3 Top Oil Stocks to Buy in January

After a sharp and painful downturn, oil prices spent the vast majority of 2017 above $50 per barrel. And over the past six months, prices have steadily increased, to the point where Brent crude is getting close to $70. That's a level we haven't seen since 2014. And while there's some risk -- and even some expectation -- that higher production in 2018 will bring prices back down, oil companies are able to make money at far lower prices than they could even two or three years ago. 

Even better for investors, the market still hasn't come back for a lot of solid oil stocks. Our contributing investors particularly like Transocean LTD (NYSE:RIG), Hess Corp. (NYSE:HES), and Royal Dutch Shell plc (ADR) (NYSE:RDS-A)(NYSE:RDS-B), and think they're worthy investments to start 2018. 

A best-in-class operator trading at fire-sale prices

Jason Hall (Transocean): Since 2014, spending on offshore oil and gas investments has fallen every year. Essentially, every drilling contractor has been forced to scrap and idle vessels to cut costs, and competition for the trickle of new contracts awarded has been fierce, driving dayrates down substantially. This put several big drillers out of business, several more in bankruptcy even now, and saw a significant amount of consolidation, as companies went into survival mode. 

This destroyed billions of dollars in wealth, but has also created wonderful opportunities. Right now, Transocean strikes me as an excellent risk-reward investment. Since the oil-price peak in 2014, Transocean has cut its debt and liabilities more than 30%, cut expenses, cleaned up its fleet, and maintained a strong cash hoard to support any cash-flow shortfalls.

This also gave management the ability to act quickly if the right opportunity emerged. That opportunity emerged last year, when Transocean acquired Songa Offshore and its high-spec fleet that already has more than $4 billion in backlog contracts. 

IMAGE SOURCE: GETTY IMAGES.

As we enter into 2018, the offshore market has started to thaw, and Transocean is leaner than it was at the outset of the downturn, and with a better fleet. It's also far cheaper, with shares trading for 36% of book value. For context, Transocean traded for 1.2 times and higher for much of the past decade -- 3 1/2 times  higher than the current valuation. If offshore shows even minimal spending growth from here, Transocean is primed to be a steal. 

A turnaround play that's already turning

John Bromels (Hess) With oil prices currently above the $60/barrel mark, there are lots of opportunities for outperformance among oil companies. The problem is, the market has already caught on and has bid up the shares of many of 2017's biggest losers in anticipation of a strong 2018. Luckily for investors, there still may be time to pick up some of these underappreciated gems -- like Hess.

Hess is a bit of a hidden gem among independent oil and gas exploration and production companies. While it went into debt during the oil-price slump of 2014 -- along with practically all of its peers -- the company has kept its debt load manageable, with a debt-to-capital ratio of 33.8%, among the lowest in its peer group. Hess also has $2.5 billion in cash on hand to fund its growth plans, which include embarking on a promising offshore joint venture with ExxonMobil in Guyana, and adding rigs to its leading position in the Bakken Shale.

IMAGE SOURCE: GETTY IMAGES.

In spite of all this, Hess's shares fell 23.8% in 2017. And even since oil prices started to rise about six months ago, the company's stock has lagged the performance of its peer group -- as measured by the SPDR S&P 500 Oil & Gas Exploration & Production ETF. But all of that's starting to change. Hess's shares have already jumped 10% this year. That makes January a great time to buy into this surprisingly stable oil company. 

Re-positioned and poised to perform

Tyler Crowe (Royal Dutch Shell): It wasn't that long ago that Shell looked like a questionable investment. After acquiring BG Group back in 2015, the company was undergoing a complete corporate restructuring that involved $30 billion in asset sales. For anyone looking at the situation at the time, it was hard to say exactly what kind of performance an investor could expect when so much of the company's future depended on how that restructuring played out.

Today, though, that corporate shakeup is nearly complete, and the company looks like a much stronger company than it has in decades. CEO Ben van Beurden has transformed the company from one that typically lagged its peers in terms of returns on capital employed to a business geared toward consistent double-digit returns and generating gobs of free cash flow.

It hasn't quite reached those levels of return just yet. With international oil prices around $65 a barrel today, there's a good chance we could see those kinds of returns sooner rather than later. 

