Add firepower to your portfolio! 10 stocks which can turn multibaggers in 2-3 years
The market will give ample
opportunities to retail investors to buy on dips as current valuations are
unlikely to sustain without the support of bounce back in earnings growth.
If you have started investing in
Indian stocks in January 2017, chances are you are sitting on huge pile of
profits. The S&P BSE Sensex rallied nearly 20 percent and many small and
midcap stocks gave multibagger returns in the same period.
In the spirit of Diwali, to start
something new, retail investors should look to add more stocks to their
portfolio which can deliver multibagger returns in the next 2-3 years.
Benchmark indices might not be
able to deliver exceptional returns but individuals can double their wealth if
they invest in the right stocks.
The market will give ample
opportunities to retail investors to buy on dips as current valuations are
unlikely to sustain without the support of bounce back in earnings growth.
The Sensex is currently trading
at 18.8x of its FY2019 earnings which is an 8 percent premium to its 10-year
average PE of 17.4x. Analysts suggest as interest rates are likely to remain
lower, equities will stay attractive asset class and domestic inflows will be
supportive of liquidity and valuations.
Investors’ can continue with
their bottom-up stock picking approach and select stocks which can benefit from
affordable housing scheme, consumption pick-up, banking, etc.
"The year 2017 has been a
solid year for equities globally and India is no different. 2017 has also
heralded an era of immense liquidity driven by the solid growth in domestic
asset management industry. This liquidity has made parts of broader markets
expensive with earnings not commensurate with the price action," Arbind
Maheswari, Head of India Equities - Sales Trading, Bank of America Merrill Lynch
told Moneycontrol.
"Also, visibility on
earnings remains hazy for many of these overvalued names. Having said that, one
can still find pockets of growth and visibility but the overall broader market
remains expensive and in parts over-valued," he said.
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