Akshaya Tritiya 2018: There are golden opportunities beyond just gold, say experts

A look at data for gold funds between Akshaya Tritiya in 2017 (April 28) and April 16 this year, reveals that returns have been in single digits.

  

Investors are always on the prowl for golden opportunities to make money. And what better occasion to turn a new leaf than the auspicious occasion of Akshaya Tritiya.

The Hindu festival, seen as an opportune day to accumulate or begin buying different assets for prosperity, sees many potential investors flocking to buy gold or gold-related assets every year.

In fact, the spillover is seen in equity markets as well, where gold and jewellery stocks tend to gain a day before the festival. On Tuesday, stocks such as Goenka Diamond, PC Jeweller, Titan Company, Renaissance Jewellery, Tara Jewels and TBZ gained up to 9 percent.

Other such asset classes where investors park their money are gold funds and gold ETFs (exchange traded funds). But a look at data for gold funds between Akshaya Tritiya in 2017 (April 28) and April 16 this year, reveals that returns have been in single digits.

According to data from Morningstar, in the ETF category, the maximum returns came in from IDBI Gold ETF at 6.42 percent, while the lowest return was 4.98 percent by ICICI Prudential Gold Fund ETF.

  

  

In fact, the average returns, or even the highest returns in both the categories, have either managed to just match or largely underperform returns from traditional defensive asset classes such as bank deposits. These are usually in the 6-7 percent range.

Experts highlight that even investors with risk-averse behaviour must ideally look away from such asset classes.

Most of the asset classes, be it gold, real estate or debt, do not offer meaningful returns. It will be advisable for retail investors to have a fairly large exposure to equities. Such investors could also look at hybrid funds, which invest in debt and in turn see lower volatility.

Speaking about the returns chart, Dua highlighted that the longer-term performance of gold funds have actually been negative.

Financial planners also advice investing in the appropriate investment avenue rather than in such funds.

This festival brings in the traditional habit of buying gold for auspicious purposes. But it cannot be considered to be an investing habit. Gold has not performed for the past five years and the even longer term returns show around 6-7 percent growth in rupee terms. So, one must look at asset classes which will give you good returns. At best, you can still have 5-10 percent of this class in your portfolio if you are a conservative investor and seeks some kind of a hedge, without worrying too much abou returns.

Sadagopan went as far as to say that one must buy the yellow metal only when there is need for it.

Gold should be used as an avenue only if there is end-use to it. For instance, if gold is being saved with the purpose of, say, your kid’s marriage, which is two-three years away, that makes sense. But to do that 10-15 years in advance is a flawed logic.

MORE WILL UPDATE SOON!!

Nifty likely to hit 10,600 by April expiry; top 3 stocks which could give up to 15% return

Here is a list of top three stocks which could give up to 15% return in the short term.

  

The Nifty is trading above the crucial level of 10,500, and hereon the derivative data reflects that there are a lot of outstanding short position in Nifty as well as in Index calls. It looks like, we could expect another round of short covering in the expiry week.

As per current derivative data, Nifty can move towards 10,600-10,650 mark this week as the market undertone remains bullish with the support of consistent short covering.

Derivative data indicates bullish scenario to continue with Nifty having multiple supports at lower levels around 10,500 & 10,400 spot.

Option writers were seen active in the recent rally. Put writing in 10,400 and 10,500 strikes along with the unwinding in calls will lend support.

We have been continuously seeing open interest addition post expiry which indicates long buildup. On the technical front, 10,475-10,500 spot levels is a strong support zone and the current trend is likely to continue towards 10,600-10,650.

Here is a list of top three stocks which could give up to 15% return in the short term:

NOCIL Limited: BUY| Target Rs 260| Stop Loss Rs 205| Return 15%

After testing 236 levels in early 2018, the stock witnessed profit booking at higher levels and retraced back towards its 100-days exponential moving average (DEMA) on the daily charts.

Since then, consolidation in the prices kept the stock in a thin range of 185-210 along with consistent buying at lower levels.

This week once again fresh breakout in the price has been observed above 220 levels along with hefty volumes. Additionally, the stock is also trading in a rising channel and forming higher highs and higher lows pattern on daily charts.

Traders can accumulate the stock in a range of 225-230 levels for the target of 260 and a stop loss below 205.