On top of that, it looks like Shell's stock still is trading at a reasonable valuation. When you combine all of these elements together, it would appear that Shell is the best buy among the integrated oil and gas majors. If you're looking for oil stocks in 2018, Royal Dutch Shell could be a good place to start.

MORE WILL UPDATE SOON!!

3 Top Tech Stocks to Buy in January

Technology stocks performed very well in 2017, with the Nasdaq 100 index (which tracks tech stocks) gaining more than 37% over the year. But that doesn't mean tech stocks are finished growing. If you're looking for long-term tech investments, you can still find strong tech companies that should leave you looking back on 2018 with delight.

We asked three Motley Fool contributors what tech stocks are looking good in January, and they came back with Etsy (NASDAQ:ETSY), Square (NYSE:SQ), and Shopify (NYSE:SHOP). 

 

An e-commerce site ready for its closeup

Jeremy Bowman (Etsy): Crafty online marketplace Etsy struggled through 2017. The company experienced two waves of layoffs and a change in its CEO after activist investors sensed the need for a shakeup. The moves seem to have worked, as the stock has risen 82% since May when activist investors like Black-and-White Capital first acquired a stake.   

But there's good reason to think that the stock could continue moving higher through January in anticipation of the company's fourth-quarter earnings report. The holiday season is generally a bonanza for retailers, as sales and profits surge in the weeks before Christmas, but Etsy has mostly missed out on the party. While sales on the platfrom do rise in the fourth quarter, it doesn't get the same spike that other retailers do, which is surprising considering many of the wares on the site are perfect for gifts.

New CEO Josh Silverman spotlighted this as a problem in the company's most recent earnings report, saying that historically shopping on the site had fallen off in Mid-December, a time when it usually peaks at other retailers, especially online retailers, which help consumers save time in the last-minute crunch of Christmas shopping. Shoppers didn't think Etsy could compete with discounts or fast shipping.

This year the company has provided tools for its merchants to help shoppers find gifts or items on sale and get fast or free delivery. We won't know how Etsy fared until the company reports earnings in February, but we do know that holiday sales experienced their biggest spike since 2011 and that online sales were up 18% during the period, according to Mastercard'sShopperTrak.

That's a bullish sign for Etsy to top estimates in the key holiday-quarter report coming up.

Hip to be square

Todd Campbell (Square): A financial company with a technology kicker, Square is my top technology stock to buy this month.

Square's hardware and software solutions connect merchants to buyers at craft shows, retail stores, and online, and its agnostic approach means it can process payments regardless of whether they're made by tap, dip, or swipe.

Square's APIs allow sellers to integrate Square with their other business systems, and Square's software allows them to track their sales from any device, anywhere, at any time. According to CEO Jack Dorsey (who, by the way, is also Twitter's CEO and a Bitcoin investor), Square-connected apps have been built for "everything from tea shops to taxis."

Greater integration with other business software solutions, such as SAP Business One, allows Square to compete for bigger, revenue-friendly accounts. E-commerce, invoicing, and instant cash connect Square more deeply with its merchants while providing it with a bigger share of their sales. For example, Square gets a flat 2.5% of sales when its reader is connected to a merchant's device, like a tablet, but it collects a 2.9% rate, plus a $0.30 per transaction fee, for e-commerce transactions, and a 3.5% rate, plus a $0.15 per transaction fee, for virtual terminal and keyed-in transactions.

Sales are growing at an over-30% clip, and I think buying shares ahead of fourth quarter earnings in February makes sense. A larger customer base and a strong holiday season could allow Square to overdeliver on its forecasted net revenue of between $585 million to $595 million and adjusted EPS of between $0.05 to $0.06. Still looking for reasons to add Square to your portfolio? Consider that Dorsey's well-versed in cryptocurrency and blockchain, and his plans likely include positioning Square to benefit from both.

A strong e-commerce play 

Chris Neiger (Shopify): E-commerce is hardly a new investing idea, but unlike the old days where investors were essentially focused on big players like Amazon.com, there are now plenty of smaller players that are making big waves in this space. Shopify is a case in point.

Shopify provides cloud-based platform software and services to small, medium, and large businesses, and its wide array of offerings and tiered pricing have propelled the company from a niche player into a merchant platform powerhouse.

