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Monday, February 12, 2007

Golden Opportunity

Friends, you have seen almost the entire market melt down in the last few days. The mid-small caps stocks have been badly hit. I would reckon that one should not look at the indices right now and concentrate on individual stock valuations. This current dip in the market is a golden opportunity to accumulate VALUE stocks, specially in the mid-small cap sectors. Stocks are now changing hands from the weak players to the stronger players in the market who have a better holding power. Some of my readers have been asking me what to do with the stocks they are holding. Instead of addressing each one personally, I'm writing this post. I personally am buying Value stocks on every dip. I feel that the dip in the value stocks is temporary and those who accumulate good stocks now, will turn out to be big winners in the medium term. And btw, I've posted the zodiac signs forecast for the next month on my astro site : http://superstarastro.blogspot.com/

13 comments:

nitin said...

Thanks for your advice. I ahve Kovilpatti, & Anik. Can you pl. name few stock which we can accumul;ate inthis correction. Also can youpl. have alook at Modern Dairies & share your views.

nitin said...

Thanks for your advice. I ahve Kovilpatti, & Anik. Can you pl. name few stock which we can accumul;ate inthis correction. Also can youpl. have alook at Modern Dairies & share your views.

jig said...

hey superstar, surely agree wid u tht this is a golden opportunity to buy value stocks.But i also think tht wid the kind of selling happening, mkts might still go down further.
Cannot understand why stocks like lok/guptasynthetics are being so badly hit even though trading at such cheap valuations..Whts ur take on them now....

Superstar said...

Dear Nitin & Jig,
As I said earlier this is a chance to accumulate good stocks. I would be putting in atleast 50% of my cash into good value stocks like Lok Housing, Kovilpatti, Salona Cotspin, Gupta Synth etc. now and wait till the weekend for putting in the balance cash. One cannot time the markets to pick stocks exactly at the bottom or sell exactly at the top, but even if we are able to catch 10% from the bottoms or tops, we are doing fine. Cheers!

PS: Nitin, I remember having taken a look at modern dairies couple of weeks back and I was not too excited with it.

GSIFS said...

If you feel the fall is going to last you could always sort sell and then buy value stocks.

Let us all hope for the best.

Superstar Fan said...

Hi Superstar,
This correction give chance to look some of ur old stock like Madhav marble,Plasti India, kothari product etc. Can you please review them if u feel they can be consider again with your top priorty picks

Regards
Pankaj

ravaye said...

dear superstar,

my query is regarding srf.in the last fiscal i.e fy05-fy06 srf posted eps around rs.16 and it commanded a pe multiple of around 20-25range.this time earnings trend indicate that it can show an eps of rs.40 in the current fiscal[06-07].in that case it has to kiss rs.800 mark
shortly.even indiabulls research report has rated this stock as outperformer.i think when upside potential in fancy sectors like real estate,it,capital goods become less attractive money will be pulled out from such richly valued sectors and money start pouring into stocks such as
srf.
and last but not the least even though dr.reddy posted a stunnig results why the stock has been hammered since result
being announced.
its 9 months eps comes around rs.47 and management has told that they are going repeat the same kind of results in the 4th qtr also.if that happens then they end up with an eps of rs.55+ in the current fiscal.so on the basis of this pe works out to be around 13 on the cmp rs.725
what is ur call about this?????

ravaye said...

hi

Sakthi said...

Hi Superstar,

Just today i have got your blogsite name from MC message board. Thanks for your interest on this. I'm a novice and very small investor. Nearly 1000 points in sensex had been corrected. Do you see sensex still at more lower levels. I want to buy lokhousing, madhav marbles.

Thanks
Sakthi

Superstar said...

Dear Sakthi,

You are welcome to the site. If there is no negative news in the budget, then we might see a rally tomorrow. I am not too sure about venturing afresh into real estate related stocks right now, so I think stocks like Salona Cotspin, FCS Software, SRF might be safer bets. I am bullish on the textiles and IT sectors.

Cheers!

Sakthi said...

Hi Superstar,

Thanks for the reply.

I have very small positions in Wipro, TCS, and infy. What do you think about IT sector from now since it has come under MAT? Is this worth buying TechMahindra ?

Superstar said...

Hi Sakthi,

I would think that these stocks may correct some more for some more time. I don't really like buying stocks which are trading at 20-30 PEs even if they are industry leaders. Buy since these are popular stocks with the institutional investors, they trade at high prices.

Agreed that the budget was not kind to the IT sector, but I think there are a lot of stocks in this sector, in the midcaps, which are still undervalued. The one sector which stands to benefit from the budget is textiles, so one can look for some good value buys there.

Cheers!

jig said...

texTiles, hey whts ur take on Alps Industries....