NRB Bearing Limited: BUY| Target Rs 188| Stop Loss Rs 154| Return 13%

The stock has been consolidating in the range of 150-165 for more than eight weeks and this week it gave a breakout above the key resistance levels accompanied with larger volumes.

Additionally, the stock has also formed rounding bottom formation on weekly interval along with positive divergence on stochastic and RSI indicators.

The fresh breakout in price can trigger follow up buying the stock moving forward. So, traders can accumulate the stock in a range of 166-170 for the upside target of 188 and a stop loss below 154.

Supreme Industries Limited: BUY| Target Rs 1450| Stop Loss Rs 1180| Return 13%

After declining from 1450 levels in early 2018 stock took support at its 200 days exponential moving average on a daily interval which is placed at 1160 levels.

Since then the stock went into consolidation phase and has been seen trading in the range of 1160-1250 for more than eight weeks. Now, last week once again fresh breakout in prices has taken stock above its key resistance level of 1250.

Additionally, the stock has also given breakout above the bullish flag formation pattern on a daily interval. Traders can accumulate the stock in a range of 1280-1300 levels for the upside target of 1450 and a stop loss below 1180.

MORE WILL UPDATE SOON!!

10,700 will act as resistance in April expiry; 5 stocks which could give up to 14% return

The immediate support is seen around 10,451 (100DMA) and 10,400 levels. According to daily Pivot charts, the key support level is placed at 10,509, followed by 10,470. If the index starts moving upwards, key resistance levels to watch out for are 10,574 and 10,600.

  

The NSE equity benchmark Nifty50 continued its positive momentum and ended in green for the ninth consecutive trading session. The index continued to trade above 10,500, took some support on the back of forecast of normal monsoon for the year 2018-19, which will be a positive boost for the rural economy.

On Tuesday, after a gap-up opening, markets largely remained range-bound for the most part of the day, but managed to close with a modest gain of 0.19 percent at 10,548.70; forming a 'Hanging Man' kind of pattern on the daily scale on Tuesday.

If the Nifty50 manages to hold and sustain above 10,561-mark (50 percent retracement of January to March downfall) in the next few trading sessions, it can move higher till the resistance levels of 10,632 and then till 10,705 levels (61.8 percent retracement of January to March correction).

The immediate support is seen around 10,451 (100DMA) and 10,400 levels. According to daily Pivot charts, the key support level is placed at 10,509, followed by 10,470. If the index starts moving upwards, key resistance levels to watch out for are 10,574 and 10,600.

The Relative Strength Index – RSI on the Daily Chart is at 62.61; showing an upward momentum and MACD just entering above the zero line with positive crossover, which indicates that the bias could remain bullish for the next few trading sessions.

On the Options front, maximum Call open interest of 46.74 lakh contracts is seen at strike price 10,700, followed by 10,500 which now holds 39.40 lakh contracts and maximum Put open interest of 53.42 lakh contracts is seen at strike price 10,400, followed by 10,300 which now holds 49.80 lakh contracts.

As per the options data, immediate support is placed around 10,400 levels, whereas 10,700 will act as a stiff resistance in April expiry.

The India VIX ends down by 1.53 percent at 14.04 and is now trading around the crucial levels of 14. This cooling down of VIX indicates a positive signal for nifty to inch upwards in upcoming trading sessions.

Here is a list of top 5 trading ideas which can give up to 14% return in the short term:

NOCIL Ltd: BUY | Close: Rs 226.50 | Target: Rs 259 | Stop loss: Rs 209 | Return: 14.35%

On the weekly chart, the stock has given a breakout of its upper band of Symmetrical Triangle formation with higher volumes. The weekly Relative strength index (RSI) is showing an upward momentum and MACD is continuously trading above zero line with positive crossover whereas +DI is continuously trading above –DI.

Based on the above-mentioned observations positional traders can buy the stock in the range of Rs 224-227 with a stop loss below Rs 209 (closing) for the target of Rs 259.

Tata Global Beverage: BUY | Close: Rs 280.95 | Target: Rs 320 | Stop loss: Rs 259 | Return: 13.90%

The stock has given a consolidation breakout above Rs 279-280 levels on the daily scale with moderate volumes.

The Daily Relative Strength Index (RSI) is showing an upward momentum and the MACD is trading with positive crossover whereas +DI is continuously trading above –DI, which indicates that the stock has the potential to move higher from current level.

