- Pesticides & Agro Chemicals
Stocks are been shortlisted.
Sector-Breweries and Distillers
We like GM Breweries in this sector. Stock looks fundamentally cheap among peers and has good 30% upside in 6 months. Look for technical indicators before entering the stock.
Sector-FMCG and Consumer Food
We have recommended ADF Food recently with a target of 340 in 6 months.
ADF foods looks good for a year. Stock Price: 250. Target 340.
We have a Fundamental Target of 4 times book of 340. Stock is trading close to 3 times book. We see a strong growth in the stock going forward and a potential upside of 34% in a year.
Technically stock has good support at 220 and resistance close to 260.
Buy ADF Foods above 265. Target 340. 6 months. SL 220. Add on dips towards 240-245.
We like Bajaj Corp. We have a target of 675 in 1 year time.
Sector-Paper & Paper Products
Strong Momentum in Paper stocks. 2 Paper stocks with 40% upside potential.
- JK Papers. Share price: 180. Target 240. Buy on dips towards 170. SL 155 (Closing Price.) 6 months.
- Ruchira Papers. Share price: 150. Target 210. Buy now and on dip towards 140. SL 130. 6 months,
Stocks can reach target in 3 months with the current momentum.
Sector-Other: Best Stocks to Buy Now
mber Enterprise can double your investment in 2 years.
Stock price: 945. Target 1250. 6 months. SL 870. We are expecting a technical break about 1020 in a short while.
Amber Enterprise is on AC segment, we can see a strong growth in revenues over next few years. The stock is also trading close to 25x annualised recent quarter EPS. We expect the stock to trade at 40 time EPS. We expect the stock to high 2000 in less than 2 years time.
Find Stocks to Buy Now [DIY]
Make a portfolio of certain stocks with the following criteria:
Stock must be in top 3 Margin% in its industry. (Stock having strong margins are the industrial leaders with demand for investment.)
Stock must be in top 3 ROCE/ROE in its industry. (Stocks with better ROCE/ROE are the stocks with best management and can help investors with Good returns.)
Stock must be have low PE ratio in its industry. (Stock with low PE ratio has not priced-in the future returns of the company, more chances to find quality investors and have more changes to post multibagger returns on quality results.)
Stock must have low Price to Book in its industry. (P/B is one of the evaluation factor to identify if the stock has run up too much in recent times. Avoid P/B above 10–12)
Stock must have low EV/EBITA (Stock given multibagger returns in short span will have this value higher. Less the value, more space the stock has to rally in the near future. Avoid EV/EBITA above 20.)
The above Portfolio will give you maximum returns.
There are 3 phases in a stock’s multibagger rally.
- Rally to cover basic EPS of the share.
- Rally to cover the Next one year EPS of the share.
- Rally to cover the next 3 years EPS of the share.
Let me explain in Brief
Let us assume a stock is trading at 120, Industrial PE: 12 and EPS over last 4 quarters as Rs. 3 each quarter. Annual EPS is 12.
Current Trailing PE is 120/12= 10 which is cheaper compared to Industry. Stock can rally 20%.
Once a quarterly results come with a EPS of 4. then Trailing EPS becomes 13.
Current Trailing PE becomes 120/13= 9.23. which is cheaper compared to other Stocks in the industry with upside of 30%.
Some investors think what if the stock can post same results for next 3 quarters with EPS of 4 per quarter. Then Annual EPS becomes 16.
PE after 9 months becomes= 120/16 = 7.5. Which is cheaper compared to the industrial PE of 12 and has upside of 60%.
After 3 months:
If the results shows growth in sales, profits and EPS for the quarter is posted at 5.
PE for the annualized EPS of 5 become= 120/20=6. Which is cheaper to its industry and has 100% upside.
Just in 4th month, the stock has 100% upside.
Investing in stocks with 20–30% upside in 3 months will give a good leverage to bet on the stock for atleast 2–3 years.
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