Merchants can use Shopify's platform for everything from online and mobile payments to shipping orders and social media management. The tiniest small business can tap into Shopify's services for as little as $9 per month, but its largest customers shell out up to $40,000 a month for the company's top-shelf Shopify Plus services. The company is doing a fantastic job winning bigger customers, and as a result Shopify Plus accounted for 20% of monthly recurring revenue (MRR) in the third quarter 2017. 

Companies big and small are seeing the benefits of Shopify's platform, and since 2015 the company has grown its total subscribers from 200,000 merchants to more than 500,000. Shopify's top line is growing quickly as well, with sales in the third quarter growing by 72% year over year and transactions conducted through the company's platform increasing by 69%, to $6.4 billion.

Investors should know that the company isn't profitable right now, but the expansion of the e-commerce market should help the company to continue to grow. U.S. sales from e-commerce are expected to hit $638 billion four years from now, up from $409 billion last year.

Shopify's shares have already jumped 138% over the past 12 months, but that doesn't mean the stock has finished its run. The company needs to continue releasing in-demand features for its platform (which it's already doing) and grow its merchant customer base and earn more from each of its customers (which it's also doing) -- and if it keeps that up, then investors will be pleased they added this stock to their portfolio now instead of waiting on the sidelines.

Top 12 high conviction stock ideas to make money in 2018

Calendar 2017 proved to be a spectacular one for the domestic equity market, with the benchmark equity indices gaining nearly 28 per cent on the back of various reform measures that the government has implemented through the year. 

The New Year is expected to be another good year as the results of various policy initiatives taken over the past two years will start to show. 

The BSE Sensex climbed 27.73 per cent to 34,010 on December 26 from 26,626 on December 30 las .. 

The upside scenario is 11,700, based on the assumption that a lot of the structural reforms initiated since 2014 will slowly start helping growth in the formal economy and would help expanding it. Earnings are likely to be on the positive trajectory starting from Q2 of FY19 after spending nearly seven years in the negative territory.

Jamna Auto | Buy | Target price: Rs 95 

Jamna Auto is the largest leaf spring manufacturer in India and the third largest globally (in terms of installed capacity). Anand Rathi Financial Services expects the company's revenues to grow at 13 per cent CAGR over the next three years owing to steep uptrend in the MHCV OEM segment and likely to draw benefits of operating leverage. 

Dabur India | Buy | Target price: Rs 400

With around 70 per cent of its product range in ayurveda, natural and herbals (ANH), Dabur is amongst largest ayurveda and natural healthcare company. Factoring in the direct competition from Patanjali and channel disruption, the brokerage house believes that Dabur can still clock a CAGR of 12 per cent in revenue and 16 per cent in earnings over FY17-20. Anand Rathi recently upgraded Dabur to 'buy' with a target price of Rs 400.

Deepak Nitrite BSE  | Buy | Target price: Rs 264 

The company is one of the leading global players for several niche chemical products used in - colorants, petrochemicals, agrochemicals, rubber, pharmaceuticals, paper and textile. "With the completion of its Phenol project, the top line for the company is expected to almost get doubled by FY-19E," Anand Rathi Financial Services said. The brokerage has a 'buy' rating on Deepak Nitrite with a target price of R 264.

Asian Granito BSE  India | Target price: Rs 642 

Robust outlook of tiles industry (led by lower per capita consumption and expected pick up in real estate sector) augurs well for Asian Granito. Religare further believes that better product mix, focus on B2C sales and higher capacity utilization would result in improved profit growth. "Revenue and PAT are likely to increase at CAGR of around 16 per cent and around 32 per cent, respectively over FY17-20E .

Nilkamal BSE  | Buy | Target price: Rs 2,097 

Net revenue and PAT are likely to grow at a healthy pace, led by demand revival and company's efforts towards brand building, according to Religare. Despite higher oil prices, margins could improve at a gradual pace, led by operating leverage. Market leadership, leverage free balance sheet and healthy cash flows would provide valuation comfort. 

Bharat Electronics | Buy | Target price: Rs 217 

The company is likely to benefit from government's increased emphasis on 'Make in India' and higher defence capex. Strong order book (over Rs 40,000 crore) and healthy order inflow (Rs 13,000 crore) provides greater revenue visibility. Increased investment in R&D will help Bharat Electronics to retain its leadership position in the defence segment. 