Traders can buy the stock in the range of Rs 278-281 with a stop loss below Rs 259 (closing) for the target of Rs 320.

Bajaj Auto Ltd: BUY | Close: Rs 2864.20 | Target: Rs 3030 | Stop loss: Rs 2770 | Return: 5.79%

The stock has given a consolidation breakout above Rs 2827-2830 level on the daily scale with higher volumes. The Daily Relative Strength Index (RSI) is making a higher bottom and higher top. MACD is trading with a positive crossover below the zero line and stochastic indicator gives positive divergence.

Based on these observations, positional traders can buy around current level and add on dips around Rs 2845-2850 with a stop loss below Rs 2770 (closing) for a target of Rs 3030.

Asian Paints Ltd: BUY | Close: Rs 1176 | Target: Rs 1236 | Stop loss: Rs 1138 | Return: 5.1%

In weekly scale, the stock has given a breakout from descending channel pattern above Rs 1169-1170 levels on Monday.

The Weekly Relative strength index (RSI) is showing an upward momentum and MACD is trading with a positive crossover but still sustaining below zero line whereas +DI continuously is trading above –DI.

Traders can buy the stock in the range of Rs 1270-1276 with a stop loss below Rs 1138 (closing) for a target of Rs 1236.

Divi's Laboratories Ltd: BUY | Close: 1180.55 | Target: Rs 1260 | Stop loss: Rs 1130 | Return: 6.73%

The stock has given a breakout from ascending triangle pattern above Rs 1142-1143 levels on Monday with moderate volumes in the weekly scale.

The Weekly Relative strength index (RSI) and OBV — On Balance Volume, are showing an upward momentum and the MACD is continuously trading above zero line with a positive crossover which indicates that the stock has the potential to move higher.

Traders can buy around current level, accumulate on dips around Rs 1160-1165 with a stop loss below Rs 1130 (closing) for the target of Rs 1260.

MORE WILL UPDATE SOON!!

Don't miss out! Top 10 growth stocks which are available at reasonable valuations

Equity investors are always on a look out of stocks which offers growth and at the same time available at reasonable valuations which makes them attractive ‘buy on dips’ stock.

   

Morgan Stanley in its report released earlier in the month of April handpicked over 10 stocks which are available at reasonable valuations. For computing these stocks, the global investment bank filtered stocks using parameters such as beta, future growth rate, and Return on capital employed.

Most of the stocks such as Asian Paints, Cadila Healthcare, BPCL, Havells India etc. have a beta less than 1 which in other words mean that these stocks are less volatile and will not fall/rise with the same magnitude compared to market movement.

Low beta stocks indicates less volatility in price movement and simultaneously, and if the ROCE is rising investor can be pretty sure that the money invested in the company is being used efficiently, leading to higher profits.

However, these may not be the only indicators of the company's prospects. The growth of the industry the company operates in and investment in productive capacities also merit close scrutiny.

Besides ROCE and Beta, investors should look price-to-book value (P/BV) ratio, debt-to-equity ratio and price/earnings growth ratio to name a few. The P/BV ratio values shares of companies with large tangible assets on their balance sheets.

Apart from these ration investors could also look at a debt-to-equity ratio which shows how much debt the company has on its books.

The PEG ratio which is price earnings to growth will help investors to know the relationship between the price of a stock, earnings per share (EPS) and the company's growth, suggest experts.

We have collated a list of top 10 high growth stocks which are available at reasonable valuations .

 

Cadila Healthcare Limited

The management expects that the fourth quarter would see around 10-12 new product launches in the US and this would continue for the upcoming quarters. The company expects, the share of US to rise in overall revenue - from a roughly 50 percent now to 55 percent in FY19 and the US would contribute around 60 percent of its revenues by FY20.

The management expects that US business to witness price erosion in the range 10-12 percent in FY2018E and 8-10 percent in FY2019E. It has guided for overall US revenue (reported) growth in FY19E, despite high base due to gLialda sales in 180?days exclusivity in FY2018E.

The company has planned a capex of Rs 1000 crore for FY2019. Research & Development (R&D) expenses will remain in the range of 7-8 percent of sales over next two years.

Havells India Limited:

The company has been continuously growing in each business parameter and it is expected that it would be directly benefitted by the Government initiatives such as “Housing and power for all”.

