Aug 29, 2011|
The 'Rock Solid' stocks in market meltdown
The past one month was easily the worst month for Indian stocks since the recovery from the post 2008 lows. Perched nicely near the 19k mark, the benchmark BSE-Sensex fell by about 14% during the period. In fact, had it not been for the swift recovery today, the picture would have looked even worse.
Top gainers of the month: BSA 'A' group
The corrections of this sort are indeed painful. They erode a lot of shareholder wealth. But as it is said, every cloud does have a silver lining. And the silver lining during corrections comes in the form of the fact that such events help us judge the true character of a stock.
What happens during the bull market is that investors are quite euphoric and hence, most of the times even a bad quality stock goes up in price. But as mentioned earlier, the true test comes when there is a significant shake out in the market.
If the stock under consideration does not fall with the broader market or even witnesses a price rise, then the stock is certainly worth a second look. However, if it suffers a significant price fall, then perhaps there is some issue with the fundamentals.
Armed with this information, we went out to check the stocks that lost the least or may be even rose during the past one month. The table given below lists the 10 stocks from the BSE A group that performed the best in the month gone by.
Source: Equitymaster; *Not the closing price
||Price on 26th July 2011
||Price on29th Aug 2011*
||% change (one month)
||% change (1 year)
|Guj Mineral Dev Corp
As can be seen from the above table, all the ten stocks that have performed the best during the meltdown of the past one month have also managed to beat the benchmark index over the last one year period. In other words, it isn't that these stocks have performed well only in the last month but they seem to be of strong fundamentals and hence, have managed to beat the index over a larger duration of one year.
Those who have been following stock markets for quite some years now need not be told that quite a few names out there are the bluest of blue chips. These companies have strong balance sheets, have grown at a robust pace over the past few years and their business models come equipped with strong competitive advantages.
Thus, while the above table may certainly not be the be all and end all of stock selection, it nevertheless forms an important starting point for building a portfolio of stocks that is market beating over the long term.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 19, 2017
Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407