Larsen & Toubro | Buy | Target price: Rs 1,450 

The company continues to focus on profitable execution of the large order book, selective order picking, on-time deliveries and operational excellence through digitalisation. The management is also emphasizing on cost competitiveness, continuous optimisation of working capital, restructuring of its business portfolio and value creation with an aim to enhance its return on equity. The government's determined  .. 

Swaraj Engines | Buy | Target price: Rs 2,284 

The management of the company expects good growth for demand of domestic tractor due to government's continued thrust on agri and rural sector, which would help the company to increase market share and financial growth of the company. The central government has time and again reiterated its aim to double farm income by 2022, which has envisaged to be attained through better productivity and enhanced farm realization.Swaraj Engines is a leading supplier of engines for the tractors to market leader, i.e. M&M. The company is one of the key players to benefit from this transition. Thus, it is expected that the stock will see a price target of Rs 2,384 in an eight to 10-month time frame. 

Gati | Buy | Target price: Rs 158 

With its comprehensive integrated service portfolio, Gati is distinctively positioned to support the consequent supply chain realignment. Moreover, the company's pan-India reach has been already designed on a hub and spoke model for efficiency and speed. Over the last few years, the company has undertaken significant initiatives to fortify its stronghold to deliver consistently to customers, by developing end-to-end solution ,enhancing technology capabilities and augmenting operations quality processes. Thus, it is expected that the stock will see a price target of Rs 158 in eight to 10 months. 

Ahluwalia Contracts | Buy | Target price: Rs 473 

The strong order backlog, combined with proven execution capabilities and low-geared balance sheet would help the company to deliver healthy growth in the foreseeable future. The government's increasing focus on the construction industry is expected to generate better order flows going forward. Thus, it is expected that the company would see good growth going forward and the stock will see a price target of Rs .473 in 8 to 10 months.

Apollo Tyres | Buy | Target price: Rs 305 

Apollo Tyres (ATL) currently enjoys around 28 per cent market share in the TBR segment. As radialisation forms only 45 per cent of domestic TB tyre market, Reliance Securities sees a significant scope for radialisation in the domestic CV segment, which would benefit manufacturers like Apollo Tyres, going forward. The brokerage house expects ATL's market share in radial tyre segment to improve on the back of capacity  expansion to meet the rising demand. Further, ATL is expected to benefit immensely with the recent imposition of Anti Dumping Duty in Chinese TBR. Looking ahead, with the likely pick-up in utilisation from Hungary unit and possible improvement in price as no new capacity is coming up in the European region except for Korea-based Nexen, Reliance Securities expects ATL's European operations to witness improvement. 

Kajaria Ceramics | Buy | Target Price: Rs 851 

Kajaria Ceramics (KCL) has a market share of around 10 per cent in domestic ceramic tiles industry, including the unorganised players (unorganised segment accounts for 60 per cent of domestic tiles volume). The brokerage house believes that over the years, the company has laid strong foundation for growth by focusing on creating a strong brand, new product introduction, increasing distribution footprint and higher hare of JVs. Kajaria is well-placed to capitalise on the burgeoning opportunity in tiles industry in coming years. Kajaria Ceramics' own facility at Gailpur went on stream in September 2017 to manufacture high-value ceramic floor tiles with capacity of 3.5msm taking the total annual capacity of the unit to 30.1msm. Based on expected EPS of Rs 22.4, the stock currently trades at a reasonable PE multiple of 32.3x FY19E earnings. 

MORE WILL UPDATE SOON!!

Best Stocks to Buy for 2018 in India

The year 2017 has been a mix of some uncanny events. While, some deliberately forced the markets to dip, others supported the indices to gain momentum. So what shall investors expect from 2018 and what could be some of the best stocks for 2018 to add to your portfolio in the next few months.

After sound analysis and some contemplation, we have picked a bunch of stocks that if researched and added to your portfolio can reap healthy returns. For various investors the definition of sound investing differs. While some are always on the lookout for best stocks in their growth phase, some go in for value investments that are consistent and can prove to be multibaggers in the long run.

  

The following list of best stocks is categorized under Large-Cap, Mid-Cap and Small-Cap based on certain specific parameters and fundamental analysis.