It is best placed to attain scale across businesses with its new SBU (Strategic Business Unit) structure and focused product-wise branding strategy.

It has pioneered the concept of the exclusive brand showroom in the electrical industry with ‘Havells Galaxy’. It became the first FMEG Company to offer doorstep service via its initiative ‘Havells Connect’.

Indraprastha Gas limited:

The company expects its sales volume to industrial and commercial clients rise 20 percent in 2018-19, after experiencing a similar gain last fiscal year, following a ban on using polluting pet coke and fuel oil in the National Capital Region on rising green concerns.

It plans to use the restrictions on polluting fuel as an opportunity to add as many as 2,000 industrial and commercial customers in 2018-19 to its current base of 3,000. It is also planning to rapidly expand sales of compressed natural gas (CNG), used by cars and buses.

To tide over the scarcity of land in cities for setting up fuel stations, IGL has begun appointing dealers to set up CNG stations – so far the company owned and operated all its filling stations.

For its expansion, IGL is focusing on congested colonies, which had escaped attention earlier but are now being targeted with enhanced security features.

Mindtree Limited:

The Company’s overall strategy of achieving industry-leading growth through deep domain expertise in chosen verticals combined with technical depth, customized for clients remain the same.

An enviable client list and a fantastic leadership team are two clear advantage areas for Mindtree and plan to leverage them to engineer meaningful technology solutions to help businesses and societies flourish.

The company has positioned itself as a comprehensive solutions provider. As per management of the company it has the capability to create opportunities to cross-sell its R&D engineering services to its clients and also supplement its IT services capabilities.

Petronet LNG Limited:

As there is a shortage of natural gas supply, the company will get the benefit as the primary play on increasing usage of LNG. In the long term, we expect volumes to remain strong and contribute significantly going forward.

Dahej capacity expansion from 15.0 million tonne (mt) to 17.5 mt is expected by June 2019. The project is 70 percent complete. In addition to the on-going capex, the company has also decided to add one more tank at a cost of Rs 600 crore.

This would increase the operational flexibility for PLNG and allow it to operate the terminal at full capacity. Management expects FY19 capex at Rs 400 crore, mostly on Dahej expansion and some initial capex on new storage tanks at Dahej.

Zee Entertainment Enterprises Limited:

The company has entered into newer geographies both domestically and globally, launched multiple channels, strengthened distribution, expanded the genres and widened its audience profile.

Moreover, the management focuses towards expansion and it is expected that market share would give strong growth to the company in coming years. Going forward, better content performance, increasing regional market share, tight cost control at the sales and distribution levels, a turnaround of the loss-making Zee Tamil, & TV and music businesses in FY19 may lead to superior margins.

JSW Steel Ltd:

Goldman Sachs maintains a buy call on JSW Steel and raised its target price to Rs342 from Rs 315 earlier. The medium-term fundamentals remain resilient, and the tariff barriers can impact steel margins.

ITC:

Credit Suisse maintains a neutral rating on ITC with a target price of Rs 320. The budget is still relevant post-GST for ITC and the risk-reward favourable at the margin. The valuations for ITC attractive relative compared to its peers.

Infosys:

CLSA maintains buy on Infosys with a target price of Rs1340. The IT major reported results which were largely inline with revenues but ahead on margins. The FY19 revenue guidance is solid at 7-9 percent YoY in USD (6-8 percent in CC).

The guidance suggests growth acceleration and stable client relationships. Infosys should get back to catching up with peer growth rates soon. The stock offers the highest potential for a rerating in the sector.

Titan Company Ltd:

Titan’s stock has delivered immense value to investors over the last several years, and its ability to compound earnings at 23 percent p.a. over the past 10 years has been a key enabler in this regard, JM Financial said in a note.

“We believe that 20 percent revenue CAGR over FY18-23E should also support margin expansion that should ideally lead to an even higher rate of growth in profit over the same period (operating leverage), which would help sustain the stock’s premium valuation, in our view.

Titan just announced an ‘extension’ of its target 20 percent-CAGR phase in its Jewellery business (2.5x increase in size in 5 years) to FY18-23E. It is important to note that the company has not delayed the time by which its Jewellery business will grow 2.5x vs FY17 level. Titan aims to compound jewellery revenue by 20 percent p.a. in the next five years as well, on FY18’s base.

MORE WILL UPDATE SOON!!