BEST LARGE CAP STOCKS FOR 2018

Companies that have grown with the market and are now steady performers

TATA MOTORS

With an insightful product line and an ever-increasing growth in the sector the stock is awaited to regain its lost charm. A dip in net profit should not deter investors’ expectation. In accordance with high sectoral growth and robust financial the stock is a must have in your portfolio. The current market price provides an opportunity to enter.

After sound analysis and some contemplation, we have picked a bunch of stocks that if researched and added to your portfolio can reap healthy returns. For various investors the definition of sound investing differs. While some are always on the lookout for best stocks in their growth phase, some go in for value investments that are consistent and can prove to be multibaggers in the long run.The year 2017 has been a mix of some uncanny events. While, some deliberately forced the markets to dip, others supported the indices to gain momentum. So what shall investors expect from 2018 and what could be some of the best stocks for 2018 to add to your portfolio in the next few months.

The following list of best stocks is categorized under Large-Cap, Mid-Cap and Small-Cap based on certain specific parameters and fundamental analysis.

BEST LARGE CAP STOCKS FOR 2018

Companies that have grown with the market and are now steady performers

TATA MOTORS

With an insightful product line and an ever-increasing growth in the sector the stock is awaited to regain its lost charm. A dip in net profit should not deter investors’ expectation. In accordance with high sectoral growth and robust financial the stock is a must have in your portfolio. The current market price provides an opportunity to enter.

Financial Insights for Tata Motors

ITC LIMITED

A stock with a comprehensive market share. I stated “Comprehensive” because of its product line and how well the company has pulled out in the tobacco market. The company has managed to decrease debt by huge proportion and has managed to bring its current ratio from 1.70 in 2013 to 3.59 in 2017. The stock has a lot of potential in terms of its financials which will be reflected in its stock price soon.

MOTHERSON SUMI

A popular name for equity mutual funds and value investors, the stock has always portrayed sound financials within the industry and between peers. The company has managed to increase its asset base as a firm in the Auto Ancillary sector with a robust P/E which is evident from fundamentally strong revenue growth. The stock is currently trading at less than its 52 week high and could be a good investment if you are looking at a 5-7 year horizon.

BEST MID CAP STOCKS FOR 2018

Value is what a company generates, Returns are what Investors Get

As a value investor myself I am always on a lookout for firms which exhibit strong financials and a unique product composition. Most companies in the mid-cap space have outperformed markets on various fronts teamed with intense risk. While going in for mid-caps seek companies which have a robust moat or a deliverable competitive advantage, difficult to replicate.

MINDA INDUSTRIES

With a CAGR (Compounded Annual Growth Rate) of 20-25% due to strong sectoral growth clubbed with addition of new products the stock is currently trading at an all-time high. The company has carved a niche for its products in the Auto Ancillary sector with robust margins, additional capacities and dynamic improvement in its top-line numbers. I first came across this stock when I was seeking the portfolio of a mutual fund that I owe in March 2016 and ever since then, it has been on a splurge.

AUROBINDO PHARMA

If you glance at both the top and bottom line figures of the firm, you can see evidences of the turnaround the company has witnessed. A lot of portfolios have been shuffled in contrast with Sun Pharma where people are relying on Aurobindo for its viable growth. The stock seems reasonably placed and with growth resonating every quarter you can’t aim to miss on the huge potential it stores. Profit making capabilities of the firm is intense, so are the unique markets it seeks to enter like Europe for inorganic growth. Its specialized segments include drugs for a wide variety of generic and contractual ailments and diseases.

AMARA RAJA BATTERIES

Though the stock seems a bit over-valued than its peers in the auto battery space, it’s a good inclusion in your portfolio. The stock has provided close to 30% returns in the last successive years on a per year basis. Last week the shares of the company saw a tremendous intra-day hike of 4.7% after it commissioned a two-wheeler battery plant in Chittoor. The management of the company inflicts a sense of comfort since it seeks to enhance its company’s operation through expansion.

BEST SMALL CAP STOCKS FOR 2018

Small seems nasty but returns on these stocks can be a game changer and might turn out to be the best stocks for your portfolio.

ULTRAMARINE AND PIGMENTS LTD.

With a 20% rise in its stock price, the company is hard to neglect. The company posted exquisite revenue numbers for Q2, with consistency in net profit and an ever rising product demand. The stock has outperformed market on various levels in the last one year.

SANWARIA CONSUMERS

The company entered as an agro oil manufacturer but later transformed its operations into deeming a complete package to consumers. The company is a bit over-valued if compared with the industry multiple but still seems a reasonable buy when fundamentals are closely analyzed. Which firm has such robust profits and an asset line in close sync with it market cap. Even if as an investor you are reluctant to add this in your portfolio it could be a great addition to your watchlist. In contrast, the transformation has yet to be tested in close waters with industry peers and consumer space.

With the new year around the corner, I feel as investors we must start to weed out sluggish performers and be on a hunt for companies that seem as prospective potential gainers in the long-run. Best stocks mentioned above have been analyzed on various fronts and might not fit in your requirement at some point but they are worth your research time.

MORE WILL UPDATE SOON!!

Best Small Cap Stocks To Buy In India

Markets have now hit the 34,500 levels, which is a new lifetime high. Picking the best small cap stocks is never easy in a rising market. However, we have picked some very good ones, which can generate good returns in the medium to long term. Take a look at some of the best small cap stocks that can be purchased in 2018.

   

Omkar Speciality: price Rs 72 - target price of Rs 130 Omkar Speciality Chemicals is engaged in the manufacture of organic, inorganic and organo inorganic intermediates. These find applications in several places like pharma (a major market for the company), chemical, glass, cosmetic ceramic and poultry feeds. The company supplies its products to several prestigious companies including Sun Pharma, Cipla etc. It also derives substantial part of its revenues from exports to countries in Europe, Australia, North America and Asian countries. Omkar Speciality has three manufacturing plants and also an R&D centre. OSCL is the largest manufacturer of Selenium Sulphide in India. Here below we tell you why this small cap stock can give you returns of at least 50 per cent in the coming one year or so.

Omkar Speciality: Demerger of business and uptick in domestic business The stock of Omkar recently dropped from Rs 206 to Rs 75, after the de-merger of the veterinary API business segment to Lasa Supergenerics. This makes the stock an extremely attractive buy after the drop. The Omkar Speciality management has guided for revenues growth of 15 per cent, with the launch of new products and better than expected performance in the export markets. The company is the only manufacturer of speciality iodine compounds. It is now getting into FMCG products where the working capital cycle is faster. The company expects the FMCG sector to contribute at least 40 per cent to revenues in the year's to come.

Omkar Speciality: Cheap on the valuations front Omkar Speciality is a stock that is cheap on the valuations front as well. The company is taking steps at debt reduction and working capital cycle. The launch of new products in the FMCG sector should also augur well for the company. The company can improve its performance and report an EPS of Rs 15 in 2018-19. This makes the stock cheap at the current levels of Rs 75. In fact, if you accord a 10 times p/e multiple to the stock, it should trade at Rs 150 at the very least. Buy the stock for good long term gains over the next 1-2 years. 

DB Corp :DB Corp owns the popular Dainik Bhaskar newspaper, which is the fourth largest circulated newspaper in the world. It also owns a Gujarati newspaper, a Marathi newspaper and also an FM radio station in 7 states and has 30 stations. In the second quarter of 2017-18, the company has taken several initiatives that are likely to propel growth. Among these include Content associations with the Harvard Business Review, TIME Magazine, New York Times, The Economist etc. The company is now laying focus on second phase of rest of Bihar launch. The company should reap the benefits of this expansion in the quarters to come.

DB Corp: Big expansion in radio, digital The company is also increasingly focussing on the digital space, where the next phase of growth of 200 million internet users would come from language users. News on the desktop and mobile would drive the company's growth story. Another major reason to be recommending the DB Corp stocks is the fact that election in states of Rajasthan and Madhya Pradesh in 2018 will drive advertisement and profitability in the next few years. The expansion of the radio business into Maharashtra, Chandigarh, Punjab ad Haryana is also likely to boost revenues for the company. DB Corp has also tied-up for being the exclusive music partner for many bollywood movies.

DB Corp: Fundamentally cheap The shares of DB Corp are not too expensive considering the various expansion initiatives and elections to key states in 2018 and national elections in 2019. The stock is trading at a p/e of around 14 times 2019 EPS. If you are looking at a good long term small cap stock to hold for the next 2-3 years, DB Corp should not be a bad bet. The promoter holding in the company is also very high at around 70 per cent.

Granules India: Granules India has a presence across the pharma spectrum from active pharmaceutical ingredients (API) to pharmaceutical formulation and finished dosages. The company's manufacturing facilities have approval from the US and European regulatory authorities. We are recommending this small cap stock to buy in India at the current market price for a number of reasons. Firstly, the company is laying a focus on finished dosages, which would add to margins and profitability in the coming years. The company has filed for a number of ANDAs with the US FDA and once these approvals come through, it can begin launching these products in the US.

Expansion to benefit Granules India Granules India plans a gradual expansion of its paracetamol facilities, Metformin and Guaifenes capacity. The Acquisition of Auctus will also lead to high growth in the API business. The company has already begun selling OTC products, which should further boost margins in the coming months. All these initiatives are likely to fructify in the next few years, which is when the profit after tax is expected to grow substantially in line with revenue growth at the company. To be precise all these would factor in FY 2019-20.

Good financial performance of Granules India Over the last few years, the financial performance of Granules India has been pretty decent. The company saw its profits rise from Rs 123 crores in FY 2016 to Rs 164.5 crores in the FY 2017. From a 2-year perspective the profitability should rise further due to the expansion plans at the company, apart from the new ANDA filings, whose launches good boost growth and profitability. We believe that the company could report an EPS of Rs 9 for FY 2018-19. This means the stock is trading at a p/e of just 14 times. The stock should rise and give returns of at least 30 per cent in the next two years. A great small cap stock to own.

MORE WILL UPDATE SOON!!

3 Best Stocks To Buy For 2018 In India

Markets are trading at their peak levels and hence there is very little value that one can find. However, we have recommended a few stocks that may still be able to make some money and are great stock picks in India for 2018. Here are a few of these which have the potential to give returns.

 

Reliance Capital This company is a part of the Anil Dhirubhai Ambani Group and has largely fallen on account of poor sentiments due the indebtedness of Reliance Communications. However, per se, the Reliance Capital stock holds tremendous value. The company runs an Asset Management Company (AMC), which manages Reliance Mutual Fund, which is among the top mutual fund houses in the country. The AMC also manages a pension fund, offshore fund and exchange traded fund. Reliance Capital is also the promoter of the insurance business which is also very big, largely including life insurance, general insurance and health insurance. R Cap has also promoted the broking business, home finance, asset reconstruction company etc. Some of these subsidiaries are doing very well and hence hold tremendous value.

Unlocking value The asset management company and the home finance company are already listed. We believe that there is tremendous value in the various businesses under R CAP, which is not reflected in the current market price of Rs 596. In fact, the R CAP stock has fallen from levels of Rs 880 to the current levels of Rs 596, and had plunged to Rs 400 on account of debt worries of group company RCOM. However, the latter is selling its assets to Jio and paying off debt, which has now improved sentiments for the ADAG group stocks. Given the robust growth likely in all areas, including home finance, asset management and insurance business, Reliance Capital offers good value at the current levels. The shares are currently quoted at Rs 596, which is way below the book value of Rs 671. The dividend yield on the stock is a decent 1.5per cent. If one can hold the shares for a couple of years it could reap good returns. R Cap is great stock to buy and hold in 2018 in India.

Kaveri Seeds This is a very small equity capital stock with almost zero debt on its books. In fact, the company is a cash rich company with almost Rs 422 crores cash in hand by the end of Sept 30, 2017. Kaveri Seeds is the largest cotton seed player in the country. For the first half ended Sept 30, 2017, the company has consistently gained market share in various states including key states of Maharashtra and Gujarat. There are a number of reasons to be optimistic on the performance of Kaveri Seeds. The company is gradually diversifying into the high margin vegetable business. It has already spent a greater deal on vegetable seed R&D and has demonstrated more than 50 variety to the farmers.

Kaveri Seeds: Huge Expansion Drive Kaveri is also expanding its distribution network beyond South and Central India. It is now moving to North, Central and Eastern India. Bihar, Gujarat, Maharashtra and Orissa would see good reach in the coming days. The company has already built an exclusive vegetable team. Coming to financials, we believe that Kaveri Seed Company can report an EPS of Rs 50 at the very least in 2018-19. This makes the stock inexpensive at the current levels of Rs 540. The company also has a very small equity capital of Rs 13 crores. Buy the stock for decent returns in 2018.

HPCL This is a more direct play on crude oil. As long as crude oil prices are at low, HPCL would continue to fire. The stock has recently fallen from levels of Rs 490 to Rs 405. The one reason to be recommending the stock is the huge dividend yields that it offers. In fact, we believe that it is highly possible that one gets a dividend of close to 4 per cent on the stock in 2018. The shares are trading at multiples close to 10 times 2018-19 EPS. However, we wish to emphasize that if crude prices remain robust than it is highly possible that we may see a downside risk on the stock. Many analysts are worried that crude could go higher. Beyond a point, it is highly possible that the rally would not last given output from shale, which would put pressure on prices all over again.

MORE WILL UPDATE SOON!!

Dow Jones 30 and NASDAQ 100 Price Forecast January 15, 2018, Technical Analysis

US stock markets rally during the session on Friday as the US dollar has taken an absolute pounding in the Forex markets. It’s likely that we will continue to see a “buy on the dips” mentality.

  

Dow Jones 30

The Dow Jones 30 broke above the 25,750 level, a very bullish sign. The market has been choppy during the day but most certainly with an upward momentum. I think that the market continues to be a “buy on the dips” situation, as not only are we seeing the US dollar getting hammer, but we are also focusing on corporate profits, and of course the tax bill that was just signed. Money seems to be flowing into the stock market every time it drops, so therefore I like buying these dips and adding to what is becoming a very large core position over time.

NASDAQ 100

The NASDAQ 100 went sideways initially during the session on Friday, but then pulled back to break below the 6700 level. That’s an area that has previously been resistance, and should now be support. In fact, it proves itself to be so, so then we rally towards the 6750 level, an area that looks as if it is offering short-term resistance. A pullback from this area is a buying opportunity, which makes sense considering that the NASDAQ 100 is just is bullish as the other indices in the United States. I’ve got no interest in selling this market, and I believe that the NASDAQ 100 will act very much like the S&P 500 and the Dow Jones 30, buying dips being the norm. I’ve got no interest in shorting this market, and believe that the 24-hour exponential moving average should continue to offer dynamic support as seen on the chart.

MORE WILL UPDATE SOON!!

S&P 500 Price Forecast January 15, 2018, Technical Analysis

The S&P 500 has been explosive to the upside during the Friday session, as the US dollar has been drifting lower. I think that the market is now looking to go to the 2800 level above. With the move on Friday, it’s likely that we will continue to see buyers on dips.

 

The S&P 500 went sideways initially during the day on Friday, but as you can see the volatility had picked up. The market has rallied significantly, and we are knocking on the door of 2790. The 2800 level is the next large, round, psychologically significant barrier to overcome, but we have not been able to do so quite yet. I think if we can break above the 2800 level, the market should continue to go much higher. I think at that point, we will probably go to the 2900 level, then eventually the 3000 level which is my year-end target.

Short-term pullbacks are buying opportunities as the offer value in a situation that has been extraordinarily bullish, based upon tax reform, corporate profits, and of course a lot of economic optimism in general. I think that the 2770 level is the short-term floor, but quite frankly even if we break down below there I think there will be plenty of opportunities just waiting to happen. The attitude of the markets will continue to be bullish, and although there will be headlines occasionally the cause issues, this is a good way to get rid of “scared money”, and therefore gives us an opportunity to start buying. This has been a long-term moved to the upside, and I don’t see that changing anytime soon. With the devalued US dollar, it should help exports coming out of the United States, and that of course helps the S&P 500.

MORE WILL UPDATE SOON!!

Nifty Bank Outlook for the Week (Jan 15, 2018 – Jan 19, 2018)

NIFTY BANK:

Nifty Bank closed the week on positive note gaining around 0.60%.

As we have mentioned, last week that minor support for the index lies in the zone of 25400 to 25500. Support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24500 to 24600 where break out gap for the index is lying. During the week the index manages to hit a low of 25527 and close the week around the levels of 25749.

Minor support for the index lies in the zone of 25400 to 25500. Support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24500 to 24600 where break out gap for the index is lying.

Resistance for the index lies in the zone of 25900 to 26000 where the index has formed a top in the month of November-2017. If the index manages to close above these levels then the index can move to the levels of 26300 to 26400.

Range for the week is seen from 25100 to 25200 on downside & 26100 to 26200 on upside.

MORE WILL UPDATE SOON!!